ADDENDUM TO
EMPLOYMENT AGREEMENT
BY AND BETWEEN
THE BANK OF XXXXXX COUNTY,
XXXXXX COUNTY BANCORP, INC.
AND
XXXXXX X. XXXXXX
This Addendum (the "Addendum") to that certain employment agreement (the
"Employment Agreement") by and between The Bank of Xxxxxx County, a federally
chartered stock savings bank (the "Bank"), with its principal administrative
office at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, Xxxxxx Xxxxxx Bancorp, Inc., the
holding company of the Bank (the "Company"), and Xxxxxx X. Xxxxxx (the
"Executive") is made effective as of this 26th day of November, 2008.
WHEREAS, the Executive is currently employed as President and Chief
Executive Officer of the Bank and the Company; and
WHEREAS, the Bank, the Company and the Executive desire to revise the
Employment Agreement to comply with the final treasury regulations promulgated
under Code Section 409A.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the Bank, the Company and the Executive
hereby agree to the following amendments to the Employment Agreement, it being
understood and agreed that except to the amendments specifically provided for
herein, the remaining terms of the Employment Agreement shall remain in full
force and effect:
1. Section 3(d) of the Employment Agreement shall be revised by adding the
following sentence to the end thereof:
"All such reimbursements and compensation pursuant to this Section 3 shall be
paid promptly and in any event no later than March 15 of the year immediately
following the year in which the expense was incurred or the compensation was
earned."
2. Section 4(a)(ii) of the Employment Agreement shall be amended by
revising the last paragraph thereof to read as follows:
"Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D)
or (E), above, the Executive shall have the right to elect to terminate his
employment under this Agreement by resignation upon sixty (60) days prior
written notice given within a reasonable period of time not to exceed four
calendar months after the initial event giving rise to said right to elect.
Notwithstanding the preceding sentence, in the event of a continuing breach of
this Agreement by the Bank, the Executive, after giving due notice within the
prescribed time frame of an initial event specified above, shall not waive any
of his rights solely under this Agreement and this Section 4 by virtue of the
fact that the Executive has submitted his resignation but has remained in the
employment of the Bank and is engaged in good faith discussions to resolve any
occurrence of an event described in clauses (A), (B), (C), (D) and (E) above."
3. Section 4(b) of the Employment Agreement is revised to change the
reference to "Executive's termination" to "Executive's Date of Termination" in
the second sentence thereof and to delete the third sentence thereof.
4. Section 4(e) is revised by adding the following to the end thereof:
"In the event a reduction is necessary, Executive shall be permitted to
determine the benefits to be reduced hereunder to avoid an excess parachute
payment, provided that the exercise of such discretion would not be deemed to
violate Code Section 409A. If Executive's exercise of discretion would be deemed
to violate Code Section 409A, then the reduction shall be made first from the
cash severance payable and then from the non-taxable medical benefits, but only
to the extent necessary to be a Non-Triggering Amount."
5. Section 4(g) is hereby added and shall state as follows:
"(g) For purposes of this Section 4, an "Event of Termination" as used
herein shall mean "Separation from Service" as defined in Code Section 409A and
the Treasury Regulations promulgated thereunder, provided, however, that the
Bank and the Executive reasonably anticipate that the level of bona fide
services the Executive would perform after termination would permanently
decrease to a level that is less than 50% of the average level of bona fide
services performed (whether as an employee or an independent contractor) over
the immediately preceding 12-month period.
6. The second paragraph of Section 5 shall be revised to read as follows:
"In the event the Executive is unable to perform his duties under this
Agreement on a full-time basis for a period of six (6) consecutive months by
reason of "Disability,", the Employer may terminate this Agreement, provided
that the Employer shall continue to be obligated to pay the Executive his Base
Salary for the remaining term of the Agreement, or one year, whichever is the
longer period of time, in accordance with the regular payroll practices of the
Bank, and provided further that any amounts actually paid to the Executive
pursuant to any disability insurance or other similar such program which the
Employer has provided or may provide on behalf of its employees or pursuant to
any xxxxxxx'x or social security disability program shall reduce the
compensation to be paid to the Executive pursuant to this paragraph. For these
purposes, the Executive shall be deemed to have a "Disability" in any case in
which it is determined: (i) the Executive is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last for a continuous
period of not less than 12 months; (ii) by reason of any medically determinable
physical or mental impairment which can be expected to result in death, or last
for a continuous period of not less than 12 months, and the Executive is
receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Bank; or (iii) by
the Social Security Administration, that the Executive is totally disabled."
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7. The following paragraph shall be added to the end of Section 5 and shall
read as follows:
"The payment of Base Salary to an Executive following Disability or to the
legal representative or beneficiary of a deceased Executive shall be made in
accordance with the Bank's normal payroll practices."
8. The following is added to the end of the first sentence of Section 18:
", and that such payment or reimbursement shall occur no later than two and
one-half months after the dispute is settled in the Executive's favor."
IN WITNESS WHEREOF, the Bank and the Company have caused this Addendum to
be executed on their behalf by their duly authorized officers, and Executive has
set his hand as of the date first written above.
THE BANK OF XXXXXX COUNTY
Dated: November 26, 2008 By: /s/ Xxxxxxx X. Main
---------------------------------------
XXXXXX COUNTY BANCORP, INC.
Dated: November 26, 2008 By: /s/ Xxxxxxxx Xxxxxxx
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EXECUTIVE
Dated: November 26, 2008 By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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