Exhibit 10.3
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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of December 23, 1997 by and between WARWICK COMMUNITY BANCORP, INC., a
business corporation organized and existing under the laws of the State of
Delaware and having an office at 00 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000-0000
("Company") and XXXXXX X. XXXXXX, an individual residing at 00 Xxxx Xxxx,
Xxxxxx, Xxx Xxxx 00000 ("Executive").
W I T N E S S E T H :
WHEREAS, the Executive currently serves as the Senior Vice
President, Treasurer and Chief Financial Officer of the Company and as the
Senior Vice President, Treasurer and Chief Financial Officer of The Warwick
Savings Bank ("Bank") and effective as of the date of this Agreement, the Bank
has converted from a mutual savings bank to a stock savings bank and has become
the wholly owned subsidiary of the Company; and
WHEREAS, the Company desires to assure for itself, the Bank
and their respective subsidiaries and affiliates the continued availability of
the Executive's services as provided in this Agreement and the ability of the
Executive to perform such services with a minimum of personal distraction in the
event of a pending or threatened Change of Control (as hereinafter defined); and
WHEREAS, the Executive is willing to continue to serve the
Company, the Bank and their respective subsidiaries and affiliates on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions hereinafter set forth, the Company, the Bank and
the Executive hereby agree as follows:
SECTION 1. EMPLOYMENT.
The Company and the Bank agree to continue to employ the
Executive, and the Executive hereby agrees to such continued employment, during
the period and upon the terms and conditions set forth in this Agreement.
SECTION 2. EMPLOYMENT PERIOD; REMAINING UNEXPIRED
EMPLOYMENT PERIOD.
(a) The terms and conditions of this Agreement shall be and
remain in effect during the period of employment established under this section
2 ("Employment Period"). The Employment Period shall be for an initial term of
three years beginning on the date of this Agreement and ending on the third
anniversary date of this Agreement (each, an "Anniversary Date"), plus such
extensions, if any, as are provided pursuant to section 2(b).
(b) Except as provided in section 2(c) and subject to section
11(b), beginning on the date of this Agreement, the Employment Period shall
automatically be extended for one additional day each day, unless either the
Company or the Executive elects not to extend the
Agreement further by giving written notice thereof to the other party, in which
case the Employment Period shall end on the third anniversary of the date on
which such written notice is given; PROVIDED, HOWEVER, that notwithstanding the
foregoing, the Employment Period shall end on the last day of the month in which
the Executive attains the age of 68. For all purposes of this Agreement, the
term "Remaining Unexpired Employment Period" as of any date shall mean the
period beginning on such date and ending on the last day of the Employment
Period taking into account any extensions under this section 2(b). Upon
termination of the Executive's employment with the Company or the Bank for any
reason whatsoever, any daily extensions provided pursuant to this section 2(b),
if not theretofore discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Company or the Bank at any time from terminating the Executive's employment
during the Employment Period with or without notice for any reason; PROVIDED,
HOWEVER, that the relative rights and obligations of the Company and the
Executive in the event of any such termination shall be determined under this
Agreement.
SECTION 3. DUTIES.
The Executive shall serve as Senior Vice President, Treasurer
and Chief Financial Officer of the Company and as Senior Vice President,
Treasurer and Chief Financial Officer of the Bank, having such power, authority
and responsibility and performing such duties as are prescribed by or under the
By-Laws of the Company and as are customarily associated with such position. The
Executive shall devote his full business time and attention (other than during
weekends, holidays, approved vacation periods, and periods of illness or
approved leaves of absence) to the business and affairs of the Company and shall
use his best efforts to advance the interests of the Company.
SECTION 4. CASH COMPENSATION.
In consideration for the services to be rendered by the
Executive hereunder, the Company shall pay to him a salary at an initial annual
rate of eighty-five thousand dollars ($85,000), payable in approximately equal
installments in accordance with the Company's customary payroll practices for
senior officers. The Board shall review the Executive's annual rate of salary at
such times during the Employment Period as it deems appropriate, but not less
frequently than once every twelve months, and may, in its discretion, approve an
increase therein. In addition to salary, the Executive may receive other cash
compensation from the Company or the Bank for services hereunder at such times,
in such amounts and on such terms and conditions as the Board may determine from
time to time.
SECTION 5. EMPLOYEE BENEFIT PLANS AND PROGRAMS.
During the Employment Period, the Executive shall be treated
as an employee of the Company and the Bank and shall be entitled to participate
in and receive benefits under any and all qualified or non-qualified retirement,
pension, savings, profit-sharing or stock bonus plans, any and all group life,
health (including hospitalization, medical and major medical), dental,
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accident and long term disability insurance plans, and any other employee
benefit and compensation plans (including, but not limited to, any incentive
compensation plans or programs, stock option and appreciation rights plans and
restricted stock plans) as may from time to time be maintained by, or cover
employees of, the Company and the Bank, in accordance with the terms and
conditions of such employee benefit plans and programs and compensation plans
and programs and consistent with the Company's and the Bank's customary
practices.
SECTION 6. INDEMNIFICATION AND INSURANCE.
(a) During the Employment Period and for a period of six years
thereafter, the Company or the Bank shall cause the Executive to be covered by
and named as an insured under any policy or contract of insurance obtained by it
to insure its directors and officers against personal liability for acts or
omissions in connection with service as an officer or director of the Company,
the Bank or service in other capacities at the request of the Company. The
coverage provided to the Executive pursuant to this section 6 shall be of the
same scope and on the same terms and conditions as the coverage (if any)
provided to other officers or directors of the Company and the Bank.
(b) To the maximum extent permitted under applicable law,
during the Employment Period and for a period of six years thereafter, the
Company and the Bank shall indemnify the Executive against and hold him harmless
from any costs, liabilities, losses and exposures to the fullest extent and on
the most favorable terms and conditions that similar indemnification is offered
to any director or officer of the Company and the Bank or any subsidiary or
affiliate thereof.
SECTION 7. OUTSIDE ACTIVITIES.
The Executive may serve as a member of the boards of directors
of such business, community and charitable organizations as he may disclose to
and as may be approved by the Board (which approval shall not be unreasonably
withheld); PROVIDED, HOWEVER, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; PROVIDED, HOWEVER, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Company or the Bank and generally
applicable to all similarly situated Executives. The Executive may also serve as
an officer or director of the Bank on such terms and conditions as the Company
and the Bank may mutually agree upon, and such service shall not be deemed to
materially interfere with the Executive's performance of his duties hereunder or
otherwise result in a material breach of this Agreement. If the Executive is
discharged or suspended, or is subject to any regulatory prohibition or
restriction with respect to participation in the affairs of the Bank, he shall
continue to perform services for the Company in accordance with this Agreement
but shall not directly or indirectly provide services to or participate in the
affairs of the Bank in a manner inconsistent with the terms of such discharge or
suspension or any applicable regulatory order.
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SECTION 8. WORKING FACILITIES AND EXPENSES.
The Executive's principal place of employment shall be at the
Company's and the Bank's executive offices at the address first above written,
or at such other location within 50 miles of the address at which the Company
shall maintain its principal executive offices, or at such other location as the
Company and the executive may mutually agree upon. The Company shall provide the
Executive at his principal place of employment with a private office,
secretarial services and other support services and facilities suitable to his
position with the Company and the Bank and necessary or appropriate in
connection with the performance of his assigned duties under this Agreement. The
Company shall reimburse the Executive for his ordinary and necessary business
expenses, including, without limitation, the Executive's travel and
entertainment expenses incurred in connection with the performance of his duties
under this Agreement, in each case upon presentation to the Company of an
itemized account of such expenses in such form as the Company may reasonably
require.
SECTION 9. TERMINATION OF EMPLOYMENT WITH SEVERANCE
BENEFITS.
(a) The Executive's shall be entitled to the severance
benefits described in section 9(b) in the event that:
(i) his employment with the Company or the Bank terminates
during the Employment Period as a result of the Executive's voluntary
resignation within 90 days following:
(A) the failure of the Board or the Board of
Directors of the Bank ("Bank Board") as the case may be, to
appoint or re-appoint or elect or re-elect the Executive to
the position with the Company or the Bank stated in section 3
of this Agreement (or a more senior office);
(B) if the Executive is a member of the Board or the
Bank Board as the case may be, the failure of the shareholders
of the Company or the Bank to elect or re-elect the Executive
to the Board or the Bank Board or the failure of the Board or
the Bank Board (or the nominating committee thereof) to
nominate the Executive for such election or re-election;
(C) the expiration of a 30-day period following the
date on which the Executive gives written notice to the
Company of its or the Bank's material failure, whether by
amendment of the Company's Certificate of Incorporation, the
Bank's Restated Organization Certificate, the Company's
By-Laws or the Bank's By-Laws, action of the Board or the Bank
Board or the Company's shareholders or the Bank's shareholders
or otherwise, to vest in the Executive the functions, duties,
or responsibilities prescribed in section 3 of this Agreement,
unless, during such 30-day period, the Company or the Bank
cures such failure; or
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(D) the expiration of a 30-day period following the
date on which the Executive gives written notice to the
Company of its or the Bank's material breach of any term,
condition or covenant contained in this Agreement (including,
without limitation any reduction of the Executive's rate of
base salary in effect from time to time and any change in the
terms and conditions of any compensation or benefit program in
which the Executive participates which, either individually or
together with other changes, has a material adverse effect on
the aggregate value of his total compensation package),
unless, during such 30-day period, the Company or the Bank
cures such failure;
(F) a change in the Executive's principal place of
employment for a distance in excess of 50 miles from the
Bank's principal office in Warwick, New York; or
(ii) the Executive's employment with the Company or the Bank
is terminated by the Company or the Bank for any reason other than for
"cause" as provided in section 10(a); or
(iii) a Change of Control as defined in section 11 has
occurred.
(b) Upon the occurrence of any of the events described in
section 9(a) of this Agreement, the Company shall pay and provide to the
Executive (or, in the event of his death, to his estate):
(i) his earned but unpaid salary (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for in this section
9(b)) as of the date of the termination of his employment with the
Company and the Bank, such payment to be made at the time and in the
manner prescribed by law applicable to the payment of wages but in no
event later than 30 days after termination of employment;
(ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation
plans and pro grams maintained for the benefit of the Company's and the
Bank's officers and employees;
(iii) continued group life, health (including hospitalization,
medical and major medical), dental, accident and long term disability
insurance benefits, in addition to that provided pursuant to section
9(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for the
Executive, for the Remaining Unexpired Employment Period, coverage
equivalent to the coverage to which he would have been entitled under
such plans (as in effect on the date of his termination of employment,
or, if his termination of employment occurs after a Change of Control,
on the date of such
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Change of Control, whichever benefits are greater), if he had continued
working for the Company and the Bank during the Remaining Unexpired
Employment Period at the highest annual rate of salary achieved during
the Employment Period;
(iv) within 30 days following the Executive's termination of
employment with the Company or the Bank, a lump sum payment, in an
amount equal to the present value of the salary (excluding any
additional payments made to the Executive in lieu of the use of an
automobile) that the Executive would have earned if he had continued
working for the Company and the Bank during the Remaining Unexpired
Employment Period at the highest annual rate of salary achieved during
the Employment Period, where such present value is to be determined
using a dis count rate equal to the applicable short-term federal rate
prescribed under section 1274(d) of the Internal Revenue Code of 1986,
as amended ("Code"), compounded using the compounding periods
corresponding to the Company's regular payroll periods for its
officers, such lump sum to be paid in lieu of all other payments of
salary provided for under this Agreement in respect of the period
following any such termination;
(v) within 30 days following the Executive's termination of
employment with the Company or the Bank, a lump sum payment in an
amount equal to the excess, if any, of:
(A) the present value of the aggregate benefits to
which he would be entitled under The Warwick Savings Bank
Defined Benefit Pension Plan (together with the defined
benefit portion of the Benefit Restoration Plan of The Warwick
Savings Bank and any other supplemental defined benefit plan)
and any and all other qualified and non-qualified defined
benefit pension plans maintained by, or covering employees of,
the Company or the Bank, if he were 100% vested thereunder and
had continued working for the Company and the Bank during the
Remaining Unexpired Employment Period at the highest annual
rate of salary achieved during the Employment Period; over
(B) the present value of the benefits to which he is
actually entitled under such defined benefit pension plans as
of the date of his termination;
where such present values are to be determined using the mortality
tables prescr ibed under section 415(b)(2)(E)(v) of the Code and a
discount rate, compounded monthly equal to the annualized rate of
interest prescribed by the Pension Benefit Guaranty Corporation for the
valuation of immediate annuities payable under terminating
single-employer defined benefit plans for the month in which the
Executive's termination of employment occurs ("Applicable PBGC Rate");
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(vi) within 30 days following the Executive's termination of
employment with the Company or the Bank, a lump sum payment in an
amount equal to the present value of the additional employer
contributions to which he would have been entitled under The Warwick
Savings Bank 401(k) Savings Plan, the Employee Stock Ownership Plan of
Warwick Community Bancorp, Inc. (together with the defined contribution
portion of the Benefit Restoration Plan of The Warwick Savings Bank or
any other supplemental defined contribution plan) and any and all other
qualified and non-qualified defined contribution plans maintained by,
or covering employees of, the Company or the Bank, as if he were 100%
vested thereunder and had continued working for the Company and the
Bank during the Remaining Unexpired Employment Period at the highest
annual rate of salary achieved during the Employment Period and making
the maximum amount of em ployee contributions, if any, required under
such plan or plans, such present value to be determined on the basis of
a discount rate, compounded using the compounding period that
corresponds to the frequency with which employer contributions are made
to the relevant plan, equal to the Applicable PBGC Rate;
(vii) the payments that would have been made to the Executive
under any cash or stock bonus or long-term or short-term cash incentive
compensation plan maintained by, or covering employees of, the Company
or the Bank if he had continued working for the Company and the Bank
during the Remaining Unexpired Employment Period and had earned the
maximum bonus or incentive award in each calendar year that ends during
the Remaining Unexpired Employment Period, such payments to be equal to
the product of:
(A) the maximum percentage rate at which an award was
ever available to the Executive under such incentive
compensation plan; multiplied by
(B) the salary that would have been paid to the
Executive during each such calendar year at the highest annual
rate of salary achieved during the Employment Period;
such payments to be made (without discounting for early payment) within
30 days following the Executive's termination of employment;
(viii) at the election of the Company made within 30 days
following the occurrence of the event described in section 9(a), upon
the surrender of options or appreciation rights issued to the Executive
under any stock option and appreciation rights plan or program
maintained by, or covering employees of, the Company or the Bank, a
lump sum payment in an amount equal to the product of:
(A) the excess of (I) the fair market value of a
share of stock of the same class as the stock subject to the
option or appreciation right, determined as of the date of
termination of employment, over (II) the
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exercise price per share for such option or appreciation
right, as specified in or under the relevant plan or
program; multiplied by
(B) the number of shares with respect to which
options or appreciation rights are being surrendered.
For purposes of this section 9(b)(viii), the Executive shall be deemed
fully vested in all options and appreciation rights under any stock
option or appreciation rights plan or program maintained by, or
covering employees of, the Company or the Bank, even if he is not
vested under such plan or program; and
(ix) at the election of the Company made within 30 days
following the occurrence of the event described in section 9(a), upon
the surrender of any shares awarded to the Executive under any
restricted stock plan maintained by, or covering employees of, the
Company or the Bank, a lump sum payment in an amount equal to the
product of:
(A) the fair market value of a share of stock of the
same class of stock granted under such plan, determined as of
the date of the Executive's termination of employment;
multiplied by
(B) the number of shares which are being surrendered.
For purposes of this section 9(b)(ix), the Executive shall be deemed
fully vested in all shares awarded under any restricted stock plan
maintained by, or covering employees of, the Company or the Bank, even
if he is not vested under such plan.
The Company and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Executive's efforts, if any, to
mitigate damages. The Company and the Executive further agree that the Company
may condition the payments and benefits (if any) due under sections 9(b)(iii),
(iv), (v), (vi) and (vi) on the receipt of the Executive's resignation from any
and all positions which he holds as an officer, director or committee member
with respect to the Company, the Bank or any subsidiary or affiliate of either
of them.
SECTION 10. TERMINATION WITHOUT ADDITIONAL COMPANY
LIABILITY. In the event that the Executive's employment with the Company shall
terminate during the Employment Period on account of:
(a) the discharge of the Executive for "cause," which, for
purposes of this Agreement, shall mean a discharge because the Board
and the Bank Board determine that the Executive: (i) has willfully and
intentionally failed to perform his assigned duties under
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this Agreement (including for these purposes, the Executive's inability
to perform such duties as a result of drug or alcohol dependency); (ii)
has willfully and intentionally engaged in dishonest or illegal conduct
in connection with his performance of services for the Company or the
Bank or has been convicted of a felony; (iii) has willfully violated,
in any material respect, any law, rule, regulation, written agreement
or final cease-and-desist order with respect to his performance of
services for the Company or the Bank, as determined by the Board and
the Bank Board; or (iv) has willfully and intentionally breached the
material terms of this Agreement; PROVIDED, HOWEVER, that, if the
Executive engages in any of the acts described in section 10(a)(i) or
(a)(iv) above, the Company shall provide the Executive with written
notice of its intent to discharge the Executive for cause, and the
Executive shall have 30 days from the date on which the Executive
receives such notice to cure any such acts; AND PROVIDED, FURTHER, that
on and after the date that a Change of Control occurs, a determination
under this section 10 shall require the affirmative vote of at least
three-fourths of the members of the Board and the Bank Board acting in
good faith and such vote shall not be made prior to the expiration of a
60-day period following the date on which the Board and the Bank Board
shall, by written notice to the Executive, furnish to him a statement
of its grounds for proposing to make such determination, during which
period the Executive shall be afforded a reasonable opportunity to make
oral and written presentations to the members of the Board and the Bank
Board, and to be represented by his legal counsel at such
presentations, to refute the grounds for the pro posed determination;
(b) the Executive's voluntary resignation from employment with
the Company and the Bank for reasons other than those specified in
section 9(a)(i); or
(c) the death of the Executive while employed by the Company
or the termination of the Executive's employment because of "total and
permanent disability" within the meaning of the Company's long-term
disability plan for employees;
then the Company shall have no further obligations under this Agreement, other
than the payment to the Executive of his earned but unpaid salary as of the date
of the termination of his employment and the provision of such other benefits,
if any, to which he is entitled as a former employee under the Company's and the
Bank's employee benefit plans and programs and compensation plans and programs.
For purposes of this section 10, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company and the
Bank. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board and the Bank Board or based upon the
written advice of counsel for the Company or the Bank shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company and the Bank. The cessation of employment
of the Executive shall not be deemed to be for "cause" within the meaning of
section 10(a) unless and until there shall have been delivered to the Executive
a copy of a resolution duly adopted by the affirmative vote of three-fourths of
the members of the Board and the Bank Board at a meeting of the Board and the
Bank Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive
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is given an opportunity, together with counsel, to be heard before the Board and
the Bank Board), finding that, in the good faith opinion of the Board and the
Bank Board, the Executive is guilty of the conduct described in section 10(a)
above, and specifying the particulars thereof in detail.
SECTION 11. TERMINATION UPON OR FOLLOWING A CHANGE OF
CONTROL.
(a) A Change of Control of the Company ("Change of Control")
shall be deemed to have occurred upon the happening of any of the following
events:
(i) the reorganization, merger or consolidation of the Company
with one or more other persons, other than a transaction following
which:
(A) at least 51% of the equity ownership interests of
the entity resulting from such transaction are beneficially
owned (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act"))
in substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the outstanding equity ownership
interests in the Company; and
(B) at least 51% of the securities entitled to vote
generally in the election of directors of the entity resulting
from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in
substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the securities entitled to vote
generally in the election of directors of the Company;
(ii) the acquisition of all or substantially all of the assets
of the Company or beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 25% or more of the
outstanding securities of the Company entitled to vote generally in the
election of directors by any person or by any persons acting in
concert;
(iii) a complete liquidation or dissolution of the Company;
(iv) the occurrence of any event if, immediately following
such event, at least 50% of the members of the Board do not belong to
any of the following groups:
(A) individuals who were members of the Board on
the date of this Agreement; or
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(B) individuals who first became members of the Board
after the date of this Agreement either:
(1) upon election to serve as a member of
the Board by affirmative vote of three-quarters of
the members of such board, or of a nominating
committee thereof, in office at the time of such
first election; or
(2) upon election by the shareholders of the
Board to serve as a member of the Board, but only if
nominated for election by affirmative vote of
three-quarters of the members of the board of
directors of the Board, or of a nominating committee
thereof, in office at the time of such first
nomination;
PROVIDED, HOWEVER, that such individual's election or
nomination did not result from an actual or threatened
election contest (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents
(within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf
of the Board of the Company; or
(v) any event which would be described in section 11(a)(i),
(ii), (iii) or (iv) if the term "Bank" were substituted for the term
"Company" therein and the term "Bank Board" were substituted for the
term "Board" therein.
In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this section 11(a), the term "person" shall have the meaning
assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
(b) In the event of a Change of Control, the Executive shall
be entitled to the payments and benefits described in section 9(b), regardless
of whether his employment terminates; PROVIDED, HOWEVER, that the term
"Remaining Unexpired Employment Period" shall mean three years beginning on the
effective date of the Change of Control, even if such three-year period extends
beyond the date the Executive attains age 68.
SECTION 12. TAX INDEMNIFICATION.
(a) This section 12 shall apply if the Executive's employment
is terminated upon or following (i) a Change of Control (as defined in section
11 of this Agreement); or (ii) a change "in the ownership or effective control"
of the Company or the Bank or "in the ownership of a substantial portion of the
assets" of the Company or the Bank within the meaning of section 280G of the
Code. If this section 12 applies, then, if for any taxable year, the Executive
shall be liable for the payment of an excise tax under section 4999 of the Code
with respect to any payment in
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the nature of compensation made by the Company, the Bank or any direct or
indirect subsidiary or affiliate of the Company or the Bank to (or for the
benefit of) the Executive, the Company shall pay to the Executive an amount
equal to X determined under the following formula:
X = E x P
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1 - [(FI x (1 - SLI)) + SLI + E + M]
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
12;
FI = the highest marginal rate of income tax applicable to
the Executive under the Code for the taxable year in
question;
SLI = the sum of the highest marginal rates of income tax
applicable to the Executive under all applicable
state and local laws for the taxable year in
question; and
M = the highest marginal rate of Medicare tax
applicable to the Executive 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) the Executive 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 12(a) shall be made to the Executive
on the earlier of (i) the date the Company, the Bank or any direct or indirect
subsidiary or affiliate of the Company or the Bank is required to withhold such
tax, or (ii) the date the tax is required to be paid by the Executive.
(b) Notwithstanding anything in this section 12 to the
contrary, in the event that the Executive's 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 12(a), the Executive 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 12(a), when increased by the amount of
the payment made to the Executive under this section 12(b) by the Company, or
when reduced by the amount of the payment made to the Company under this section
12(b) by the Executive, equals the amount that should have properly been paid to
the Executive under section 12(a). The interest paid under this section 12(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 the Executive under
this section 12, the Executive shall furnish to the Company a copy of each tax
return which reflects a liability for an excise tax payment made
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by the Company, at least 20 days before the date on which such return is
required to be filed with the Internal Revenue Service.
SECTION 13. COVENANT NOT TO COMPETE.
The Executive hereby covenants and agrees that, in the event
of his termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one year following the date of his
termination of employment with the Company or the Bank (or, if less, for the
Remaining Unexpired Employment Period), he shall not, without the written con
sent of the Company, become an officer, employee, consultant, director or
trustee of any savings bank, savings and loan association, savings and loan
holding company, bank or bank holding com pany, or any direct or indirect
subsidiary or affiliate of any such entity, that entails working within Orange,
Dutchess, Rockland or Xxxxxx counties or any other county in which the Company
or the Bank maintains an office; PROVIDED, HOWEVER, that this section 13 shall
not apply if the Executive's employment is terminated for the reasons set forth
in section 9(a).
SECTION 14. CONFIDENTIALITY.
Unless he obtains the prior written consent of the Company,
the Executive shall keep confidential and shall refrain from using for the
benefit of himself, or any person or entity other than the Company or any entity
which is a subsidiary of the Company or of which the Company is a subsidiary,
any material document or information obtained from the Company, or from its
parent or subsidiaries, in the course of his employment with any of them
concerning their properties, operations or business (unless such document or
information is readily ascertainable from public or published information or
trade sources or has otherwise been made available to the public through no
fault of his own) until the same ceases to be material (or becomes so
ascertainable or available); PROVIDED, HOWEVER, that nothing in this section 14
shall prevent the Executive, with or without the Company's consent, from
participating in or disclosing documents or information in connection with any
judicial or administrative investigation, inquiry or proceed ing to the extent
that such participation or disclosure is required under applicable law.
SECTION 15. SOLICITATION.
The Executive hereby covenants and agrees that, for a period
of one year following his termination of employment with the Company or the
Bank, he shall not, without the written consent of the Company and the Bank,
either directly or indirectly:
(a) solicit, offer employment to, or take any other action
intended, or that a reasonable person acting in like circumstances
would expect, to have the effect of causing any officer or employee of
the Company, the Bank or any of their respective subsidiaries or
affiliates to terminate his or her employment and accept employment or
become affiliated with, or provide services for compensation in any
capacity whatsoever to, any savings bank, savings and loan Bank, bank,
bank holding company, savings and loan holding company, or other
institution engaged
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in the business of accepting deposits, making loans or doing
business within the counties specified in section 13;
(b) provide any information, advice or recommendation with
respect to any such officer or employee of any savings bank, savings
and loan Bank, bank, bank holding company, savings and loan holding
company, or other institution engaged in the business of accepting
deposits, making loans or doing business within the counties specified
in section 13; that is intended, or that a reasonable person acting in
like circumstances would expect, to have the effect of causing any
officer or employee of the Company, the Bank, or any of their
respective subsidiaries or affiliates to terminate his employment and
accept employment or become affiliated with, or provide services for
compensation in any capacity what soever to, any savings bank, savings
and loan association, bank, bank holding company, savings and loan
holding company, or other institution engaged in the business of
accepting deposits, making loans or doing business within the counties
specified in section 13;
(c) solicit, provide any information, advice or recommendation
or take any other action intended, or that a reasonable person acting
in like circumstances would expect, to have the effect of causing any
customer of the Company to terminate an existing business or commercial
relationship with the Company.
SECTION 16. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR
PROGRAMS.
The termination of the Executive's employment during the term
of this Agreement or thereafter, whether by the Company, by the Bank or by the
Executive, shall have no effect on the rights and obligations of the parties
hereto under the Company's or the Bank's qualified or non-qualified retirement,
pension, savings, thrift, profit-sharing or stock bonus plans, group life,
health (including hospitalization, medical and major medical), dental, accident
and long term dis ability insurance plans or such other employee benefit plans
or programs, or compensation plans or programs, as may be maintained by, or
cover employees of, the Company or the Bank from time to time; PROVIDED,
HOWEVER, that nothing in this Agreement shall be deemed to duplicate any
compensation or benefits provided under any agreement, plan or program covering
the Executive to which the Company is a party and any duplicative amount payable
under any such agreement, plan or program shall be applied as an offset to
reduce the amounts otherwise payable hereunder.
SECTION 17. SUCCESSORS AND ASSIGNS.
This Agreement will inure to the benefit of and be binding
upon the Executive, his legal representatives and testate or intestate
distributees, and the Company and the Bank and their respective successors and
assigns, including any successor by merger or consolidation or a statu tory
receiver or any other person or firm or corporation to which all or
substantially all of the assets and business of the Company may be sold or
otherwise transferred. Failure of the Company to obtain from any successor its
express written assumption of the Company's obligations
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hereunder at least 60 days in advance of the scheduled effective date of any
such succession shall be deemed a material breach of this Agreement.
SECTION 18. NOTICES.
Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
If to the Executive:
Xxxxxx X. Xxxxxx
00 Xxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
If to the Company or the Bank:
Warwick Community Bancorp, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attention: PRESIDENT
WITH A COPY TO:
Xxxxxxx Xxxxxxxx & Xxxx
Two World Trade Center
New York, New York 10048
Attention: XXXXXXX X. XXXXXXXXXX, ESQ.
SECTION 19. INDEMNIFICATION FOR ATTORNEYS' FEES.
(a) The Company shall indemnify, hold harmless and defend the
Executive against reasonable costs, including legal fees and expenses, incurred
by him in connection with or arising out of any action, suit or proceeding in
which he may be involved, as a result of his efforts, in good faith, to defend
or enforce the terms of this Agreement. For purposes of this Agreement, any
settlement agreement which provides for payment of any amounts in settlement of
the Company's or the Bank's obligations hereunder shall be conclusive evidence
of the Executive's entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
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(b) The Company's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment. Unless it is determined
that a claim made by the Executive was either frivolous or made in bad faith,
the Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
or in connection with his consultation with legal counsel or arising out of any
action, suit, proceeding or contest (regardless of the outcome thereof) by the
Company, the Executive or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in section
7872(f)(2)(A) of the Code. This section 19(b) shall apply whether such
consultation, action, suit, proceeding or contest arises before, on, after or as
a result of a Change of Control.
SECTION 20. SEVERABILITY.
A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof.
SECTION 21. WAIVER.
Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same Agreement.
SECTION 23. GOVERNING LAW.
Except to the extent preempted by federal law, this Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of New York applicable to contracts entered into and to be performed
entirely within the State of New York.
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SECTION 24. HEADINGS AND CONSTRUCTION.
The headings of sections in this Agreement are for convenience
of reference only and are not intended to qualify the meaning of any section.
Any reference to a section number shall refer to a section of this Agreement,
unless otherwise stated.
SECTION 25. ENTIRE AGREEMENT; MODIFICATIONS.
This instrument contains the entire agreement of the parties
relating to the subject matter hereof, and supersedes in its entirety any and
all prior agreements, understandings or rep resentations relating to the subject
matter hereof. No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
SECTION 26. NON-DUPLICATION.
In the event that the Executive shall perform services for the
Bank or any other direct or indirect subsidiary or affiliate of the Company or
the Bank, any compensation or benefits provided to the Executive by such other
employer shall be applied to offset the obligations of the Company hereunder, it
being intended that this Agreement set forth the aggregate compensation and
benefits payable to the Executive for all services to the Company, the Bank and
all of their respective direct or indirect subsidiaries and affiliates.
SECTION 27. REQUIRED REGULATORY PROVISIONS.
Notwithstanding anything herein contained to the contrary, any
payments to the Executive by the Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. ss.1828(k), and any
regulations promulgated thereunder.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed and the Executive has hereunto set his hand, all as of the day and
year first above written.
/s/Xxxxxx X. Xxxxxx
----------------------------------------
XXXXXX X. XXXXXX
WARWICK COMMUNITY BANCORP, INC.
Attest:
By/s/Xxxxx X. Xxxxxxx-xxxxxxx By/s/Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------- ----------------------------------------
Xxxxx X. Xxxxxxx-Xxxxxxx Xxxxxx X. Xxxxxxxx, Xx.
Corporate Secretary Director
[Seal]
-00-
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF ORANGE )
On this 22nd day of December, 1997, before me personally came
Xxxxxx X. Xxxxxx, to me known, and known to me to be the individual described in
the foregoing instrument, who, being by me duly sworn, did depose and say that
he resides at the address set forth in said instrument, and that he signed his
name to the foregoing instrument.
/s/Xxxxxxx X. Cuba
----------------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF ORANGE )
On this 22nd day of December, 1997, before me personally came
Xxxxxx X. Xxxxxxxx, Xx., to me known, who, being by me duly sworn, did depose
and say that he resides at 00 Xxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000, that he is
a member of the Board of Directors of WARWICK COMMUNITY BANCORP, INC., the
Delaware corporation described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such seal; that it was so affixed by order of the Board of
Directors of said corporation; and that he signed his name thereto by like
order.
/s/Xxxxxxx X. Cuba
----------------------------------------
Notary Public
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