AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of the lst day of January 2000, between
Fidelity Bancorp, Inc. (the "Corporation"), a Pennsylvania-chartered bank
holding company, and Fidelity Bank PaSB (the "Savings Bank"), a
Pennsylvania-chartered savings bank and a wholly-owned subsidiary of the
Corporation (collectively, the "Employers"), and Xxxxxxx X. Xxxxxx (the
"Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation
and/or the Savings Bank, and the Employers desire to be ensured of the
Executive's continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances; and
WHEREAS, this Agreement amends and restates the employment agreement
entered into between the Executive and the Employers on January 1, 1994, as
amended.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereby agree as follows:
1. Definitions. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) Base Salary. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(b) Cause. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
For purposes of this paragraph, no act or failure to act on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Employers.
(c) Change in Control of the Corporation. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of
1934, as amended ("Exchange Act") or any successor thereto, whether or not the
Corporation is registered under the Exchange Act; provided that, without
limitation, such a change in control shall be deemed to have occurred if (i) any
"person" (as such 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 Corporation
representing 25% or more of the combined voting power of the Corporation's then
outstanding securities; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period; (iii) the sale of all, or a material portion, of the assets of the
Corporation; or (iv) the merger or recapitalization of the Corporation or
whereby the Corporation is not the surviving entity.
(d) Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(f) Disability. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(g) IRS. IRS shall mean the Internal Revenue Service.
(h) Notice of Termination. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, shall be
communicated by written "Notice of Termination" to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a dated notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated, (iii) specifies a Date of Termination, which shall be not less
than thirty (30) nor more than ninety (90) days after such Notice of Termination
is given, except in the case of the Employers' termination of Executive's
employment for Cause; and (iv) is given in the manner specified in Section 10
hereof.
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(j) Retirement. Termination by the Employers of the Executive's
employment based on "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to their salaried employees.
2. Term of Employment.
(a) The Employers hereby employ the Executive as Vice President-
Lending, and the Executive hereby accepts said employment and agrees to render
such services to the Employers on the terms and conditions set forth in this
Agreement. The term of employment under this Agreement shall be for three years,
commencing on the date of this Agreement. The Board of Directors of the
Employers and the Executive may mutually agree to extend the term of this
Agreement for an additional one year as of each or any annual anniversary of the
date of this Agreement by affirmatively approving an addendum to this Agreement
at least forty-five (45) days prior to such anniversary date. At least
forty-five (45) days prior to the first annual anniversary of the date of this
Agreement and each annual anniversary thereafter, the Board of Directors of the
Employers shall consider and review (with appropriate corporate documentation
thereof, and after taking into account all relevant factors, including the
Executive's performance hereunder) an extension of the term of this Agreement. A
decision to not extend the term of this Agreement on any annual anniversary date
shall not preclude an extension as of any other annual anniversary date.
References herein to the term of this Agreement shall refer both to the initial
term and successive terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as may be consistent with his titles and
from time to time assigned to him by the Employers's Board of Directors.
3. Compensation and Benefits.
(a) The Employers shall compensate and pay Executive for his services
during the term of this Agreement at a minimum base salary of $100,100 per year
("Base Salary"), which may be increased from time to time in such amounts as may
be determined by the Board of Directors of the Employers and may not be
decreased without the Executive's express written consent. In addition to his
Base Salary, the Executive shall be entitled to receive during the term of this
Agreement such bonus payments as may be determined by the Board of Directors of
the Employers.
(b) During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Board of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect Executive's rights or benefits
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thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Employers and does not result in a proportionately
greater adverse change in the rights of or benefits to Executive as compared
with any other executive officer of the Employers. Nothing paid to Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to Executive pursuant
to Section 3(a) hereof.
(c) During the term of this Agreement, Executive shall be entitled to
paid annual vacation in accordance with the policies as established from time to
time by the Board of Directors of the Employers, which shall in no event be less
than four weeks per annum. Executive shall not be entitled to receive any
additional compensation from the Employers for failure to take a vacation, nor
shall Executive be able to accumulate unused vacation time from one year to the
next, except to the extent authorized by the Board of Directors of the
Employers.
4. Expenses. The Employers shall reimburse Executive or otherwise
provide for or pay for all reasonable expenses incurred by Executive in
furtherance or in connection with the business of the Employers, including, but
not by way of limitation, automobile and traveling expenses, and all reasonable
entertainment expenses (whether incurred at the Executive's residence, while
traveling or otherwise), subject to such reasonable documentation and other
limitations as may be established by the Board of Directors of the Employers. If
such expenses are paid in the first instance by the Executive, the Employers
shall reimburse the Executive therefor.
5. Termination.
(a) The Employers shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by
the Employers for Cause, Disability, or Retirement, or (ii) Executive terminates
his employment hereunder, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the applicable
Date of Termination.
(c)(i) In the event that the Executive's employment is terminated by
the Employers for other than Cause, Disability, Retirement or the Executive's
death, or such employment is terminated by the Executive due to a material
breach of this Agreement by the Employers which has not been cured within
fifteen (15) days after a written notice of non-compliance has been given by the
Executive to the Employers, and as of the Executive's Date of Termination no
Change in Control of the Corporation has occurred, no written agreement which
contemplates a Change in Control of the Corporation and which still is in effect
has been entered into by either or both of the Employers and no discussions
and/or negotiations are being conducted which relate to the same, then the
Employers shall, subject to the provisions of Section 6 hereof, if applicable:
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(A) pay to the Executive, in twelve (12) equal monthly installments
beginning with the first business day of the month following the Date of
Termination, an aggregate cash severance amount equal to the Executive's Base
Salary as of his Date of Termination, and
(B) maintain and provide for a period ending at the earlier of (i) the
expiration of twelve (12) months from the Executive's Date of Termination or
(ii) the date of the Executive's full-time employment by another employer
(provided that the Executive is entitled under the terms of such employment to
benefits substantially similar to those described in this subparagraph (B)), at
no cost to the Executive, the Executive's continued participation in all group
insurance, life insurance, health and accident, disability and other employee
benefit plans, programs and arrangements in which the Executive was entitled to
participate immediately prior to the Date of Termination (other than stock
option and restricted stock plans of the Employers), provided that in the event
that the Executive's participation in any plan, program or arrangement as
provided in this subparagraph (B) is barred, or during such period any such
plan, program or arrangement is discontinued or the benefits thereunder are
materially reduced, the Employers shall arrange to provide the Executive with
benefits substantially similar to those which the Executive was entitled to
receive under such plans, programs and arrangements immediately prior to the
Date of Termination.
(C) The severance amount and benefits required to be paid or provided
to the Executive under subparagraphs (A) and (B) above may be paid to the
Executive in a lump sum if the Employers and the Executive agree to such lump
sum payment.
(D) In addition, the Employers shall provide the Executive and his
spouse substantially the same health insurance as the Executive was currently
receiving upon his termination of employment, until both the Executive and his
spouse reach age 65. The Executive or his spouse shall pay 100% of the premium
costs of such insurance coverage.
(ii) Upon a Change in Control of the Corporation, then the Employers
shall, subject to the provisions of Section 6 hereof, if applicable, pay the
Executive on the date of the Change in Control of the Corporation an aggregate
cash severance amount in a lump sum payment equal to:
(A) 2.99 times the Executive's average annual compensation payable by
the Employers and included in the Executive's gross income for the five taxable
years ending before the date on which the Date of Termination occurs (or such
portion of such period during which the Executive was employed by the
Employers), and
(B) and if the Executive elects, maintain and provide for a period
ending at the earlier of (i) the expiration of thirty-six (36) months from the
Executive's Date of Termination or (ii) the date of the Executive's full-time
employment by another employer (provided that the Executive is entitled under
the terms of such employment to benefits substantially similar to those
described in this subparagraph (B)), at no cost to the Executive, the
Executive's continued participation in all group insurance, life insurance,
health and accident, disability and other employee benefit
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plans, programs and arrangements in which the Executive was entitled to
participate immediately prior to the Date of Termination (other than stock
option and restricted stock plans of the Employers), provided that in the event
that the Executive's participation in any plan, program or arrangement as
provided in this subparagraph (B) is barred, or during such period any such
plan, program or arrangement is discontinued or the benefits thereunder are
materially reduced, the Employers shall arrange to provide the Executive with
benefits substantially similar to those which the Executive was entitled to
receive under such plans, programs and arrangements immediately prior to the
Date of Termination.
Any employment of the Executive with the acquiror of the Corporation
after the Change in Control of the Corporation will be at the sole discretion of
the acquiror of the Corporation or as specifically provided in the merger
agreement.
(C) In addition, the Employers shall provide the Executive and his
spouse substantially the same health insurance as the Executive was currently
receiving upon his termination of employment, until both the Executive and his
spouse reach age 65. The Executive or his spouse shall pay 100% of the premium
costs of such insurance coverage.
(D) In the event of the death of the Executive during the term of this
Agreement, the Executive's estate shall be entitled to receive the compensation
due the Executive through the last day of the calendar month in which
Executive's death shall have occurred.
Upon the Executive's death, his surviving spouse and any
dependent children shall receive medical benefits substantially similar to the
coverage provided to the Executive immediately prior to his death, at no cost to
the surviving spouse, for a period of 36 months after the Executive's death.
6. Limitation of Benefits under Certain Circumstances. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 28OG of the
Code, the payments and benefits pursuant to Section 5 hereof shall be reduced,
in the manner determined by the Executive, by the amount, if any, which is the
minimum necessary to result in no portion of the payments and benefits under
Section 5 being non-deductible to either of the Employers pursuant to Section
28OG of the Code and subject to the excise tax imposed under Section 4999 of the
Code. The determination of any reduction in the payments and benefits to be made
pursuant to Section 5 shall be based upon the opinion of independent tax counsel
selected by the Employers and paid by the Employers. Such counsel shall promptly
prepare the foregoing opinion, but in no event later than thirty (30) days from
the Date of Termination, and may use such actuaries as such counsel deems
necessary or advisable for the purpose. Nothing contained herein shall result in
a reduction of any payments or benefits to which the Executive may be entitled
upon termination of employment under any circumstances other than as specified
in this Section 6, or a reduction in the payments and benefits specified in
Section 5 below zero.
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7. Mitigation; Exclusivity of Benefits.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. Withholding. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. Assignability. The Employers may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
their assets, if in any such case said corporation, bank or other entity shall
by operation of law or expressly in writing assume all obligations of the
Employers hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or its rights and obligations
hereunder. The Executive may not assign or transfer this Agreement or any rights
or obligations hereunder.
10. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Xxxxxxx X Xxxxxxxx, President
Fidelity Bancorp, Inc.
0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
To the Executive: Xxxxxxx X. Xxxxxx
00 Xxxxxxxxxxx Xxxx
Xxxxx, XX 00000
11. Amendment; Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Employers to sign on
its behalf. No waiver by any party hereto at any time of any breach
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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.
12. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the Commonwealth of
Pennsylvania.
13. Nature of Obligations. Nothing contained herein shall create or
require the Employers to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
14. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Employers, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extent that the parties may otherwise reach a mutual
settlement of such issue. Further, the settlement of the dispute to be approved
by the Board of Directors of the Employers may include a provision for the
reimbursement by the Employers to the Executive for all reasonable costs and
expenses, including reasonable attorneys' fees, arising from such dispute,
proceedings or actions, or the Board of Directors of the Employers may authorize
such reimbursement of such reasonable costs and expenses by separate action upon
a written action and determination of the Board of Directors following
settlement of the dispute. Such reimbursement shall be paid within ten (10) days
of Executive furnishing to the Employers evidence, which may be in the form,
among other things, of a canceled check or receipt, of any costs or expenses
incurred by Executive.
15. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Regulatory Prohibition. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. ss.Section
1828(k)) and any regulations promulgated thereunder.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
FIDELITY BANCORP, INC.
Attest:
/s/Xxxxx X. Xxxx By /s/Xxxxxxx X. Xxxxxxxx
------------------------------------ ------------------------------
Xxxxxxx X. Xxxxxxxx, President
FIDELITY BANK, PaSB
Attest:
/s/Xxxxx X. Xxxx By /s/Xxxxxxx X. Xxxxxxxx
------------------------------------ ------------------------------
Xxxxxxx X. Xxxxxxxx, President
/s/Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
