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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this ___
day of __________, 199_, by and between Atlantic Libertly Savings, F.A.
(hereinafter referred to as the "Bank" whether in mutual or stock form), and
______________ (the "Employee").
WHEREAS, the Employee is currently serving as ___________________ of
the Bank; and
WHEREAS, the Bank has adopted a plan of conversion whereby the Bank
will convert to capital stock form as the subsidiary of Brooklyn Heights
Bancorp (the "Mutual Holding Company") and Brooklyn Heights Bancorp, Inc. (the
"Holding Company"), subject to the approval of the Bank's members and the
Office of Thrift Supervision (the "Conversion"); and
WHEREAS, the board of directors of the Bank ("Board of Directors")
recognizes that, as is the case with publicly held corporations generally, the
possibility of a change in control of the Holding Company and/or the Bank may
exist and that such possibility, and the uncertainty and questions which it may
raise among management, may result in the departure or distraction of key
management personnel to the detriment of the Bank, the Holding Company and
their respective stockholders; and
WHEREAS, the Board of Directors believes it is in the best interests
of the Bank to enter into this Agreement with the Employee in order to assure
continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to the Employee's assigned
duties without distraction in the face of potentially disruptive circumstances
arising from the possibility of a change in control of the Holding Company or
the Bank, although no such change is now contemplated; and
WHEREAS, the Board of Directors has approved and authorized the
execution of this Agreement with the Employee to take effect as stated in
Section 2 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein, it is AGREED as
follows:
1. Definitions.
(a) The term "Change in Control" means (1) an event of a
nature that (i) results in a change in control of the Bank or the Holding
Company within the meaning of the Home Owners' Loan Act of 1933 and 12 C.F.R.
Part 574 as in effect on the date hereof; or (ii) would be required to be
reported in response to Item 1 of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 0000 (xxx "Xxxxxxxx Xxx"); (2) any person (as the term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly
of securities of the Bank or the Holding Company representing 25% or more
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of the Bank's or the Holding Company's outstanding securities; (3) individuals
who are members of the board of directors of the Bank or the Holding Company on
the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by the Holding Company's stockholders was approved by
the nominating committee serving under an Incumbent Board, shall be considered
a member of the Incumbent Board; or (4) a reorganization, merger,
consolidation, sale of all or substantially all of the assets of the Bank or
the Holding Company or a similar transaction in which the Bank or the Holding
Company is not the resulting entity. The term "Change in Control" shall not
include an acquisition of securities by an employee benefit plan of the Bank or
the Holding Company or the acquisition of securities of the Bank by the Holding
Company in connection with the Conversion. In the application of 12 C.F.R.
Part 574 to a determination of a Change in Control, determinations to be made
by the OTS or its Director under such regulations shall be made by the Board of
Directors.
(b) The term "Commencement Date" means the date of completion
of Conversion.
(c) The term "Date of Termination" means the date upon which
the Employee ceases to serve as an employee of the Bank.
(d) The term "Involuntarily Termination" means termination of
the employment of Employee without the Employee's express written consent, and
shall include a material diminution of or interference with the Employee's
duties, responsibilities and benefits as _________ of the Bank, including
(without limitation) any of the following actions unless consented to in
writing by the Employee: (1) a change in the principal workplace of the
Employee to a location outside of a 30 mile radius from the Bank's headquarters
office as of the date hereof; (2) a material demotion of the Employee; (3) a
material reduction in the number or seniority of other Bank personnel reporting
to the Employee or a material reduction in the frequency with which, or in the
nature of the matters with respect to which, such personnel are to report to
the Employee, other than as part of a Bank- or Holding Company-wide reduction
in staff; (4) a material adverse change in the Employee's salary, perquisites,
benefits, contingent benefits or vacation, other than as part of an overall
program applied uniformly and with equitable effect to all members of the
senior management of the Bank or the Holding Company; and (5) a material
permanent increase in the required hours of work or the workload of the
Employee. The term "Involuntary Termination" does not include Termination for
Cause or termination of employment due to retirement, death, disability or
suspension or temporary or permanent prohibition from participation in the
conduct of the Bank's affairs under Section 8 of the Federal Deposit Insurance
Act ("FDIA").
(e) The terms "Termination for Cause" and "Terminated For
Cause" mean termination of the employment of the Employee because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
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 material
breach of any provision of this Agreement. The Employee shall not be deemed to
have been Terminated for Cause unless
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and until there shall have been delivered to the Employee a copy of a
resolution, duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board of Directors of the Bank at a meeting of the
Board called and held for such purpose (after reasonable notice to the Employee
and an opportunity for the Employee, together with the Employee's counsel, to
be heard before the Board), stating that in the good faith opinion of the Board
the Employee has engaged in conduct described in the preceding sentence and
specifying the particulars thereof in detail.
2. Term. The term of this Agreement shall be a period of [UP TO
THREE] years commencing on the Commencement Date, subject to earlier
termination as provided herein. Beginning on the first anniversary of the
Commencement Date, and on each anniversary thereafter, the term of this
Agreement shall be extended for a period of one year in addition to the
then-remaining term, provided that (1) the Bank has not given notice to the
Employee in writing at least 90 days prior to such anniversary that the term of
this Agreement shall not be extended further; and (2) prior to such
anniversary, the Board of Directors of the Bank explicitly reviews and approves
the extension. Reference herein to the term of this Agreement shall refer to
both such initial term and such extended terms.
3. Employment. The Employee is employed as _____________ of the
Bank. As such, the Employee shall render administrative and management
services as are customarily performed by persons situated in similar executive
capacities, and shall have such other powers and duties of an officer of the
Bank as the Board of Directors may prescribe from time to time.
4. Compensation.
(a) Salary. The Bank agrees to pay the Employee during the
term of this Agreement, not less frequently than monthly, the salary
established by the Board of Directors, which shall be at least the Employee's
salary in effect as of the Commencement Date. The amount of the Employee's
salary shall be reviewed by the Board of Directors, beginning not later than
the first anniversary of the Commencement Date. Adjustments in salary or
other compensation shall not limit or reduce any other obligation of the Bank
under this Agreement. The Employee's salary in effect from time to time during
the term of this Agreement shall not thereafter be reduced.
(b) Discretionary Bonuses. The Employee shall be entitled to
participate in an equitable manner with all other executive officers of the
Bank in discretionary bonuses as authorized and declared by the Board of
Directors to its executive employees. No other compensation provided for in
this Agreement shall be deemed a substitute for the Employee's right to
participate in such bonuses when and as declared by the Board of Directors.
(c) Expenses. The Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Employee in
performing services under this Agreement in accordance with the policies and
procedures applicable to the executive officers of the Bank, provided that the
Employee accounts for such expenses as required under such policies and
procedures.
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5. Benefits.
(a) Participation in Retirement and Employee Benefit Plans.
The Employee shall be entitled to participate in all plans relating to pension,
thrift, profit-sharing, group life and disability insurance, medical and dental
coverage, education, cash bonuses, and other retirement or employee benefits or
combinations thereof, in which the Bank's executive officers participate.
(b) Fringe Benefits. The Employee shall be eligible to
participate in, and receive benefits under, any fringe benefit plans which are
or may become applicable to the Bank's executive officers.
6. Vacations; Leave. The Employee shall be entitled to annual paid
vacation in accordance with the policies established by the Bank's Board of
Directors for executive employees and to voluntary leave of absence, with or
without pay, from time to time at such times and upon such conditions as the
Board of Directors of the Bank may determine in its discretion.
7. Termination of Employment.
(a) Involuntary Termination. The Board of Directors may
terminate the Employee's employment at any time, but, except in the case of
Termination for Cause, termination of employment shall not prejudice the
Employee's right to compensation or other benefits under this Agreement. In
the event of Involuntary Termination other than in connection with or within
twelve (12) months after a Change in Control, (1) the Bank shall pay to the
Employee during the remaining term of this Agreement, the Employee's salary at
the rate in effect immediately prior to the Date of Termination, payable in
such manner and at such times as such salary would have been payable to the
Employee under Section 4 if the Employee had continued to be employed by the
Bank, and (2) the Bank shall provide to the Employee during the remaining term
of this Agreement substantially the same health benefits as the Bank maintained
for its executive officers immediately prior to the Date of Termination.
(b) Termination for Cause. In the event of Termination for
Cause, the Bank shall pay the Employee the Employee's salary through the Date
of Termination, and the Bank shall have no further obligation to the Employee
under this Agreement.
(c) Voluntary Termination. The Employee's employment may be
voluntarily terminated by the Employee at any time upon 90 days written notice
to the Bank or upon such shorter period as may be agreed upon between the
Employee and the Board of Directors of the Bank. In the event of such
voluntary termination, the Bank shall be obligated to continue to pay to the
Employee the Employee's salary and benefits only through the Date of
Termination, at the time such payments are due, and the Bank shall have no
further obligation to the Employee under this Agreement.
(d) Change in Control. In the event of Involuntary
Termination in connection with or within 12 months after a Change in Control
which occurs at any time while the Employee is employed under this Agreement,
the Bank shall, subject to Section 8 of this agreement, (1) pay
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to the Employee in a lump sum in cash within 25 business days after the Date of
Termination an amount equal to 299% of the Employee's "base amount" as defined
in Section 280G of the Internal Revenue Code of 1986, as amended (the "Code");
and (2) provide to the Employee during the remaining term of this Agreement
substantially the same health benefits as the Bank maintained for its executive
officers immediately prior to the Change in Control.
(e) Death; Disability. In the event of the death of the
Employee while employed under this Agreement and prior to any termination of
employment, the Employee's estate, or such person as the Employee may have
previously designated in writing, shall be entitled to receive from the Bank
the salary of the Employee through the last day of the calendar month in which
the Employee died. If the Employee becomes disabled as defined in the Bank's
then current disability plan, if any, or if the employee is otherwise unable to
serve as ______________, this Agreement shall continue in full force and
effect, except that the salary paid to the Employee shall be reduced by any
disability insurance payments made to Employee on policies of insurance
maintained by the Bank at its expense.
(f) Temporary Suspension or Prohibition. If the Employee is
suspended and/or temporarily prohibited from participating in the conduct of
the Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the
FDIA, 12 U.S.C. Section 1818(e)(3) and (g)(1), the Bank'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 Bank
may in its discretion (1) pay the Employee 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.
(g) Permanent Suspension or Prohibition. If the Employee is
removed and/or permanently prohibited from participating in the conduct of the
Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA,
12 U.S.C. Section 1818(e)(4) and (g)(1), all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(h) Default of the Bank. If the Bank is in default (as
defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement
shall terminate as of the date of default, but this provision shall not affect
any vested rights of the contracting parties.
(i) Termination by Regulators. All obligations under this
Agreement shall be terminated, except to the extent determined that
continuation of this Agreement is necessary for the continued operation of the
Bank: (1) by the Director of the Office of Thrift Supervision (the "Director")
or his or her designee, at the time the Federal Deposit Insurance Corporation
enters into an agreement to provide assistance to or on behalf of the Bank
under the authority contained in Section 13(c) of the FDIA; or (2) by the
Director or his or her designee, at the time the Director or his or her
designee approves a supervisory merger to resolve problems related to operation
of the Bank or when the Bank is determined by the Director to be in an unsafe
or unsound condition.
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Any rights of the parties that have already vested, however, shall not be
affected by any such action.
8. Certain Reduction of Payments by the Bank.
(a) Notwithstanding any other provision of this Agreement, if
payments under this Agreement, together with any other payments received or to
be received by the Employee in connection with a Change in Control would be
deemed to include an "excess parachute payment" pursuant to Section 280G of the
Code, then benefits under this Agreement shall be reduced (not less than zero)
to the extent necessary to avoid the payment of an excess parachute payment by
the Bank. The Employee shall determine the allocation of such reduction among
payments to the Employee.
(b) Any payments made to the Employee pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.
9. No Mitigation. The Employee shall not be required to mitigate the
amount of any salary or other payment or benefit provided for in this Agreement
by seeking other employment or otherwise, nor shall the amount of any payment
or benefit provided for in this Agreement be reduced by any compensation earned
by the Employee as the result of employment by another employer, by retirement
benefits after the Date of Termination, or otherwise.
10. Attorneys Fees. In the event the Bank exercises its right of
Termination for Cause, but it is determined by a court of competent
jurisdiction or by an arbitrator pursuant to Section 17 that cause did not
exist for such termination, or if in any event it is determined by any such
court or arbitrator that the Bank has failed to make timely payment of any
amounts owed to the Employee under this Agreement, the Employee shall be
entitled to reimbursement for all reasonable costs, including attorneys' fees,
incurred in challenging such termination or collecting such amounts. Such
reimbursement shall be in addition to all rights to which the Employee is
otherwise entitled under this Agreement.
11. No Assignments.
(a) This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank, by an assumption
agreement in form and substance satisfactory to the Employee, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform it if no such succession or
assignment had taken place. Failure of the Bank to obtain such an assumption
agreement prior to the effectiveness of any such succession or assignment shall
be a breach of this Agreement and shall entitle the Employee to compensation
from the Bank in the same amount and on the same terms as the compensation
pursuant to Section 7(d) hereof. For purposes of
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implementing the provisions of this Section 11(a), the date on which any such
succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
12. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid, to the Bank at its
home office, to the attention of the Board of Directors with a copy to the
Secretary of the Bank, or, if to the Employee, to such home or other address as
the Employee has most recently provided in writing to the Bank.
13. Amendments. No amendments or additions to this Agreement shall
be binding unless in writing and signed by both parties, except as herein
otherwise provided.
14. Headings. The headings used in this Agreement are included
solely for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
16. Governing Law. This Agreement shall be governed by the laws of
the United States to the extent applicable and otherwise by the laws of the
State of New York.
17. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
Attest: ATLANTIC LIBERTY SAVINGS, F.A.
By:
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Secretary Xxxxxxx Xxxxxx, President
EMPLOYEE
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