AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT BETWEEN WILLOW FINANCIAL BANK AND NEELESH KALANI
Exhibit 10.6
AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT
BETWEEN WILLOW FINANCIAL BANK AND XXXXXXX XXXXXX
THIS AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is dated as of October 23, 2007 and is between Willow Financial Bank, a federally chartered savings bank (the “Bank” or the “Employer”), and Xxxxxxx Xxxxxx (the “Officer”).
WHEREAS, the Bank was previously known as Willow Grove Bank;
WHEREAS, the Officer is currently employed by the Bank, and the Bank and the Officer have previously entered into a change in control severance agreement dated January 18, 2006 (the “Prior Agreement”);
1. Definitions. The following words and terms shall have the meanings set forth below for the purposes of this Agreement:
(d) Corporation. “Corporation” shall mean Willow Financial Bancorp, Inc.
(g) Effective Date. The Effective Date of this Agreement shall mean the date first above written.
(h) Good Reason. Termination by the Officer of the Officer’s employment for “Good Reason” shall mean termination by the Officer based on the occurrence of any of the following events:
(i) (A) a material diminution in the Officer’s base compensation as in effect immediately prior to the date of the Change in Control or as the same may be increased from time to time thereafter, (B) a material diminution in the Officer’s authority, duties or responsibilities as in effect immediately prior to the Change in Control, or (C) a material diminution in the authority, duties or responsibilities of the officer (as in effect immediately prior to the date of the Change in Control) to whom the Officer is required to report immediately prior to the Change in Control,
(ii) any material breach of this Agreement by the Employer, or
(iii) any material change in the geographic location at which the Officer must perform his services under this Agreement immediately prior to the Change in Control;
provided, however, that prior to any termination of employment for Good Reason, the Officer must first provide written notice to the Employer within ninety (90) days of the initial existence of the
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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 Officer. 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 Officer 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.
(c) Change in Control Termination. In the event that (i) the Officer’s employment is terminated concurrently with or within twelve (12) months following a Change in Control for other than Cause, Disability, Retirement or the Officer’s death, or (ii) the Officer elects to terminate his employment for Good Reason, then the Employer shall, subject to the provisions of Sections 3 and 4 hereof, if applicable,
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(A) pay to the Officer, in twelve (12) equal monthly installments commencing with the first business day of the month immediately following the Date of Termination, a cash severance amount equal to one (1) times the Officer’s Average Annual Compensation; provided that if the aggregate amount of such installment payments would exceed two times the lesser of the amounts specified in subsections (1) and (2) of Treasury Regulation §1.409A-1(b)(9)(iii)(A), then the monthly installments shall not commence until the first business day of the month following the lapse of six months from the Date of Termination (the “Delayed Payment Date”), with the monthly installments that would have been paid prior to the Delayed Payment Date absent the six-month delay required by Section 409A of the Code to be aggregated and included in the payment made on the Delayed Payment Date and to be counted toward the total of twelve (12) monthly installments; and
3. Limitation of Benefits under Certain Circumstances. If the payments and benefits pursuant to Section 2 hereof, either alone or together with other payments and benefits which the Officer has the right to receive from the Employer and its affiliates, would constitute a “parachute payment” under Section 280G of the Code, then the payments and benefits payable by the Employer pursuant to Section 2 hereof shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable by the Employer under Section 2 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 2 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 2 shall be based upon the opinion of independent counsel selected by the Employer and paid by the Employer. Such counsel shall promptly prepare the foregoing opinion, but in no event later than
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4. Mitigation; Exclusivity of Benefits.
(a) The Officer shall not be required to mitigate the amount of any benefits hereunder by seeking other employment or otherwise. However, the amount of severance compensation payable by the Employer under Section 2(c)(A) shall be reduced to the extent the Officer earns compensation from any source for services rendered by the Officer within one year following the Date of Termination. If the Officer obtains subsequent employment or earns other compensation for services rendered within the first year following the Date of Termination, then the Officer agrees to provide written notice to the Employer or any successor within ten (10) business days of the date the Officer obtains such employment or earns such compensation, including the amount of compensation earned.
6. Competitive Activities
(a) The Officer agrees and acknowledges that by virtue of his employment hereunder, he will maintain an intimate knowledge of the activities and affairs of the Employer, including trade secrets, plans, business plans, strategies, projections, market studies, customer information, employee records and other internal proprietary and confidential information and matters (collectively “Confidential Information”). As a result, and also because of the special, unique and extraordinary services that the Officer is capable of performing for the Employer or one of its competitors, the Officer recognizes that the services to be rendered by him hereunder are of a character giving them a peculiar value, the loss of which cannot be adequately or reasonably compensated for by damages.
(b) Except for the purpose of carrying out his duties hereunder, the Officer will not remove or retain, or make copies or reproductions of, any figures, documents, records, discs, computer records, calculations, letters, papers, or recorded or documented information of any type or description relating to the business of the Employer. The Officer agrees that he will not divulge to others any information (whether or not documented or recorded) or data acquired by him while in the Employer’s employ relating to methods, processes or other trade secrets or other Confidential Information.
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(c) The Officer agrees that the Employer is, and shall be, the sole and exclusive owner of all improvements, ideas and suggestions, whether or not subject to patent or trademark protection, and all copyrightable materials which are conceived by the Officer during his employment, which relate to the business of the Employer, which are confidential, or which are not readily ascertainable from persons or other sources outside the Employer.
(d) Unless the Officer’s employment is terminated in connection with or following a Change in Control, then for a period of one year after the termination of employment, the Officer shall not, directly or indirectly, solicit, induce, encourage or attempt to influence any client, customer or employee of the Employer to cease to do business with, or to terminate any employee’s employment with, the Employer.
(e) The Employer shall be entitled to immediate injunctive or other equitable relief to restrain the Officer from failing to comply with any obligation under this Section 6, in addition to any other remedies to which the Employer may be entitled under law. The right to such injunctive or other equitable relief shall survive the termination by the Employer of the Officer’s employment.
8. 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 first-class certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:
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Secretary |
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Willow Financial Bank |
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000 Xxxxx Xxxxxx Xxxx |
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Xxxxx, Xxxxxxxxxxxx 00000 |
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To the Officer: |
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Xxxxxxx Xxxxxx |
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9. 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 Officer 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 Employer may amend in good faith any terms of this Agreement, including retroactively, in order to comply with Section 409A of the Code.
10. 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.
11. Nature of Employment and Obligations.
(a) Nothing contained herein shall be deemed to create other than a terminable at will employment relationship between the Employer and the Officer, and the Employer may terminate the Officer’s employment at any time, subject to providing any payments specified herein in accordance with the terms hereof.
(b) 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 Officer 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.
17. Regulatory Actions. The following provisions shall be applicable to the parties to the extent that they are required to be included in agreements between a savings association and its employees pursuant to Section 563.39(b) of the Regulations Applicable to All Savings Associations, 12 C.F.R. §563.39(b), or any successor thereto, and shall be controlling in the event of a conflict with any other provision of this Agreement, including without limitation Section 2 hereof.
(a) The Bank’s Board of Directors may terminate the Officer’s employment at any time, but any termination by the Bank’s Board of Directors, other than termination for Cause, shall not prejudice the Officer’s right to compensation or other benefits under this Agreement.
(b) If the Officer is suspended from office and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. §1818(e)(3) and 1818(g)(1)), the Employer’s obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Employer may, in its discretion: (i) pay the Officer all or part of the compensation withheld while its obligations under this Agreement were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.
(c) If the Officer is removed from office and/or permanently prohibited from participating in the conduct of the Employer’s affairs by an order issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §1818(e)(4) and (g)(1)), all obligations of the Employer under this Agreement shall terminate as of the effective date of the order, but vested rights of the Officer and the Employer as of the date of termination shall not be affected.
(d) If the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C. §1813(x)(1)), all obligations under this Agreement shall terminate as of the date of default, but vested rights of the Officer and the Employer as of the date of termination shall not be affected.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first written above.
Attest: |
WILLOW FINANCIAL BANK |
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/s/ Xxxxxx X. Xxxxxxx |
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By: |
/s/ Xxxxx X. Xxxxxxx |
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Xxxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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Senior Vice President, |
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Corporate Secretary |
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OFFICER |
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By: |
/s/ Xxxxxxx Xxxxxx |
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Xxxxxxx Xxxxxx |
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