Astoria Federal Savings and Loan Association Amended and Restated Employment Agreement with Executive Officer
Exhibit
10-35
Astoria
Federal Savings and Loan Association
Amended
and Restated
Employment
Agreement with Executive Officer
This
Amended and
Restated Employment Agreement (the "Agreement") is made and entered into
as of January 1, 2009 by and between Astoria
Federal Savings and Loan Association, a savings association
organized and operating under the federal laws of the United States and having
an office at Xxx Xxxxxxx Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxx Xxxx 00000-0000 (the
"Association") and, Xxxx X. XxXxxx, an individual residing at 00
Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000, (the
"Executive").
Witnesseth:
Whereas, the Executive currently
serves the Association in the capacity of Executive Vice President and as
Executive Vice President of the Association's savings and loan holding company,
Astoria
Financial Corporation, a publicly held business corporation organized and
operating pursuant to the laws of the State of Delaware (the "Company");
and
Whereas, the Association desires
to assure for itself the continued availability of the Executive's services and
the ability of the Executive to perform such services with a minimum of personal
distraction in the event of a pending or threatened Change of Control (as
hereinafter defined); and
Whereas, the
Executive is willing to continue to serve the Association on the terms and
conditions hereinafter set forth; and
Whereas,
the Executive currently has an employment contract with the Association entered
into on December 1, 2003 (the “Initial Effective Date”)and amended as of August
15, 2007 (such agreement, as amended, the “Prior Agreement”); and
Whereas,
the Executive and the Association wish to further amend and modify the Prior
Agreement pursuant to Section 24 thereof for the purpose, among others, of
compliance with the applicable requirements of Section 409A of the Internal
Revenue Code of 1986 (the “Code”);
Now,
Therefore, in consideration of the
premises and the mutual covenants and conditions hereinafter set forth, the
Association and the Executive amend and restate in its entirety the Employment
Agreement by and between the Association and the Executive as amended through
August 15, 2007 so as to provide as follows from and after the date
hereof:
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30
Section 1. Employment.
The Association 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 (the "Employment Period").
The Employment Period shall be for an initial term of three years beginning on
the Initial Effective Date and ending on the third anniversary date of the
Effective Date, plus such extensions, if any, as are provided by the Board of
Directors of the Association (the “Board”) as provided below. Prior to the first
anniversary of the date of this Agreement and on each anniversary date
thereafter (each an "Anniversary Date) the Board shall review the terms of this
Agreement and the Executive's performance of services hereunder and may, in the
absence of objection from the Executive, approve an extension of the Employment
Period. In such event, the Employment Period shall be extended to the third
anniversary of the relevant Anniversary Date.
(b) 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
Anniversary Date on which the Employment Period (as extended pursuant to Section
2(a) of this Agreement) is then scheduled to expire.
(c)
Nothing in this Agreement shall be deemed to prohibit the Association from
terminating the Executive's employment at any time during the Employment Period
with or without notice for any reason; provided, however, that the relative
rights and obligations of the Association and the Executive in the event of any
such termination shall be determined pursuant to this
Agreement.
Section
3. Duties.
The Executive shall serve as Executive
Vice President of the Association, having such power, authority and
responsibility and performing such duties as are prescribed by or pursuant to
the By-Laws of the Association 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
Association and shall use his best efforts to advance the interests of the
Association.
Section
4. Cash
Compensation.
In consideration for the services to be
rendered by the Executive hereunder, the Association shall pay to him a salary
at an initial annual rate of FIVE HUNDRED THOUSAND DOLLARS ($500,000), payable in approximately
equal installments in accordance with the Association's customary payroll
practices for senior officers. At least annually during the Employment Period,
the Board shall review the Executive's annual rate of salary and may, in its
discretion, approve an increase therein. In no event shall the Executive's
annual rate of salary under this Agreement in effect at a particular time be
reduced without his or her prior written consent and any such reduction in the
absence of such consent shall be a material breach of this Agreement. In
addition to salary, the Executive may receive other cash compensation from the
Association 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 Association 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 Association, in accordance with the terms and
conditions of such employee benefit plans and programs and compensation plans
and programs and consistent with the Association's customary
practices.
Section
6. Indemnification and
Insurance.
(a)
During the Employment Period and for a period of six (6) years thereafter, the
Association 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 Association or service in other
capacities at the request of the Association. 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 Association.
(b) To
the maximum extent permitted under applicable law, during the Employment Period
and for a period of six (6) years thereafter, the Association shall indemnify
the Executive against, and hold him harmless from any costs, liabilities, losses
and exposures for acts or omissions in connection with service as an officer or
director of the Association or service in other capacities at the request of the
Association, to the fullest extent and on the most favorable terms and
conditions that similar indemnification is offered to any director or officer of
the Association or any subsidiary or affiliate thereof.
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Section
7. Other
Activities.
(a) 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 Association and generally
applicable to all similarly situated executives.
(b) The
Executive may also serve as an officer or director of the Company on such terms
and conditions as the Association and the Company 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.
Section
8. Working Facilities
and Expenses.
The Executive's principal place of
employment shall be at the Association's executive offices at the address first
above written, or at such other location within Queens County or Nassau County,
New York at which the Association shall maintain its principal executive
offices, or at such other location as the Association and the Executive may
mutually agree upon. The Association 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 or her position with the
Association and necessary or appropriate in connection with the performance of
his or her assigned duties under this Agreement. The Association shall provide
to the Executive for his or her exclusive use an automobile owned or leased by
the Association and appropriate to his position, to be used in the performance
of his or her duties hereunder, including commuting to and from his personal
residence. The Association shall (i) reimburse the Executive for all expenses
associated with his or her business use of the aforementioned automobile; (ii)
reimburse the Executive for his or her ordinary and necessary business expenses
incurred in the performance of his or her duties under this Agreement (including
but not limited to travel and entertainment expenses) that are excludible from
the Executive’s gross income for federal income tax purposes; (iii) reimburse
the Executive for fees for memberships in such clubs and organizations and such
other expenses as the Executive and the Association shall mutually agree are
necessary and appropriate for business purposes, in each case upon presentation
to the Association of an itemized account of such expenses in such form as the
Association may reasonably require, each such reimbursement payment to be made
promptly following receipt of the itemized account and in any event not later
than the last day of the calendar year following the calendar year in which the
expense was incurred. The Executive shall be responsible for the
payment of any taxes on account of his personal use of the automobile provided
by the Association and on account of any other benefit provided
herein.
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Section
9. Termination of
Employment with Severance Benefits.
(a) The
Executive shall be entitled to the severance benefits described herein in the
event that his employment with the Association terminates during the Employment
Period under any of the following circumstances:
(i) the
Executive's voluntary resignation from employment with the Association within
six (6) months following:
(A) the
failure of the Board to appoint or re-appoint or elect or re-elect the Executive
to the office of Executive Vice President (or a more senior office) of the
Association;
(B) if
the Executive is a member of the Board, the failure of the stockholders of the
Association 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 thirty (30) day period following the date on which the Executive
gives written notice to the Association of its material failure, whether by
amendment of the Association's Charter or By-laws, action of the Board or the
Association's stockholders or otherwise, to vest in the Executive the functions,
duties, or responsibilities prescribed in Section 3 of this Agreement as of the
date hereof, unless, during such thirty (30) day period, the Association cures
such failure in a manner determined by the Executive, in his or her discretion,
to be satisfactory;
(D) the
expiration of a thirty (30) day period following the date on which the Executive
gives written notice to the Association 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 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 thirty (30) day
period, the Association cures such failure in a manner determined by the
Executive, in his or her discretion, to be satisfactory; or
(E) the
relocation of the Executive's principal place of employment, without his or her
written consent, to a location outside of Nassau County and Queens County, New
York;
(ii) the
termination of the Executive's employment with the Association for any other
reason not described in Section 10(a).
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In such
event and subject to Section 27 of this Agreement, the Association shall provide
the benefits and pay to the Executive the amounts described in Section
9(b).
(b) Upon
the termination of the Executive's employment with the Association under
circumstances described in Section 9(a) of this Agreement, the Association shall
pay and provide to the Executive (or, in the event of the Executive's death
following the Executive's termination of employment, to his or her
estate):
(i) his
or her earned but unpaid compensation (including, without limitation, all items
which constitute wages under Section 190.1 of the New York Labor Law and the
payment of which is not otherwise provided for under this Section 9(b)) as of
the date of the termination of his or her employment with the Association, such
payment to be made at the time and in the manner prescribed by law applicable to
the payment of wages but in any event not later than thirty (30) days after
termination of employment;
(ii) the
benefits, if any, to which he or she is entitled as a former employee under the
employee benefit plans and programs and compensation plans and programs
maintained for the benefit of the Association's officers and employees,
including the annual bonus (if any) to which he or she is entitled under any
cash-based annual bonus or performance compensation plan in effect for the year
in which his or her termination occurs, to be paid at the same time and on the
terms and conditions (including but not limited to achievement of performance
goals) applicable under the relevant plan;
(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 (including any co-payments and deductibles, but excluding any
premium sharing arrangements, it being the intention of the parties to this
Agreement that the premiums for such insurance benefits shall be the sole cost
and expense of the Association) equivalent to the coverage to which he or she
would have been entitled under such plans (as in effect on the date of his or
her termination of employment, or, if his or her termination of employment
occurs after a Change of Control, on the date of such Change of Control,
whichever benefits are greater), if he or she had continued working for the
Association during the Remaining Unexpired Employment Period at the highest
annual rate of salary or compensation, as applicable, achieved during that
portion of the Employment Period which is prior to the Executive's
termination of employment with the Association;
(iv)
thirty (30) days following the Executive's termination of employment with the
Association, a lump sum payment in an amount representing an estimate of the
salary that the Executive would have earned if he or she had continued working
for the Association during the Remaining Unexpired Employment Period at the
highest annual rate of salary achieved during that portion of the Employment
Period which is prior to the Executive's termination of employment with the
Association (the "Salary Severance Payment"). The Salary Severance Payment shall
be computed using the following formula:
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|
|
SSP
|
=
|
BS
x NY
|
where:
"SSP" is
the amount of the Salary Severance Payment, before the deduction of applicable
federal, state and local withholding taxes;
"BS" is
the highest annual rate of salary achieved during that portion of the Employment
Period which is prior to the Executive's termination of employment with the
Association;
"NY" is
the Remaining Unexpired Employment Period expressed as a number of years
(rounded, if such period is not a whole number, to the next highest whole
number).
The
Salary Severance Payment shall 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) a
lump sum payment (the "XX Xxxxxxxxx Payment") in an amount equal to the excess,
if any, of:
(A) the
present value of the aggregate benefits to which he or she would be entitled
under any and all qualified and non-qualified defined benefit pension plans
maintained by, or covering employees of, the Association, if he or she were 100%
vested thereunder and had continued working for the Association during the
Remaining Unexpired Employment Period, such benefits to be determined as of the
date of termination of employment by adding to the service actually recognized
under such plans an additional period equal to the Remaining Unexpired
Employment Period and by adding to the compensation recognized under such plans
for the most recent year recognized all amounts payable pursuant to Sections
9(b)(i), (iv), (vii), (viii) and (ix) of this Agreement; over
(B) the
present value of the benefits to which he or she is actually entitled under such
defined benefit pension plans as of the date of his or her
termination;
The XX Xxxxxxxxx Payment shall be
computed using the following formula:
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|
|
DBSP
|
=
|
SEVLS
- LS
|
where:
"DBSP" is
the amount of the XX Xxxxxxxxx Payment, before the deduction of applicable
federal, state and local withholding taxes;
"SEVLS"
is the sum of the present value of the defined benefit pension benefits that
have been or would be accrued by the Executive under all qualified and
non-qualified defined benefit pension plans of which the Association or any of
its affiliates or subsidiaries are a sponsor and in which the Executive is or,
but for the completion of any service requirement that would have been completed
during the Remaining Unexpired Employment Period, would be a participant
utilizing the following assumptions:
(I) the
executive is 100% vested in the plans regardless of actual
service,
(II) the
benefit to be valued shall be a single life annuity with monthly payments due on
the first of each month and with a guaranteed payout of not less than 120
payments,
(III) the
calculation shall be made utilizing the same mortality table and interest rate
as would be utilized by the plan on the date of termination as if the
calculation were being made pursuant to Section 417(e)(3) of the Code, as
amended;
(IV) for
purpose of calculating the Executive's monthly or annual benefit under the
defined benefit plans, additional service equal to the Remaining Unexpired
Employment Period (rounded up to the next whole year if such period is not a
whole number when expressed in years) shall be added to the Executive's actual
service to calculate the amount of the benefit; and
(V) for
purpose of calculating the Executive's monthly or annual benefit under the
defined benefit plans, the following sums shall be added to the Executive's
compensation recognized under such plans for the most recent year
recognized:
(1)
payments made pursuant to Section 9(b)(i);
(2) the
Salary Severance Payment;
(3) the
Bonus Severance Payment;
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(4) the
Option Surrender Payment; and
(5) the
RRP Surrender Payment.
"LS" is
the sum of the present value of the defined benefit pension benefits that are
vested benefits actually accrued by the Executive under all qualified and
non-qualified defined benefit pension plans maintained by, or covering employees
of, the Association or any of its affiliates or subsidiaries in which the
Executive is or, but for the completion of any service requirement, would be a
participant utilizing the following assumptions:
(I) the
benefit to be valued shall be a single life annuity with monthly payments due on
the first day of each month and with a guaranteed payout of not less than 120
payments, and
(II) the
calculation shall be made utilizing the same mortality table and interest rate
as would be utilized by the plan on the date of termination as if the
calculation were being made pursuant to Section 417(e)(3) of the
Code;
The XX
Xxxxxxxxx Payment shall be converted into the same form, and paid at the same
time, and in the same manner, as benefits under the corresponding non-qualified
plan.
(vi) a
lump sum payment (the "Defined Contribution Severance Payment") equal to the sum
of:
(A) an
estimate of the additional employer contributions to which he or she would have
been entitled under any and all qualified and non-qualified defined contribution
pension plans, excluding the employee stock ownership plans, maintained by, or
covering employees of, the Association or any of its affiliates or subsidiaries
as if he or she were 100% vested thereunder and had continued working for
the Association during the Remaining Unexpired Employment Period (the "401K
Severance Payment"); and
(B) an
estimate of the value of the additional assets which would have been allocable
to him or her through debt service or otherwise under any and all qualified and
non-qualified employee stock ownership plans, maintained by, or covering
employees of, the Association or any of its affiliates or subsidiaries as if he
or she were 100% vested thereunder and had continued working for the
Association during the Remaining Unexpired Employment Period, based on the fair
market value of such assets at termination of employment (the "ESOP Severance
Payment").
The Defined Contribution Severance
Payment shall be calculated as follows:
DCSP = 401KSP
+ ESOPSP
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where:
"DCSP" is
the amount of the Defined Contribution Severance Payment, before the deduction
of applicable federal, state and local withholding taxes;
"401KSP"
is the amount of the 401K Severance Payment, before the deduction of applicable
federal, state and local withholding taxes; and
"ESOPSP"
is the amount of the ESOP Severance Payment, before the deduction of applicable
federal, state and local withholding taxes.
The
401KSP shall be calculated as follows:
401KSP
= (401KC x NY) +UVB
where:
"401KC"
is the sum of the Association Contributions as defined in the Association's
Incentive Savings Plan or, if made under another defined contribution pension
plan other than an employee stock ownership plan, the comparable contribution
made for the benefit of the Executive during the one year period which shall end
on the date of his or her termination of his or her employment with the
Association; and
"NY" is
the Remaining Unexpired Employment Period expressed as a number of years
(rounded, if such period is not a whole number, to the next highest whole
number); and
“UVB” is
the actual balance credited to the Executive's account under the applicable plan
at the date of his or her termination of employment that is not vested and does
not become vested as a consequence of such termination of
employment.
The ESOPSP shall be calculated as
follows:
ESOPSP =
(((ALL x FMV) + C) x NY) + UVB
where:
“ALL" is
the sum of the number of shares of the Association's common stock or, if
applicable, phantom shares of such stock by whatever term it is described
allocated to the Executive's accounts under all qualified and non-qualified
employee stock ownership plans maintained by the Association or any of its
affiliates or subsidiaries during or for the last complete plan year in which
the Executive participated in such plans and received such an allocation whether
the allocation occurred as a result of contributions made by the Association,
the payment by the Association or any of its affiliates or subsidiaries of any
loan payments under a leveraged employee stock ownership plan, the allocation of
forfeitures under the terms of such plan or as a result of the use of cash or
earnings allocated to the Executives account during such plan year to make loan
payments that result in share allocations, provided however, that excluded shall
be any shares or phantom shares allocated to the Executive's account under any
qualified and non-qualified employee stock ownership plans maintained by the
Association or any of its affiliates or subsidiaries solely as a result of the
termination of such plans, provided further, that if the shares allocated are
not shares of the Association's common stock or phantom shares of such stock
than shares of whatever securities are so allocated shall be utilized, and
provided further, that in the event that there shall be any shares or phantom
shares allocated during the then current plan year or the last complete plan
year to the Executive's account under any qualified and non-qualified employee
stock ownership plans maintained by the Association or any of its affiliates or
subsidiaries solely as a result of the termination of such plans, the ALL shall
be reduced (but not to an amount less than zero (0)) by an amount calculated by
multiplying the number of shares or phantom shares allocated to the Executive's
account solely as a result of the termination of such plans times the FMV
utilized to calculate the ESOPSP;
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"C" is
the sum of all cash allocated to the Executive's accounts under all qualified
and non-qualified employee stock ownership plans maintained by the Association
during or for the last complete plan year in which the Executive participated in
such plans whether the allocation occurred as a result of contributions made by
the Association, the payment by the Company or the Association of any loan
payments under a leveraged employee stock ownership plan or the allocation of
forfeitures under the terms of such plan during such plan
year;
"FMV" is
the closing price of the Association's common stock on The New York Stock
Exchange (“NYSE”) or on whatever other stock exchange or market such stock is
publicly traded on the date the Executive's employment terminates or, if such
day is not a day on which such securities are traded, on the most recent
preceding trading day on which a trade occurs, provided however that if the
security allocated to the Executive's account during the last completed plan
year is other than the Association's common stock the closing price of such
security on the date the Executive's employment terminates shall be
utilized.
"NY" is
the Remaining Unexpired Employment Period expressed as a number of years
(rounded, if such period is not a whole number, to the next highest whole
number); and
“UVB” is
the actual balance credited to the Executive's account under the applicable plan
at the date of his or her termination of employment that is not vested and does
not become vested as a consequence of such termination of
employment.
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The
Defined Contribution Severance Payment shall be converted into the same form,
and paid at the same time, and in the same manner, as benefits under the
corresponding non-qualified plan. and, if there is no such non-qualified plan in
effect on the date of this Agreement, in a lump sum.
(vii)
thirty (30) days following the Executive's termination of employment with the
Association, the Association shall make a lump sum payment to the Executive in
an amount equal to the estimated potential annual bonuses or incentive
compensation that the Executive could have earned if the Executive had continued
working for the Association during the Unexpired Employment Period at the
highest annual rate of salary achieved during that portion of the Employment
Period which is prior to the Executive's termination of employment with the
Association (the "Bonus Severance Payment"). The Bonus Severance Payment shall
be computed using the following formula:
|
|
BSP
=
|
(BS
x TIO x AP x NY)
|
|
|
where:
|
|
|
"BSP"
is the amount of the Bonus Severance Payment, before the deduction of
applicable federal, state and local withholding
taxes;
|
|
|
"BS"
is the highest annual rate of salary achieved during that portion of the
Employment Period which is prior to the Executive's termination of
employment with the Association;
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|
|
"TIO"
is the highest target incentive opportunity established by the
Compensation Committee of the Board for the Executive pursuant to the
Astoria Financial Corporation Executive Officer Annual Incentive Plan
during that portion of the Employment Period which is prior to the
Executive's termination of employment with the
Association;
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|
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"AP"
is the highest award percentage available to the Executive with respect to
the financial performance of the Association (expressed as a percentage of
the TIO) established by the Compensation Committee of the Board for the
Executive pursuant to the Astoria Financial Corporation Executive Officer
Annual Incentive Plan during the period during that portion of the
Employment Period which is prior to the Executive's termination of
employment with the Association;
and
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"NY"
is the Remaining Unexpired Employment Period expressed as a number of
years (rounded, if such period is not a whole number, to the next highest
whole number).
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|
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(viii)
at the election of the Association made within thirty (30) days
following the Executive's termination of employment with the
Association, 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 Association, a lump
sum payment (the "Option Surrender Payment"). The Option Surrender Payment
shall be calculated as follows:
|
|
|
OSP =
|
(FMV
- EP) x N
|
where:
|
|
"OSP"
is the amount of the Option Surrender Payment, before the deduction of
applicable federal, state and local withholding
taxes;
|
"FMV" is
the closing price of the Association's common stock on the NYSE, or on whatever
other stock exchange or market such stock is publicly traded, on the date the
Executive's employment terminates or, if such day is not a day on which such
securities are traded, on the preceding trading day on which a trade occurs,
provided however that if the option or stock appreciation right is for a
security other than the Association's common stock, 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 shall
be utilized;
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|
"EP"
is the exercise price per share for such option or appreciation
right, as specified in or under the relevant plan or program;
and
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"N"
is the number of shares with respect to which options or appreciation
rights are being surrendered.
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For
purposes of determining the Option Severance Payment and for purposes of
determining the Executive's right following his or her termination of
employment with the Association to exercise any options or appreciation
rights not surrendered pursuant hereto, 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 Association, even if he or she is not vested under such
plan or program;
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(ix)
at the election of the Association made within thirty (30) days following
the Executive's termination of employment with the Association, upon the
surrender of any shares awarded to the Executive under any restricted
stock plan maintained by, or covering employees of, the Association, a
lump sum payment (the "RRP Surrender Payment") The RRP Surrender Payment
shall be calculated as follows:
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RSP
=
|
FMV
x N
|
where:
|
|
"RSP"
is the amount of the RRP Surrender Payment, before the deduction of
applicable federal, state and local withholding
taxes;
|
|
|
"FMV"
is the closing price of the Association's common stock on the NYSE, or on
whatever other stock exchange or market such stock is publicly traded, on
the date the Executive's employment terminates or, if such day is not a
day on which such securities are traded, on the preceding trading day on
which a trade occurs, provided however that if the restricted stock is a
security other than the Association's common stock, the fair market value
of a share of stock of the same class as the stock granted under such
plan, determined as of the date of termination of employment shall be
utilized; and
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"N"
is the number of shares which are being
surrendered.
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For
purposes of determining the RRP Surrender Payment and for purposes of
determining the Executive's right following his or her termination of
employment with the Association to any stock not surrendered pursuant
hereto, the Executive shall be deemed fully vested in all shares awarded
under any restricted stock plan maintained by, or covering employees of,
the Association, even if he or she is not vested under such plan provided,
however, that any shares of restricted stock for which vesting is
conditioned on the attainment of one or more performance goals, with the
intent that the award of such shares should satisfy the requirements of
qualified performance-based compensation (within the meaning of Treasury
Regulation section 1.162-27(e)), shall vest only in accordance with the
terms of the associated plan and award, and the Company’s right to elect
to purchase such shares pursuant to this Section 9(b)(ix) shall not expire
until thirty (30) days after such time as the vesting of such shares is no
longer conditioned on the attainment of any such performance
goal..
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The
Salary Severance Payment, the XX Xxxxxxxxx Payment, the Defined Contribution
Severance Payment, the Bonus Severance Payment, the Option Surrender Payment and
the RRP Surrender Payment shall be computed at the expense of the Association by
an attorney of the firm of Xxxxxxx Xxxxxxxx & Xxxx, Two World Financial
Center, New York, New York 10281 or, if such firm is unavailable or unwilling to
perform such calculation, by a firm of independent certified public accountants
selected by the Executive and reasonably satisfactory to the Association (the
"Computation Advisor"). The determination of the Computation Advisor as to the
amount of such payments shall be final and binding in the absence of manifest
error.
The
Association 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 Association and the Executive further agree that the
Association may condition the payment of the Salary Severance Payment, the XX
Xxxxxxxxx Payment, the Defined Contribution Severance Payment, the Bonus
Severance Payment, the Option Surrender Payment and the RRP Surrender Payment on
the receipt of the Executive's resignation from any and all positions which he
or she holds as an officer, director or committee member with respect to the
Association, the Company or any subsidiary or affiliate of either of them;
provided, however, that such election will only be effective if the Association
notifies the Executive of its election in writing within five (5) days of the
Executive's termination of employment.
Page 14
of 30
Section
10. Termination
without Additional Association Liability.
(a) In the event that the Executive's
employment with the Association shall terminate during the Employment Period on
account of:
(i) the
discharge of the Executive for Cause, which, for purposes of this Agreement
shall mean 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 any material
breach of this Agreement, in each case measured against standards generally
prevailing at the relevant time in the savings and community banking
industry;
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(ii)
the Executive's voluntary resignation from employment with the Association
for reasons other than those specified in Section 9(a) or
11(b);
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(iii)
the Executive's death;
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(iv)
a determination that the Executive is
Disabled;
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then the
Association, except as otherwise specifically provided herein, shall have no
further obligations under this Agreement, other than the payment to the
Executive (or, in the event of his or her death, to his or her estate) of the
amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the
“Standard Termination Entitlements”).
(b) The cessation of employment of the
Executive shall not be deemed to be for Cause within the meaning of Section
10(a)(i) unless and until:
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(i)
the Board, by the affirmative vote of 75% of its entire membership,
determines that the Executive is guilty of the conduct described in
Section 10(a)(i) above measured against standards generally prevailing at
the relevant time in the savings and community banking
industry;
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Page 15
of 30
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(ii)
prior to the vote contemplated by Section 10(b)(i), the Board shall
provide the Executive with notice of the Association's intent to discharge
the Executive for Cause, detailing with particularity the facts and
circumstances which are alleged to constitute Cause (the "Notice of Intent
to Discharge"); and
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(iii)
after the giving of the Notice of Intent to Discharge and before the
taking of the vote contemplated by Section 10(b)(i), the Executive,
together with the Executive's legal counsel, if the Executive so desires,
are afforded a reasonable opportunity to make both written and oral
presentations before the Board for the purpose of refuting the alleged
grounds for Cause for the Executive's discharge;
and
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(iv)
after the vote contemplated by Section 10(b)(i), the Association has
furnished to the Executive a notice of termination which shall specify the
effective date of the Executive's termination of employment (which shall
in no event be earlier than the date on which such notice is deemed given)
and include a copy of a resolution or resolutions adopted by the Board,
certified by its corporate secretary, authorizing the termination of the
Executive's employment with Cause and stating with particularity the facts
and circumstances found to constitute Cause for the Executive's discharge
(the "Final Discharge Notice").
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If the
Executive, during the ninety (90) day period commencing on the delivery by the
Association to the Executive of the Notice of Intent to Discharge specified in
Section 10(b)(ii), resigns his or her employment with the Association prior to
the delivery to the Executive by the Association of the Final Discharge Notice
specified in Section 10(b)(iv), than the cessation of employment of the
Executive shall be deemed to be for Cause.
Following
the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend
the Executive's duties and authority and, in such event, may also suspend the
payment of salary and other cash compensation, but not the Executive's
participation in retirement, insurance and other employee benefit plans. If the
Executive is not discharged or is discharged without Cause within forty-five
(45) days after the giving of a Notice of Intent to Discharge, payments of
salary and cash compensation shall resume, and all payments withheld during the
period of suspension shall be promptly restored. If the Executive is discharged
with Cause not later than forty-five (45) days after the giving of the Notice of
Intent to Discharge, all payments withheld during the period of suspension shall
be deemed forfeited and shall not be included in the Standard Termination
Entitlements. If a Final Discharge Notice is given later than forty-five (45)
days, but sooner than ninety (90) days, after the giving of the Notice of Intent
to Discharge, all payments made to the Executive during the period beginning
with the giving of the Notice of Intent to Discharge and ending with the
Executive's discharge with Cause shall be retained by the Executive and shall
not be applied to offset the Standard Termination Entitlements. If the Bank does
not give a Final Discharge Notice to the Executive within ninety (90) days after
giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall
be deemed withdrawn and any future action to discharge the Executive with Cause
shall require the giving of a new Notice of Intent to Discharge. If the
Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or
her right to suspended amounts that have not been restored as of the date of the
Executive's resignation or notice of resignation, whichever is
earlier.
Page 16
of 30
(c) The Association may terminate the
Executive's employment on the basis that the Executive is Disabled during the
Employment Period upon a determination by the Board, by the affirmative vote of
75% of its entire membership, acting in reliance on the written advice of a
medical professional acceptable to it, that the Executive is suffering from a
physical or mental impairment which, at the date of the determination, has
prevented the Executive from performing the Executive's assigned duties on a
substantially full-time basis for a period of at least one hundred and eighty
(180) days during the period of one (1) year ending with the date of the
determination or is likely to result in death or prevent the Executive from
performing the Executive's assigned duties on a substantially full-time basis
for a period of at least one hundred and eighty (180) days during the period of
one (1) year beginning with the date of the determination. In such
event:
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(A)
The Association shall pay and provide the benefits provided the Standard
Termination Entitlements to the
Executive;
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(B)
In addition to the Standard Termination Entitlements, the Association
shall continue to pay to the Executive the Executive's base salary, at the
annual rate in effect for the Executive immediately prior to the
termination of the Executive's employment, during a period ending on the
earliest of:
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(I)
the expiration of one hundred and eighty (180) days after the date of
termination of the Executive's
employment;
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(II)
the date on which long-term disability insurance benefits are first
payable to the Executive under any long-term disability insurance plan
covering the Executive; or
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(III)
the date of the Executive's death.
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A
termination of employment due to Disability under this Section shall be effected
by a notice of termination given to the Executive by the Association and shall
take effect on the later of the effective date of termination specified in such
notice or, if no such date is specified, the date on which the notice of
termination is deemed given to the Executive.
Section
11. Termination Upon
or Following a Change of Control.
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(a)
A Change of Control of the Association ("Change of Control") shall be
deemed to have occurred upon the happening of any of the following
events:
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(i)
the consummation of a transaction that results in the reorganization,
merger or consolidation of the Association with one or more other persons,
other than a transaction following
which:
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Page 17
of 30
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(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
(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 outstanding equity ownership interests in the
Association; and
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(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
Association;
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(ii)
the acquisition of all or substantially all of the assets of the
Association or beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the outstanding
securities of the Association entitled to vote generally in the election
of directors by any person or by any persons acting in
concert;
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(iii)
a complete liquidation or dissolution of the Association, or approval by
the stockholders of the Association of a plan for such liquidation or
dissolution;
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(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:
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(A)
individuals who were members of the Board on the Initial Effective Date;
or
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(B)
individuals who first became members of the Board after the Initial
Effective Date either:
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(I)
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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(II)
upon election by the stockholders of the Association 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, or of a nominating committee
thereof, in office at the time of such first
nomination;
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Page 18
of 30
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; or
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(v)
any event which would be described in Section 11(a)(i), (ii), (iii) or
(iv) if the term "Company" were substituted for the term "Association"
therein or the term "Board of Directors of the Company" were substituted
for the term "Board".
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In no
event, however, shall a Change of Control be deemed to have occurred as a result
of any acquisition of securities or assets of the Association, the Company, or
an affiliate or subsidiary of either of them, by the Association, the Company,
or a 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 of a Change of Control, the Executive shall be entitled to the
payments and benefits contemplated by Section 9(b) in the event of his or her
termination employment with the Association under any of the circumstances
described in Section 9(a) of this Agreement or under any of the following
circumstances:
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(i)
resignation, voluntary or otherwise, by the Executive at any time during
the Employment Period within six (6) months following his or her demotion,
loss of title, office or significant authority or responsibility or
following any reduction in any element of his or her package of
compensation and benefits;
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(ii)
resignation, voluntary or otherwise, by the Executive at any time during
the Employment Period within six (6) months following any relocation of
his or her principal place of employment or any change in working
conditions at such principal place of employment which the Executive, in
his or her reasonable discretion, determines to be embarrassing,
derogatory or otherwise adverse;
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(iii)
resignation, voluntary or otherwise, by the Executive at any time during
the Employment Period within six (6) months following the failure of any
successor to the Association in the Change of Control to include the
Executive in any compensation or benefit program maintained by it or
covering any of its executive officers, unless the Executive is already
covered by a substantially similar plan of the Association which is at
least as favorable to him or her;
or
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Page 19
of 30
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(iv)
resignation, voluntary or otherwise, for any reason whatsoever during the
Employment Period within six months following the effective date of the
Change of Control.
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Section 12. Covenant Not To
Compete.
The Executive hereby covenants and
agrees that, in the event of his or her termination of employment with the
Association prior to the expiration of the Employment Period, for a period of
one (1) year following the date of his or her termination of employment with the
Association (or, if less, for the Remaining Unexpired Employment Period), the
Executive shall not, without the written consent of the Association, 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 in any city, town or county in which the Association or the
Company has an office or has filed an application for regulatory approval to
establish an office, determined as of the effective date of the Executive's
termination of employment; provided, however, that this Section 12
shall not apply if the Executive's employment is terminated for the reasons set
forth in Section 9(a); and provided, further, that if the Executive's
employment shall be terminated on account of Disability as provided in Section
10(c) of this Agreement, this Section 12 shall not prevent the Executive from
accepting any position or performing any services if:
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(a)
he or she first offers, by written notice, to accept a similar position
with or perform similar services for the Association on substantially the
same terms and conditions and
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(b)
the Association declines to accept such offer within ten (10) days after
such notice is given.
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Section
13. Confidentiality.
Unless the Executive obtains the prior
written consent of the Association, the Executive shall keep confidential and
shall refrain from using for the benefit of the Executive or any person or
entity other than the Association, any entity which is a subsidiary of the
Association or any entity which the Association is a subsidiary of, any material
document or information obtained from the Association, or from its affiliates or
subsidiaries, in the course of the Executive's 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 or her own) until the same ceases to be material (or becomes so
ascertainable or available); provided, however that nothing in this
Section 13 shall prevent the Executive, with or without the Association'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.
Page 20
of 30
Section
14. Solicitation.
The Executive hereby covenants and
agrees that, for a period of one (1) year following the Executive's termination
of employment with the Association, he or she shall not, without the written
consent of the Association, either directly or indirectly:
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(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 Association, the Company
or any affiliate or subsidiary of ether of them, to terminate his or her
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 Association, savings and
loan holding company, or other institution engaged in the business of
accepting deposits and making loans, doing business in any city, town or
county in which the Association or the Company has an office or has filed
an application for regulatory approval to establish an
office;
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(b)
provide any information, advice or recommendation with respect to any such
officer or employee 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 and making
loans, doing business in any city, town or county in which the Association
or the Company has an office or has filed an application for regulatory
approval to establish an office 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 Association, the Company, or any
affiliate or subsidiary of either of them, to terminate his or her
employment and accept employment, become affiliated with or provide
services for compensation in any capacity whatsoever to any such 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 and making loans;
or
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(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 Association, the Company, or any affiliate or subsidiary of either of
them to terminate an existing business or commercial relationship with the
Association, the Company, or any affiliate or subsidiary of either of
them.
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Section
15. 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
Association or by the Executive, shall have no effect on the rights and
obligations of the parties hereto under the Association'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 Association from time to
time.
Page 21
of 30
Section
16. Successors and
Assigns.
This Agreement will inure to the
benefit of and be binding upon the Executive, his or her legal representatives
and testate or intestate distributees, and the Association 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 Association may be sold or
otherwise transferred. Failure of the Association to obtain from any successor
its express written assumption of the Association's obligations under this
Agreement at least sixty (60) days in advance of the scheduled effective date of
any such succession shall be deemed a material breach of this
Agreement.
Section
17. 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, 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:
Xxxx X. XxXxxx
00
Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
If to the
Association:
Astoria Federal Savings and Loan
Association
Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxx Xxxx
00000-0000
Attention: General Counsel
with a
copy to:
Xxxxxxx Xxxxxxxx &
Wood
Two World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxx Xxxxxx,
Esq.
Page 22
of 30
Section
18. Indemnification
for Attorneys' Fees.
The Association shall indemnify, hold
harmless and defend the Executive against reasonable costs, including legal
fees, incurred by him or her in connection with or arising out of any action,
suit or proceeding in which he or she may be involved, as a result of his or her
efforts, in good faith, to defend or enforce the terms of this Agreement;
provided, however, that in the case of any
action, suit or proceeding instituted prior to a Change of Control, the
Executive 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. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association'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. Any payment or reimbursement to effect such
indemnification shall be made no later than the last day of the calendar year
following the calendar year in which the Executive incurs the expense or, if
later, within sixty (60) days after the settlement or resolution that gives rise
to the Executive’s right to reimbursement; provided, however, that the Executive
shall have submitted to the Company documentation supporting such expenses at
such time and in such manner as the Company may reasonably require.
Section
19. 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
20. 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
21. Counterparts.
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
22. 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.
Page 23
of 30
Section
23. 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
24. 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; provided, however, that this Agreement shall be subject to amendment in
the future in such manner as the Association shall reasonably deem necessary or
appropriate to effect compliance with Section 409A of the Code and the
regulations thereunder, and to avoid the imposition of penalties and additional
taxes under Section 409A of the Code, it being the express intent of the parties
that any such amendment shall not diminish the economic benefit of the Agreement
to the Executive on a present value basis.
Section
25. Survival.
The
provisions of any sections of this Agreement which by its terms contemplates
performance after the expiration or termination of this Agreement (including,
but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26,
27, 28, 30 and 31) shall survive the expiration of the Employment Period or
termination of this Agreement.
Section
26. Equitable
Remedies.
The Association and the Executive
hereby stipulate that money damages are an inadequate remedy for violations of
Sections 6(a), 12, 13 or 14 of this Agreement and agree that equitable remedies,
including, without limitations, the remedies of specific performance and
injunctive relief, shall be available with respect to the enforcement of such
provisions.
Section 27. Required Regulatory
Provisions.
The following provisions are included
for the purposes of complying with various laws, rules and regulations
applicable to the Association:
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(a)
Notwithstanding anything herein contained to the contrary, in no event
shall the aggregate amount of compensation payable to the Executive
pursuant to Section 9(b) of this Agreement (exclusive of amounts described
in Section 9(b)(i), (ii), (viii) or (ix)) exceed three times the
Executive's average annual total compensation for the last five
consecutive calendar years to end prior to the Executive's termination of
employment with the Association (or for the Executive's entire period of
employment with the Association if less than five calendar
years).
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Page 24
of 30
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(b)
Notwithstanding anything herein contained to the contrary, any payments to
the Executive by the Association, 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 ("FDI Act"), 12 U.S.C.
§1828(k), and any regulations promulgated
thereunder.
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(c)
Notwithstanding anything herein contained to the contrary, if the
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Association pursuant to
a notice served under Section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C.
§1818(e)(3) or 1818(g)(1), the Association's obligations under this
Agreement shall be suspended as of the date of service of such notice,
unless stayed by appropriate proceedings. If the charges in
such notice are dismissed, the Association, in its discretion, may (i) pay
to the Executive all or part of the compensation withheld while the
Association's obligations hereunder were suspended and (ii) reinstate, in
whole or in part, any of the obligations which were
suspended.
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(d)
Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order
issued under Section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C.
§1818(e)(4) or (g)(1), all prospective obligations of the Association
under this Agreement shall terminate as of the effective date of the
order, but vested rights and obligations of the Association and the
Executive shall not be affected.
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(e)
Notwithstanding anything herein contained to the contrary, if the
Association is in default (within the meaning of Section 3(x)(1) of the
FDI Act, 12 U.S.C. §1813(x)(1), all prospective obligations of the
Association under this Agreement shall terminate as of the date of
default, but vested rights and obligations of the Association and the
Executive shall not be affected.
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(f)
Notwithstanding anything herein contained to the contrary, all prospective
obligations of the Association hereunder shall be terminated, except to
the extent that a continuation of this Agreement is necessary for the
continued operation of the Association: (i) by the Director of
the Office of Thrift Supervision ("OTS") or his or her designee or the
Federal Deposit Insurance Corporation ("FDIC"), at the time the FDIC
enters into an agreement to provide assistance to or on behalf of the
Association under the authority contained in Section 13(c) of the FDI Act,
12 U.S.C. §1823(c); (ii) by the Director of the OTS or his or her designee
at the time such Director or designee approves a supervisory merger to
resolve problems related to the operation of the Association or when the
Association is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties
shall not be affected.
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If and to
the extent that any of the foregoing provisions shall cease to be required or by
applicable law, rule or regulation, the same shall become inoperative as though
eliminated by formal amendment of this Agreement.
Section
28. No Offset or
Recoupment; No Attachment.
The Association's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations under this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Association or any of its affiliates or subsidiaries may have against the
Executive. 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. Except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation, or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void, and of no
effect.
Section 29. Compliance with Section 409A of the
Code.
The
Executive and the Association acknowledge that each of the payments and benefits
promised to the Executive under this Agreement must either comply with the
requirements of Section 409A of the Code ("Section 409A") and the regulations
thereunder or qualify for an exception from compliance. To that end,
the Executive and the Company agree that
(a) the
insurance benefits provided in section 6(a) and the indemnification provided in
section 6(b) are intended to be excepted from compliance with Section 409A
pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and
indemnification against claims based on acts or omissions as a service
provider;
(b) the
expense reimbursements described in Section 8 and legal fee reimbursements
described in Section 18 are intended to satisfy the requirements for a
"reimbursement plan" described in Treasury Regulation section
1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such
requirements;
(c) the
payment described in Section 9(b)(i) is intended to be excepted from compliance
with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as
payment made pursuant to the Company’s customary payment timing
arrangement;
(d) the
benefits and payments described in Section 9(b)(ii) are expected to comply with
or be excepted from compliance with Section 409A on their own
terms;
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(e) the
welfare benefits provided in kind under section 9(b)(iii) are intended to be
excepted from compliance with Section 409A as welfare benefits pursuant to
Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in
gross income; and
(f) the
benefits and payments on a disability described in Section 10(c) are expected to
be excepted from compliance with Section 409A as “disability pay” pursuant to
Treasury Regulation section 1.409A-1(a)(5).
In the
case of a payment that is not excepted from compliance with Section 409A, and
that is not otherwise designated to be paid immediately upon a permissible
payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the
payment shall not be made prior to, and shall, if necessary, be deferred (with
interest at the annual rate of 6%, compounded monthly from the date of the
Executive’s termination of employment to the date of actual payment) to and paid
on the later of the date sixty (60) days after the Executive’s earliest
separation from service (within the meaning of Treasury Regulation Section
1.409A-1(h)) and, if the Executive is a specified employee (within the meaning
of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation
from service, the first day of the seventh month following the Executive’s
separation from service. Each amount payable under this plan that is
required to be deferred beyond the Executive’s separation from service, shall be
deposited on the date on which, but for such deferral, the Association would
have paid such amount to the Executive, in a grantor trust which meets the
requirements of Revenue Procedure 92-65 (as amended or superseded from time to
time), the trustee of which shall be a financial institution selected by the
Association with the approval of the Executive (which approval shall not be
unreasonably withheld or delayed), pursuant to a trust agreement the terms of
which are approved by the Executive (which approval shall not be unreasonably
withheld or delayed) (the “Rabbi Trust”), and payments made shall include
earnings on the investments made with the assets of the Rabbi Trust, which
investments shall consist of short-term investment grade fixed income securities
or units of interest in mutual funds or other pooled investment vehicles
designed to invest primarily in such securities. Furthermore, this
Agreement shall be construed and administered in such manner as shall be
necessary to effect compliance with Section 409A.
Section
30. Compliance with Section
280G(e) of the Code.
In the event the Company or the
Association issues any debt or equity to the United States Treasury ("UST")
pursuant to the Capital Purchase Program (the "CPP") implemented under the
Emergency Economic Stabilization Act of 2008 ("EESA"), the following provisions
shall take precedence over any contrary provisions of this Agreement or any
other compensation or benefit plan, program, agreement or arrangement in which
the Executive participates:
(a) The Executive shall repay to the
Association any bonus or incentive compensation paid to the Executive while (i)
the Executive is a senior executive officer (within the meaning 31 C.F.R Part 30
("Senior Executive Officer") and (ii) the UST holds any debt or equity interest
in the Company or the Association acquired under the CPP (such Period the “CPP
Compliance Period”) if and to the extent that such bonus or incentive
compensation was paid on the basis of a statement of earnings, gains, or other
criteria (each, a "Performance Criteria," and in the aggregate, "Performance
Criteria") that are later proven to be materially inaccurate. A
Performance Criterion shall be proven to be materially inaccurate if so
determined by a court of competent jurisdiction or in the written opinion of the
Computation Advisor or, if the Computation Advisor is unable to provide the
determination, an independent attorney or firm of certified public accountants
selected by the Association and approved by the Executive (which approval shall
not be unreasonably withheld or delayed), which determination shall both state
the accurate Performance Criterion and that the difference between the accurate
Performance Criterion and the Performance Criterion on which the payment was
based is material (the "Determination"). Upon receipt of a
Determination, the Association may supply to the Executive a copy of the
Determination, a computation of the bonus or other incentive compensation that
would have been payable on the basis of the accurate Performance Criterion set
forth in the Determination (the "Determination Amount") and a written demand for
repayment of the amount (if any) by which the bonus or incentive compensation
actually paid exceeded the Determination Amount.
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(b) (i)
If the Executive’s employment terminates in an “applicable severance from
employment” (within the meaning of 31 C.F.R.Code Part 30) while (A) the
Executive is a Senior Executive Officer and (B) the UST holds any debt or equity
interest in the Company or the Association acquired under the CPP, then payments
to the Executive that are contingent on such applicable severance from
employment and are designated to be paid during the CPP Compliance Period shall
be limited, if necessary, to the maximum amount which may be paid without
causing any amount paid to be an "excess parachute payment" within the meaning
of section 280G(b)(1) of the Code, as modified by section 280G(e) of the Code,
referred to as a “golden Parachute Payment” under 31 C.F.R Part 30 (the "Maximum
Payment Amount"). Any reduction in payments required to achieve such
limit shall be applied to all payments otherwise due hereunder in the reverse
chronological order of their payment dates, and where multiple payments are due
on the same date, the reduction shall be apportioned ratably among the affected
payments. The required reduction (if any) shall be determined in
writing by the Computation Advisor or, if the Computation Advisor is unable to
provide the determination, by an independent attorney or firm of certified
public accountants selected by the Association and approved by the Executive
(which approval shall not be unreasonably withheld or delayed).
(ii) To
the extent not prohibited by law, the aggregate amount by which payments
designated to be paid during the CPP Compliance Period are reduced pursuant to
section 30(b)(i) (the "Unpaid Amount") shall be delayed to and shall be paid on
the first business day following the last day of the CPP Compliance
Period. Pending payment, the Unpaid Amount shall be deposited in a
Rabbi Trust. Payment of the Unpaid Amount shall include any
investment earnings on the assets of the Rabbi Trust attributable to the Unpaid
Amount.
Page 28
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This
section 30 shall be operated, administered and construed to comply with section
111(b) of EESA as implemented by guidance or regulation thereunder that has been
issued and is in effect as of the closing date of the agreement, if any, by and
between the Company, under which the UST acquires equity or debt securities of
the Company or the Association under the CPP (such date, if any, the “Closing
Date” and such implementation, the “Relevant Implementation”). If after such
Closing Date the clawback requirement of section 30(a) shall not be required by
the Relevant Implementation of Section 111(b) of EESA, such requirement shall
have no further effect. If after such Closing Date the limitation on golden
parachute payments under section 30(b)(i) shall not be required by the Relevant
Implementation of section 111(b) of EESA, such limitation shall have no further
effect and any Unpaid Amount delayed under section 30(b)(ii) shall be paid on
the earliest date on which the Association reasonably anticipates that such
amount may be paid and without violating such limitation.
In Witness
Whereof, the Association has caused this Agreement to be executed and the
Executive has hereunto set his or her hand, all as of the day and year first
above written.
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ATTEST:
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Astoria
Federal Savings and Loan Association
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/S/ Xxxx X. Xxxxxxxxx
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By: |
/S/
Xxxxxx X. Xxxxxxx, Xx.
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Xxxx
X. Xxxxxxxxx
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Name: |
Xxxxxx
X. Xxxxxxx, Xx.
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[Seal]
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Title: |
Chairman
and Chief Executive
Officer
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/S/
Xxxx X. XxXxxx
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Xxxx
X. XxXxxx
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Page 29
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STATE
OF NEW YORK
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)
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)
ss.:
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COUNTY
OF NASSAU
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)
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On this 31 day of December, 2008,
before me, the undersigned, personally appeared Xxxxxx X. Xxxxxxx,
Xx., personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
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/S/ Xxxxxxxxx
Xxxxxxxxx
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Notary
Public
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Xxxxxxxxx
Xxxxxxxxx
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Notary
Public, State of New York
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No.
4998931
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Qualified
in Suffolk County
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Commission
Expires 7/13/2010
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STATE
OF NEW YORK
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)
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|
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)
ss.:
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COUNTY
OF NASSAU
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)
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On this 31 day of December, 2008,
before me, the undersigned, personally appeared Xxxx X. XxXxxx, personally known
to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
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/S/ Xxxxxxxxx
Xxxxxxxxx
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Notary
Public
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Xxxxxxxxx
Xxxxxxxxx
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Notary
Public, State of New York
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|
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No.
4998931
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Qualified
in Suffolk County
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Commission
Expires 7/13/2010
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Page 30
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