ABINGTON BANK EMPLOYMENT AGREEMENT
EXHIBIT 10.1
ABINGTON BANK
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into as of the 4th day of August,
2009, between Abington Savings Bank, a Pennsylvania chartered, stock-form savings bank doing
business as “Abington Bank” (the “Bank” or the “Employer”), and Xxxxxx X. Xxxxxxxxx (the
“Executive”).
WITNESSETH
WHEREAS, the Executive is currently employed as Senior Vice President and Chief Lending
Officer of the Bank; and
WHEREAS, the Bank desires to be ensured of the Executive’s continued participation in the
business of the Bank;
NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the
Bank and the Executive hereby agree as follows:
1. Definitions. The following words and terms shall have the meanings set forth below for the
purposes of this Agreement:
(a) Base Salary. “Base Salary” shall have the meaning set forth in Section 3(a) hereof.
(b) Cause. Termination by the Employer of the Executive’s employment for “Cause” shall mean
termination because of 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, willful conduct which is materially detrimental (monetarily or otherwise)
to the Employer or material breach of any provision of this Agreement.
(c) Change in Control. “Change in Control” shall mean a change in the ownership of the
Corporation or the Bank, a change in the effective control of the Corporation or the Bank or a
change in the ownership of a substantial portion of the assets of the Corporation or the Bank, in
each case as provided under Section 409A of the Code and the regulations thereunder.
(d) Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.
(e) Corporation. “Corporation” shall mean Abington Bancorp, Inc., a Pennsylvania corporation,
or any successor thereto.
(f) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment
is terminated for Cause, the date on which the Notice of Termination is given, and (ii) if the
Executive’s employment is terminated for any other reason, the date specified in such Notice of
Termination.
(g) Disability. “Disability” shall mean the Executive (i) 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 can be expected to last for a continuous period of not
less than 12 months, or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the Employer.
(h) Good Reason. Termination by the Executive of the Executive’s employment for “Good Reason”
shall mean termination by the Executive based on the occurrence of any of the following events:
| (i) | any material breach of this Agreement by the Employer, including without limitation any of the following: (A) a material diminution in the Executive’s base compensation, (B) a material diminution in the Executive’s authority, duties or responsibilities, or (C) a material diminution in the authority, duties or responsibilities of the officer to whom the Executive is required to report, or |
| (ii) | any material change in the geographic location at which the Executive must perform his services under this Agreement; |
provided, however, that prior to any termination of employment for Good Reason, the Executive must
first provide written notice to the Employer within ninety (90) days of the initial existence of
the condition, describing the existence of such condition, and the Employer shall thereafter have
the right to remedy the condition within thirty (30) days of the date the Employer received the
written notice from the Executive. If the Employer remedies the condition within such thirty (30)
day cure period, then no Good Reason shall be deemed to exist with respect to such condition. If
the Employer does not remedy the condition within such thirty (30) day cure period, then the
Executive may deliver a Notice of Termination for Good Reason at any time within sixty (60) days
following the expiration of such cure period.
(i) IRS. “IRS” shall mean the Internal Revenue Service.
(j) Notice of Termination. Any purported termination of the Executive’s employment by the
Employer for any reason, including without limitation for Cause, Disability or Retirement, or by
the Executive for any reason, including without limitation for Good Reason, shall be communicated
by a written “Notice of Termination” to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a dated notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated, (iii) specifies a Date of Termination, which shall be not less than fifteen
(15) nor more than ninety (90) days after such Notice of Termination is given, except in the case
of the Employer’s termination of the Executive’s employment for Cause, which shall be effective
immediately; and (iv) is given in the manner specified in Section 10 hereof.
(k) Retirement. “Retirement” shall mean voluntary termination by the Executive in accordance
with the Employer’s retirement policies, including early retirement, generally applicable to the
Employer’s salaried employees.
2. Term of Employment.
(a) The Employer hereby employs the Executive as Senior Vice President and Chief Lending
Officer, and the Executive hereby accepts said employment and agrees to render such services to the
Employer on the terms and conditions set forth in this Agreement. Subject to the terms hereof, this
Agreement shall terminate three (3) years after January 1, 2009 (the “Commencement Date”).
Beginning on the day which is one year subsequent to the Commencement Date, and on each annual
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anniversary thereafter, the term of this Agreement shall be extended for a period of one additional year provided that the
Employer has not given notice to the Executive in writing at least 30 days prior to such day that
the term of this Agreement shall not be extended further and/or the Executive has not given notice
to the Employer of his election not to extend the term at least thirty (30) days prior to any such
anniversary date. If any party gives timely notice that the term will not be extended as of any
such annual anniversary date, then this Agreement shall terminate at the conclusion of its
remaining term. References herein to the term of this Agreement shall refer both to the initial
term and successive terms.
(b) During the term of this Agreement, the Executive shall perform such executive services for
the Employer as is consistent with his title of Senior Vice President and from time to time
assigned to him by the Employer’s Board of Directors.
3. Compensation and Benefits.
(a) The Employer shall compensate and pay the Executive for his services during the term of
this Agreement at a minimum base salary of $121,000 per year (“Base Salary”), which may be
increased from time to time in such amounts as may be determined by the Board of Directors of the
Employer and may not be decreased without the Executive’s express written consent. In addition to
his Base Salary, the Executive shall be entitled to receive during the term of this Agreement such
bonus payments as may be determined by the Board of Directors of the Employer.
(b) During the term of this Agreement, the Executive shall be entitled to participate in and
receive the benefits of any pension or other retirement benefit plan, profit sharing, stock option,
employee stock ownership, or other plans, benefits and privileges given to employees and executives
of the Employer, to the extent commensurate with his then duties and responsibilities, as fixed by
the Board of Directors of the Employer. The Employer shall not make any changes in such plans,
benefits or privileges which would adversely affect the Executive’s rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all executive officers of the
Employer and does not result in a proportionately greater adverse change in the rights of or
benefits to the Executive as compared with any other executive officer of the Employer. Nothing
paid to the Executive under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to the Executive pursuant to Section
3(a) hereof.
(c) During the term of this Agreement, the Executive shall be entitled to paid annual vacation
in accordance with the policies as established from time to time by the Board of Directors of the
Employer. The Executive shall not be entitled to receive any additional compensation from the
Employer for failure to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the Board of Directors
of the Employer.
4. Expenses. The Employer shall reimburse the Executive or otherwise provide for or pay for
all reasonable expenses incurred by the Executive in furtherance of, or in connection with the
business of the Employer, including, but not by way of limitation, automobile and traveling
expenses, subject to such reasonable documentation and other limitations as may be established by
the Board of Directors of the Employer. If such expenses are paid in the first instance by the
Executive, the Employer shall reimburse the Executive therefor. Such reimbursement shall be paid
promptly by the Employer and in any event no later than March 15 of the year immediately following
the year in which such expenses were incurred.
5. Termination.
(a) General. The Employer shall have the right, at any time upon prior Notice of Termination,
to terminate the Executive’s employment hereunder for any reason, including without limitation
termination
for Cause, Disability or Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.
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(b) Termination for Cause or Voluntary Resignation. In the event that (i) the Executive’s
employment is terminated by the Employer for Cause, or (ii) the Executive terminates his employment
hereunder other than for Good Reason, the Executive shall have no right pursuant to this Agreement
to compensation or other benefits for any period after the applicable Date of Termination.
(c) Termination Due to Disability, Retirement or Death. In the event that the Executive’s
employment is terminated as a result of Disability, Retirement or the Executive’s death during the
term of this Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of Termination.
(d) Involuntary or Good Reason Termination Prior to a Change in Control. In the event that
(i) the Executive’s employment is terminated by the Employer for other than Cause, Disability,
Retirement or the Executive’s death or (ii) such employment is terminated by the Executive for Good
Reason, in each case prior to a Change in Control, then the Employer shall:
(A) pay to the Executive in a lump sum as of the Date of Termination, a cash severance
amount equal to the product of two (2) times (i) the Executive’s then current Base Salary,
and (ii) the cash bonus paid to the Executive by the Employer for the calendar year
preceding the Date of Termination; and
(B) maintain and provide for a period ending at the earlier of (i) twenty-four (24)
months subsequent to the Date of Termination or (ii) the date of the Executive’s full-time
employment by another employer (provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those described in this subparagraph
(B)), with the Executive responsible for paying the same share of any premiums, co-payments
or deductibles as if he was still an employee, the Executive’s continued participation in
all group insurance, life insurance, health and accident, and disability insurance coverage
offered by the Employer in which the Executive was participating immediately prior to the
Date of Termination; provided that any insurance premiums payable by the Employer or any
successors pursuant to this Section 5(d)(B) shall be payable at such times and in such
amounts as if the Executive was still an employee of the Employer, subject to any increases
in such amounts imposed by the insurance company or COBRA, and the amount of insurance
premiums required to be paid by the Employer in any taxable year shall not affect the amount
of insurance premiums required to be paid by the Employer in any other taxable year; and
provided further that if the Executive’s participation in any group insurance plan is
barred, the Employer shall arrange to provide the Executive with insurance benefits
substantially similar to those which the Executive was entitled to receive under such group
insurance plan at no additional cost to the Executive; and
(C) pay to the Executive, in a lump sum as of the Date of Termination, a cash amount
equal to the projected cost to the Employer of providing benefits to the Executive for a
period of twenty-four (24) months pursuant to any other employee benefit plans, programs or
arrangements offered by the Employer in which the Executive was entitled to participate
immediately prior to the Date of Termination (other than cash bonus plans, retirement plans
or stock compensation plans of the Employer or the Corporation), with the projected cost to
the Employer to be based on the costs incurred for the calendar year immediately preceding
the year in which the Date of Termination occurs and with any automobile-related costs to
exclude any depreciation on Bank-owned automobiles.
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(e) Involuntary or Good Reason Termination Concurrently with or Subsequent to a Change in
Control. In the event that (i) the Executive’s employment is terminated by the Employer for other
than Cause, Disability, Retirement or the Executive’s death or (ii) such employment is terminated
by the Executive for Good Reason, in each case either concurrently with or within two years
subsequent to a Change in Control, then the Employer shall, subject to the provisions of Section 6
hereof, if applicable,
(A) pay to the Executive, in a lump sum as of the Date of Termination, a cash severance
amount equal the product of three (3) times (i) the Executive’s then current Base Salary,
and (ii) the cash bonus paid to the Executive by the Employer for the calendar year
preceding the Date of Termination; and
(B) maintain and provide for a period ending at the earlier of (i) thirty-six (36)
months subsequent to the Date of Termination or (ii) the date of the Executive’s full-time
employment by another employer (provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those described in this subparagraph
(B)), with the Executive responsible for paying the same share of any premiums, co-payments
or deductibles as if he was still an employee, the Executive’s continued participation in
all group insurance, life insurance, health and accident, and disability insurance coverage
offered by the Employer in which the Executive was participating immediately prior to the
Date of Termination; provided that any insurance premiums payable by the Employer or any
successors pursuant to this Section 5(e)(B) shall be payable at such times and in such
amounts as if the Executive was still an employee of the Employer, subject to any increases
in such amounts imposed by the insurance company or COBRA, and the amount of insurance
premiums required to be paid by the Employer in any taxable year shall not affect the amount
of insurance premiums required to be paid by the Employer in any other taxable year; and
provided further that if the Executive’s participation in any group insurance plan is
barred, the Employer shall arrange to provide the Executive with insurance benefits
substantially similar to those which the Executive was entitled to receive under such group
insurance plan at no additional cost to the Executive; and
(C) pay to the Executive, in a lump sum as of the Date of Termination, a cash amount
equal to the projected cost to the Employer of providing benefits to the Executive for a
period of thirty-six (36) months pursuant to any other employee benefit plans, programs or
arrangements offered by the Employer in which the Executive was entitled to participate
immediately prior to the Date of Termination (other than cash bonus plans, retirement plans
or stock compensation plans of the Employer or the Corporation), with the projected cost to
the Employer to be based on the costs incurred for the calendar year immediately preceding
the year in which the Date of Termination occurs and with any automobile-related costs to
exclude any depreciation on Bank-owned automobiles.
6. Limitation of Benefits under Certain Circumstances. If the payments and benefits pursuant
to Section 5 hereof, either alone or together with other payments and benefits which the Executive
has the right to receive from the Employer, would constitute a “parachute payment” under Section
280G of the Code, then the payments and benefits payable by the Employer pursuant to Section 5
hereof shall be reduced by the minimum amount necessary to result in no portion of the payments and
benefits under Section 5 being non-deductible to the Employer pursuant to Section 280G of the Code
and subject to the excise tax imposed under Section 4999 of the Code. If the payments and benefits
under Section 5 are required to be reduced, the cash severance shall be reduced first, followed by
a reduction in the fringe benefits. The determination of any reduction in the payments and
benefits to be made pursuant to Section 5 shall be based upon the opinion of independent tax
counsel selected by the Employer and paid by the Employer. Such counsel shall promptly prepare the
foregoing opinion, but in no event later than ten (10) days from the Date of Termination, and may
use such actuaries as such counsel deems necessary or advisable for the purpose.
Nothing contained herein shall result in a reduction of any payments or benefits to which the
Executive may be entitled upon termination of employment under any circumstances other than as
specified in this Section 6, or a reduction in the payments and benefits specified in Section 5
below zero.
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7. Mitigation; Exclusivity of Benefits.
(a) The Executive shall not be required to mitigate the amount of any benefits hereunder by
seeking other employment or otherwise, nor shall the amount of any such benefits be reduced by any
compensation earned by the Executive as a result of employment by another employer after the Date
of Termination or otherwise, except as set forth in Sections 5(d)(B)(ii) and 5(e)(B)(ii) hereof.
(b) The specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of employment with the Employer
pursuant to employee benefit plans of the Employer or otherwise.
8. Withholding. All payments required to be made by the Employer hereunder to the Executive
shall be subject to the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Employer may reasonably determine should be withheld pursuant to any applicable
law or regulation.
9. Assignability. The Employer may assign this Agreement and its rights and obligations
hereunder in whole, but not in part, to any corporation, bank or other entity with or into which
the Employer may hereafter merge or consolidate or to which the Employer may transfer all or
substantially all of its assets, if in any such case said corporation, bank or other entity shall
by operation of law or expressly in writing assume all obligations of the Employer hereunder as
fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement
or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement
or any rights or obligations hereunder.
10. Notice. For the purposes of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below:
| To the Employer: | Board of Directors | |||
| Abington Savings Bank | ||||
| 000 Xxx Xxxx Xxxx | ||||
| Xxxxxxxxxx, Xxxxxxxxxxxx | ||||
| To the Executive: | Xxxxxx X. Xxxxxxxxx | |||
| At the address last appearing on the | ||||
| personnel records of the Employer |
11. Amendment; Waiver. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by the Executive
and such officer or officers as may be specifically designated by the Board of Directors of the
Employer to sign on its behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. In addition, notwithstanding anything
in this Agreement to the contrary, the Bank may amend in good faith any terms of this Agreement,
including retroactively, in order to comply with Section 409A of the Code.
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12. Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the United States where applicable and otherwise by the
substantive laws of the Commonwealth of Pennsylvania.
13. Validity. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement, which shall remain
in full force and effect.
14. Arbitration. Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration in accordance with the rules then in effect for
the American Arbitration Association, Philadelphia, Pennsylvania, and judgment upon the award
rendered may be entered in any court having jurisdiction thereof.
15. Nature of Obligations. Nothing contained herein shall create or require the Employer to
create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent
that the Executive acquires a right to receive benefits from the Employer hereunder, such right
shall be no greater than the right of any unsecured general creditor of the Employer.
16. Headings. The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.
17. Changes in Statutes or Regulations. If any statutory or regulatory provision referenced
herein is subsequently changed or re-numbered, or is replaced by a separate provision, then the
references in this Agreement to such statutory or regulatory provision shall be deemed to be a
reference to such section as amended, re-numbered or replaced.
18. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one and the same
instrument.
19. Regulatory Prohibition. Notwithstanding any other provision of this Agreement to the
contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, are subject
to and conditioned upon their compliance with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and
the regulations promulgated thereunder, including 12 C.F.R. Part 359. In the event of the
Executive’s termination of employment with the Bank for Cause, all employment relationships and
managerial duties with the Bank shall immediately cease regardless of whether the Executive is in
the employ of the Corporation following such termination. Furthermore, following such termination
for Cause, the Executive will not, directly or indirectly, influence or participate in the affairs
or the operations of the Bank.
20. Payment of Costs and Legal Fees and Reinstatement of Benefits. In the event any dispute
or controversy arising under or in connection with the Executive’s termination is resolved in favor
of the Executive, whether by judgment, arbitration or settlement, the Executive shall be entitled
to the payment of (a) all legal fees incurred by the Executive in resolving such dispute or
controversy, and (b) any back-pay, including Base Salary, bonuses and any other cash compensation,
fringe benefits and any compensation and benefits due to the Executive under this Agreement, within
thirty (30) days following the date such judgment, arbitration or settlement becomes final and
non-appealable.
21. Entire Agreement. This Agreement embodies the entire agreement between the Employer and
the Executive with respect to the matters agreed to herein. All prior agreements between the
Employer and the Executive with respect to the matters agreed to herein are hereby superseded and
shall have no force or effect.
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IN WITNESS WHEREOF, this Agreement is effective as of the date first written above.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
| Attest | ABINGTON SAVINGS BANK | |||||||
/s/ Xxxxx Xxxxxxxxxx
|
By: | /s/ Xxxxxx X. Xxxxx
|
||||||
| President and Chief Executive Officer | ||||||||
| EXECUTIVE | ||||||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |||||||
| Xxxxxx X. Xxxxxxxxx | ||||||||
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