Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 1st day of April, 1998, by and between Catskill Financial Corporation, a
corporation organized and operating under the laws of the State of Delaware and
having an office at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company"),
and Xxxxxx X.Xxxxx, residing at 00 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000.
WHEREAS, Xx. Xxxxx currently serves the Company as President and Chief
Executive Officer; and
WHEREAS, in order to secure Xx. Xxxxx' continued services, the Board of
Directors of the Company (the "Board") has approved and authorized the execution
of this Agreement; and
WHEREAS, Xx. Xxxxx is willing to continue to make his services
available to the Company on the terms and conditions set forth herein; and
WHEREAS, on or about even date, Xx. Xxxxx and Catskill Savings Bank
(the "Bank") entered into an Employment Agreement (the "Bank Employment
Agreement"); and
WHEREAS, the Company is a savings and loan holding company of which the
Bank is a wholly owned subsidiary.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto hereby agree as follows:
1. EMPLOYMENT. The Company hereby continues the employment of Xx. Xxxxx
as its President and Chief Executive Officer, and Xx. Xxxxx hereby accepts such
continued employment, during the period and upon the terms and conditions set
forth in this Agreement.
2. EMPLOYMENT PERIOD, TERMS AND CONDITIONS. The employment period,
terms and conditions of this Agreement shall be identical to those in the Bank
Employment Agreement unless explicitly superseded or expanded upon by this
Agreement.
3. COMPENSATION AND BENEFITS. The compensation and benefits payable to
Xx. Xxxxx under this Agreement and under the Bank Employment Agreement shall not
be: (a) duplicative but, rather, the Bank shall be primarily responsible for the
payments called for in the Bank's Employment Agreement and the Company hereby
guarantees performance of such obligations by the Bank; or (b) limited by
paragraph 8 of the Bank Employment Agreement.
4. EXCISE TAX INDEMNIFICATION.
(a) This Section 4 shall apply if Xx. Xxxxx' employment is terminated
in circumstances giving rise to liability for excise taxes under Section 4999 of
the Internal Revenue Code of 1986 (the "Code"). If this Section 4 applies, then,
if for any taxable year, Xx. Xxxxx shall be liable for the payment of an excise
tax under Section 4999 of the Code with respect to any payment in the nature of
compensation made by the Company or the Bank to (or for the benefit of) Xx.
Xxxxx, the Company shall pay to Xx. Xxxxx an amount equal to X determined under
the following formula:
E x P
X = _______________________________
1-[(FI x (1 - SLI) + SLI + EM]
where
E = the rate at which the excise tax is
assessed under Section 4999 of the Code;
P = the amount with respect to which
such excise tax is assessed, determined
without regard to this Section 4;
FI = the highest marginal rate of income
tax applicable to Xx. Xxxxx under the
Code for the taxable year in question;
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SLI = the sum of the highest marginal rates
of income tax applicable to Xx. Xxxxx
under all applicable state and local
laws for the taxable year in question;
and
M = the highest marginal rate of Medicare
tax applicable to Xx. Xxxxx under
the Code for the taxable year in
question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Xx. Xxxxx under the terms of this Agreement, or otherwise,
and on which an excise tax under Section 4999 of the Code will be assessed, the
payment determined under this Section 4(a) shall be made to Xx. Xxxxx on the
earlier of (i) the date the Company or the Bank is required to withhold such
tax, or (ii) the date the tax is required to be paid by Xx. Xxxxx.
(b) Notwithstanding anything in this Section 4 to the contrary, in the
event that Xx. Xxxxx' liability for the excise tax under Section 4999 of the
Code for a taxable year is subsequently determined to be different than the
amount determined by the formula (X + P) x E, where X, P and E have the meanings
provided in Section 4(a), Xx. Xxxxx or the Company, as the case may be, shall
pay to the other party at the time that the amount of such excise tax is finally
determined, an appropriate amount, plus interest, such that the payment made
under Section 4(a), when increased by the amount of the payment made to Xx.
Xxxxx under this Section 4(b) by the Company, or when reduced by the amount of
the payment made to the Company under this Section 4(b) by Xx. Xxxxx, equals the
amount that should have properly been paid to Xx. Xxxxx under Section 4(a). The
interest paid under this Section 4(b) shall be determined at the rate provided
under Section 1274(b)(2)(B) of the Code. To confirm that the proper amount, if
any, was paid to Xx. Xxxxx under this Section 4, Xx. Xxxxx shall furnish to the
Company a copy of each tax return which reflects a liability for an excise tax
payment made by the Company, at least 20 days before the date on which such
return is required to be filed with the Internal Revenue Service.
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(c) The provisions of this Section 4 are designed to reflect the
provisions of applicable federal, state and local tax laws in effect on the date
of this Agreement. If, after the date hereof, there shall be any change in any
such laws, this Section 4 shall be modified in such manner as Xx. Xxxxx and the
Company may mutually agree upon if and to the extent necessary to assure that
Xx. Xxxxx is fully indemnified against the economic effects of the tax imposed
under Section 4999 of the Code or any similar federal, state or local tax.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and Xx. Xxxxx has hereto set his hand, all as of the day and year first
above written.
/s/ Xxxxxx X. Xxxxx
-------------------------------------
XXXXXX X. XXXXX
Chairman/President/CEO
WITNESS:
/s/ Xxxxx X. Xxxxxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXXXXX
VP/Secretary
CATSKILL FINANCIAL CORPORATION
By /s/ Xxxxx Xxxx
-------------------------------------
Director
ATTEST:
/s/ Xxxxx X. Xxxxxxxxxxx
----------------------------------
VP/Secretary
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