EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of this 17th day of December, 1997 (the "Commencement Date"), by and between SFS
Bancorp, Inc., a Delaware corporation having an office at 000-000 Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxx Xxxx 00000 (which, together with any successor thereto which
executes and delivers the assumption agreement provided for in Section 9(a)
hereof or which otherwise becomes bound by all of the terms and provisions of
this Agreement by operation of law, is hereinafter referred to as the
"Company"), and Xxxxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Executive is currently serving as Chairman, President and
Chief Executive Officer of the Company and Chairman, President and Chief
Executive Officer of the Company's wholly-owned subsidiary, Schenectady Federal
Savings Bank (the "Bank"); and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control of the Company 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 management personnel to the detriment of the Company
and its stockholders; and
WHEREAS, the Board believes it is in the best interests of the Company
to enter into this Agreement with the Executive in order to assure continuity of
management of the Company and the Bank and to reinforce and encourage the
continued attention and dedication of the Executive to the Executive's assigned
duties without distraction in the face of potentially disruptive circumstances
arising from the possibility of a change in control of the Company and/or the
Bank, although no such change is now contemplated; and
WHEREAS, the Board has approved and authorized the execution of this
Agreement with the Executive;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Certain Definitions.
(a) The term "Change in Control" means (i) any "person," as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Company, any Consolidated
Subsidiaries (as hereinafter defined), any person (as hereinabove defined)
acting on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; (ii) individuals who are members of the Board on the
Commencement Date (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the Commencement Date 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 Company's stockholders was approved by the
nominating committee serving under an Incumbent Board, shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person (as hereinabove defined) acquires more than 25% of the combined voting
power of the Company's then outstanding securities; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar effect).
(b) The term "Consolidated Subsidiaries" means any subsidiary
or subsidiaries of the Company that are part of the consolidated group of the
Company for federal income tax reporting.
(c) The term "Date of Termination" means (i) if the
Executive's employment is terminated for Disability (as hereinafter defined), 30
days after Notice of Termination is given (provided that the Executive shall not
have returned to the full-time performance of his duties during such 30-day
period), and (ii) if the Executive's employment is terminated for Cause (as
hereinafter defined) or Good Reason (as hereinafter defined) or for any other
reason (other than death or Disability), the date specified in the Notice of
Termination (which, in the case of a termination for Cause shall not be less
than 30 days from the date such Notice of Termination is given, and in the case
of a termination for Good Reason shall not be less than 15 nor more than 60 days
from the date such Notice of Termination is given); provided, however, that if
within 15 days after any Notice of Termination is given, or, if later, prior to
the Date of Termination (as determined without regard to this proviso), the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, whether by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom has expired
and no appeal has been perfected); and provided, further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay the Executive the Executive's full
Company Salary (as hereinafter defined) in effect when the notice giving rise to
the dispute was given and continue the Executive as a participant in all benefit
and fringe benefit plans (as provided in Section 5 hereof) in which the
Executive was participating when the notice giving rise to the dispute was
given, until the dispute is finally resolved in accordance with this Section
1(c).
(d) The term "Good Reason" means the occurrence, without the
Executive's express written consent, of a material diminution of or interference
with the Executive's duties, responsibilities or benefits, including (without
limitation) any of the following circumstances unless such circumstances are
fully corrected prior to the Date of Termination given in respect thereof:
(i) a requirement that the Executive be based at any location
not within ten miles of Schenectady, New York, or that he substantially increase
his travel on Company or Bank business; (ii) a material demotion of the
Executive; (iii) a material reduction in the number or seniority of personnel
reporting to the Executive 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 Executive, other than as part of a Company-wide or Bank-wide
reduction in staff; (iv) a reduction in the Executive's salary or a material
adverse change in the Executive's 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 Company or the
Bank; (v) a material and extended increase in the required hours of work or the
workload of the Executive; (vi) the failure of the Board to elect him as
Chairman (during any time when he is serving as a director) or President and
Chief Executive Officer of the Company or any action by the Board removing him
from any of such offices, or the failure of the board of directors of the Bank
(or any successor of the Bank) to elect him as Chairman (during any time when he
is serving as a director) or President and Chief Executive Officer of the Bank
or any action by such board (or board of a successor of the Bank) removing him
from such offices; (vii) the failure of the Company to obtain a satisfactory
agreement from any successor to assume the obligations and liabilities under
this Agreement, as contemplated in Section 9(a) hereof; or (viii) any purported
termination of the Executive's employment that is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 8 hereof (and, if
applicable, the requirements of Section 1(e) hereof), which purported
termination shall not be effective for purposes of this Agreement.
The Executive's right to terminate employment pursuant to this Section
1(d) shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder.
(e) The terms "Termination for Cause" and "Terminated For Cause" mean
termination of the employment of the Executive with either the Company or the
Bank, as the case may be, because of the Executive's (i) intentional misconduct
and/or gross negligence that has a material adverse affect on the Company or the
Bank, monetarily or otherwise, or (ii) material breach of any provision of this
Agreement. No act or failure to act by the Executive shall be considered
intentional unless the Executive acted or failed to act with an absence of good
faith and without a reasonable belief that his action or failure to act was in
the best interest of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been Terminated for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution, duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board duly called and held for such purpose
(after reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), stating
that in the good faith opinion of the Board the Executive 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 four 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 the
Company has not given notice to the Executive in writing at least 90 days prior
to such anniversary that the term of this Agreement shall not be extended
further, and provided further that the Executive has not received an
unsatisfactory performance review by either the Board or the Board of Directors
of the Bank.
3. Employment. The Executive is employed as the Chairman, President and
Chief Executive Officer of the Company and the Bank. As such, the Executive
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 as the Board or the Board of Directors of the Bank may
prescribe from time to time. The Executive shall also render services to any
Consolidated Subsidiary as requested by the Company or the Bank from time to
time consistent with his executive position. The Executive shall devote his best
efforts and reasonable time and attention to the business and affairs of the
Company and the Bank to the extent necessary to discharge his responsibilities
hereunder. The Executive may serve on corporate or charitable boards or
committees and manage personal investments, so long as such activities do not
interfere materially with the performance of his responsibilities hereunder.
4. Cash Compensation.
(a) Salary. The Company agrees to pay the Executive during the
term of this Agreement a base salary, the annualized amount of which shall be
not less than the annualized aggregate amount of the Executive's base salary
from the Company and any Consolidated Subsidiaries in effect at the Commencement
Date or as subsequently increased (the "Company Salary"). While employed, any
amounts of salary actually paid to the Executive by any Consolidated
Subsidiaries shall reduce the amount to be paid by the Company to the Executive.
The Company Salary shall be paid no less frequently than monthly and shall be
subject to customary tax withholding. The amount of the Executive's Company
Salary shall be increased (but shall not thereafter be decreased) from time to
time in accordance with the amounts of salary approved by the Board or the board
of directors of any of the Consolidated Subsidiaries after the Commencement
Date.
(b) Bonuses. The Executive shall be entitled to participate in
an equitable manner with all other executive officers of the Company and/or the
Bank in all performance-based and discretionary bonuses authorized by the Board
for executive officers of the Company or by the Board of Directors of the Bank
for executive officers of the Bank. No other compensation provided for in this
Agreement shall be deemed a substitute for the Executive's right to participate
in such bonuses when and as declared by the Board of Directors.
(c) Expenses. During the term of his employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in performing services under this Agreement
in accordance with the policies and procedures applicable to the executive
officers of the Company and the Bank.
5. Benefits.
(a) Participation in Benefit Plans. The Executive shall be
entitled to participate, to the same extent as executive officers of the Company
and/or the Bank generally, in all plans of the Company and/or the Bank relating
to pension, retirement, savings, group or other life insurance, hospitalization,
medical and dental coverage, cash bonuses, and other retirement or employee
benefits or combinations thereof. In addition, the Executive shall be entitled
to be considered for benefits under all of the stock and stock option related
plans in which the Company's or the Bank's executive officers generally are
eligible or become eligible to participate. Nothing herein shall preclude the
Company from providing other benefits to the Executive independent of or
separate from those provided to other executive officers or its executives
generally. Upon any separation of service of the Executive from the Company and
the Bank (other than a "Termination for Cause" as defined in Section 1(e) of
this Agreement), the Company will thereafter provide (through the Consolidated
Subsidiaries or otherwise) the Executive and his spouse for their respective
lifetimes, at the sole cost and expense of the Company, with continued group
life insurance, hospitalization, medical, dental, prescription drug, and other
health benefits coverage, at least equivalent to the coverage being provided by
the Company and/or the Bank to the Executive and his spouse on the Commencement
Date (the "Post-Separation Health Benefits"). The Post-Separation Health
Benefits shall be deemed for all purposes of this Agreement to be vested
contractual rights of the Executive and the obligation of the Company with
respect thereto shall survive any termination of this Agreement. In the event
the Company reasonably determines that the provision of Post-Separation Health
Benefits to the Executive or his surviving spouse as provided in this Agreement
could result in the Company or the Bank violating the Employee Retirement Income
Security Act of 1974, as amended, or any other applicable law or regulation,
then the Company may in lieu thereof make a monthly payment to the Executive or
his surviving spouse in an amount equal to the sum of (i) the actual cost
incurred by the Executive or his surviving spouse for comparable health benefit
coverage plus (ii) a tax gross-up amount to enable the Executive or his
surviving spouse to receive the amount set forth in Section 5(a)(i) on an
after-tax basis.
(b) Fringe Benefits. The Executive shall be eligible to
participate in, and receive benefits under, any other fringe benefit plans or
perquisites which are or may become generally available to the Company's or the
Bank's executive officers, including, but not limited to, supplemental
retirement, incentive compensation, supplemental medical or life insurance
plans, company cars, club dues, physical examinations, financial planning and
tax preparation services.
6. Vacations; Leave. The Executive shall be entitled to annual paid
vacation in accordance with the policies established by the Board and the board
of directors of the Bank for executive officers, in no event less than four
weeks per year, and to voluntary leaves of absence, with or without pay, from
time to time at such times and upon such conditions as the Board may determine
in its discretion. In the event that the Executive is employed hereunder during
a calendar year for less than all of that year, he shall be entitled in that
year to a number of paid vacation days which shall be prorated in accordance
with the number of days on which he is so employed in that year. The Executive
shall be entitled to all paid holidays given by the Company to its executive
officers.
7. Termination of Employment.
(a) Death. In the event of the death of the Executive while
employed under this Agreement and prior to any termination of employment, (i)
the Company shall pay to the Executive's estate, or such person as the Executive
may have previously designated in writing, the Company Salary which was not
previously paid to the Executive plus the Company Salary which he would have
earned if he had continued to be employed under this Agreement through the 180th
day after the date on which the Executive died, at the time such payments would
have been due; and (ii) the Company shall pay to the Executive's estate, or such
person as the Executive may have previously designated in writing, the amounts
of all benefits or awards which, pursuant to the terms of any applicable plan or
plans, were earned with respect to the fiscal year in which the Executive died
and which the Executive would have been entitled to receive if he had continued
to be employed, and the amount of any bonus or incentive compensation for such
fiscal year which the Executive would have been entitled to receive if he had
continued to be employed, pro-rated in accordance with the portion of the fiscal
year served prior to his death; provided that such amounts shall be payable when
and as ordinarily payable under the applicable plans. The death of the Executive
shall not reduce or alter the obligation of the Company to provide
Post-Separation Health Benefits to his surviving spouse.
(b) Disability. If, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall have been absent from the
full-time performance of his duties hereunder for 130 consecutive business days,
and within 30 days after a written Notice of Termination is given, shall not
have returned to the performance of his duties hereunder on a full-time basis,
the Company may terminate the Executive's employment hereunder for "Disability."
In the event the Executive is terminated for Disability, (i) the Company shall
pay to the Executive the Company Salary which was not previously paid to the
Executive plus the Company Salary which he would have earned if he had continued
to be employed under this Agreement through the term of the Agreement remaining
at the time the Notice of Termination for Disability is given, at the time such
payments would have been due, less the amount of disability insurance payments
received during such period by the Executive on account of insurance maintained
by the Company or any of its Consolidated Subsidiaries for the benefit of the
Executive; and (ii) the Company shall pay to the Executive the amounts of all
benefits or awards which, pursuant to the terms of any applicable plan or plans,
were earned with respect to the fiscal year in which the Executive was
terminated due to Disability and which the Executive would have been entitled to
receive if he had continued to be employed, and the amount of any bonus or
incentive compensation for such fiscal year which the Executive would have been
entitled to receive if he had continued to be employed, pro-rated in accordance
with the portion of the fiscal year served prior to his termination due to
Disability; provided, that, such amounts shall be payable when and as ordinarily
payable under the applicable plans. The termination of the Executive for
Disability shall not reduce or alter the obligation of the Company to provide
Post-Separation Health Benefits to the Executive and his spouse.
(c) Cause. In the event of Termination for Cause, the Company
shall pay to the Executive his Company Salary through the Date of Termination at
the rate in effect at the time the Notice of Termination is given and the
Company shall have no further obligation to the Executive under this Agreement.
(d) Involuntary Termination. In the event that (i) the Company
terminates the Executive's employment without the Executive's written consent
other than pursuant to Section 7(a), 7(b) or 7(c) hereof, or the Executive
terminates his employment for Good Reason, and (ii) the Executive offers to
continue to provide services as contemplated by this Agreement and such offer is
declined ("Involuntary Termination"), then, subject to Section 7(e) of this
Agreement, the Company shall, during the lesser period of the Date of
Termination through the remaining term of this Agreement or three years
following the Date of Termination, as liquidated damages pay to the Executive
monthly one-twelfth of the Company Salary at the annual rate in effect at the
time the Notice of Termination is given and one-twelfth of the average annual
amount of cash bonus and cash incentive compensation of the Executive, based on
the average amounts of such compensation earned by the Executive for the two
full fiscal years preceding the Date of Termination. In addition, the Executive
shall be entitled to the Post-Separation Health Benefits.
(e) Reduction of the Company's Obligations Under Section 7(d).
In the event that the Executive becomes entitled to liquidated damages pursuant
to Section 7(d), the Company's obligation thereunder with respect to cash
damages shall be reduced by the amount of the Executive's income, if any, earned
from providing services other than to the Company or the Consolidated
Subsidiaries during the period of the lesser of the Date of Termination through
the remaining term of this Agreement or three years following the Date of
Termination.
(f) Voluntary Termination. The Executive may terminate his
employment voluntarily at any time by a notice pursuant to Section 8 of this
Agreement. In the event that the Executive voluntarily terminates his employment
other than for Good Reason ("Voluntary Termination"), the Company shall pay to
the Executive his Company Salary through the Date of Termination at the rate in
effect at the time the Notice of Termination is given, at the time such payments
are due, and the Company shall have no further obligation to the Executive under
this Agreement other than for Post-Separation Health Benefits.
(g) Change in Control. In the event that the Company shall
terminate the Executive's employment other than pursuant to Section 7(a), 7(b)
or 7(c) hereof, or the Executive shall terminate his employment for Good Reason,
within the 24 months following a Change in Control, in addition to any payments
and benefits to which the Executive is entitled under Section 7(d) hereof, the
Company shall (i) pay the Executive his Company Salary through the Date of
Termination at the rate in effect at the time the Notice of Termination is
given, at the time such payments are due; plus (ii) pay to the Executive in a
lump sum in cash, within 25 days after the later of the date of such Change in
Control or the Date of Termination, an amount equal to 299% of the Executive's
"base amount" as determined under Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), less the aggregate present value of the payments
or benefits, if any, in the nature of compensation for the benefit of the
Executive, arising under any other plans or arrangements (i.e., not this
Agreement) between the Company or any of the Consolidated Subsidiaries and the
Executive, which are contingent upon a Change in Control. The Company's
obligation under this Section 7 shall not be reduced by any amounts paid under
the Restated Executive Supplemental Retirement Plan and Compensation
Continuation Agreement, dated March 23, 1988, by and between the Executive and
the Bank.
While it is not contemplated that the Executive will receive any
amounts or benefits that will constitute "excess parachute payments" under
Section 280G of the Code, in the event that any payments or benefits provided or
to be provided to the Executive pursuant to this Agreement, in combination with
payments or benefits, if any, from other plans or arrangements maintained by the
Company or any of the Consolidated Subsidiaries, constitute "excess parachute
payments" under Section 280G of the Code that are subject to excise tax under
Section 4999 of the Code, the Company shall pay to the Executive in cash an
additional amount equal to the amount of the Gross Up Payment (as hereinafter
defined). The "Gross Up Payment" shall be the amount needed to ensure that the
amount of such payments and the value of such benefits received by the Executive
(net of such excise tax and any federal, state and local tax on the Company's
payment to him attributable to such excise tax) equals the amount of such
payments and value of such benefits as he would receive in the absence of such
excise tax and any federal, state and local tax on the Company's payment to him
attributable to such excise tax. The Company shall pay the Gross Up Payment
within 30 days after the Date of Termination. For purposes of determining the
amount of the Gross Up Payment, the value of any non-cash benefits and deferred
payments or benefits shall be determined by the Company's independent auditors
in accordance with the principles of Section 280G(d)(3) and (4) of the Code. In
the event that, after the Gross Up Payment is made, the amount of the excise tax
is determined to be less than the amount calculated in the determination of the
actual Gross Up Payment made by the Company, the Executive shall repay to the
Company, at the time that such reduction in the amount of excise tax is finally
determined, the portion of the Gross Up Payment attributable to such reduction,
plus interest on the amount of such repayment at the applicable federal rate
under Section 1274 of the Code from the date of the Gross Up Payment to the date
of the repayment. The amount of the reduction of the Gross Up Payment shall
reflect any subsequent reduction in excise taxes resulting from such repayment.
In the event that, after the Gross Up Payment is made, the amount of the excise
tax is determined to exceed the amount anticipated at the time the Gross Up
Payment was made, the Company shall pay to the Executive, in immediately
available funds, at the time that such additional amount of excise tax is
finally determined, an additional payment ("Additional Gross Up Payment") equal
to such additional amount of excise tax and any federal, state and local taxes
thereon, plus all interest and penalties, if any, owed by the Executive with
respect to such additional amount of excise and other tax. The Company shall
have the right to challenge, on the Executive's behalf, any excise tax
assessment against him as to which the Executive is entitled to (or would be
entitled if such assessment is finally determined to be proper) a Gross Up
Payment or Additional Gross Up Payment, provided that all costs and expenses
incurred in such a challenge shall be borne by the Company and the Company shall
indemnify the Executive and hold him harmless, on an after-tax basis, from any
excise or other tax (including interest and penalties with respect thereto)
imposed as a result of such payment of costs and expenses by the Company.
(h) Other Payments. The Company's obligation under this Section 7
shall not be reduced by any amounts paid under the Restated Executive
Supplemental Retirement Plan and Compensation Continuation Agreement, dated
March 23, 1988, by and between the Executive and the Bank.
8. Notice of Termination. In the event that the Company or the Bank, or
both, desire to terminate the employment of the Executive during the term of
this Agreement, the Company and/or the Bank (as the case may be) shall deliver
to the Executive a written notice of termination, stating whether such
termination constitutes Termination for Disability, Termination for Cause or
Involuntary Termination, setting forth in reasonable detail the facts and
circumstances that are the basis for the termination, and specifying the date
upon which employment shall terminate, which date shall be at least 30 days
after the date upon which the notice is delivered, except in the case of
Termination for Cause. In the event that the Executive determines in good faith
that he has experienced an Involuntary Termination of his employment, he shall
send a written notice to the Company stating the circumstances that constitute
such Involuntary Termination and the date upon which his employment shall have
ceased due to such Involuntary Termination. In the event that the Executive
desires to effect a Voluntary Termination, he shall deliver a written notice to
the Company, stating the date upon which employment shall terminate, which date
shall be at least 30 days after the date upon which the notice is delivered,
unless the parties agree to a date sooner.
9. 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 Company shall require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation, operation of
law or otherwise) to all or substantially all of the business and/or assets of
the Company, by an assumption agreement in form and substance satisfactory to
the Executive, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it if no such succession or assignment had taken place. Failure of the Company
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 Executive to compensation and benefits from the Company in the same amount
and on the same terms that he would be entitled to hereunder if he terminated
his employment for Good Reason, in addition to any payments and benefits to
which the Executive is entitled under Section 7(g) hereof. For purposes of
implementing the provisions of this Section 9(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 Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In the event of the death of the Executive,
unless otherwise provided herein, all amounts payable hereunder shall be paid to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
10. Notices. For the purposes of this Agreement, all notices and other
communications to any party hereto shall be in writing and shall be deemed to
have been duly given when delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: Xxxxxx X. Xxxxxxxxx, Chairman of the Board,
President and Chief Executive Officer
SFS Bancorp, Inc.
000-000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
If to the Company: SFS Bancorp, Inc.
000-000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Attention: Corporate Secretary
or to such other address as such party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
11. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
12. 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.
13. 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.
14. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware.
15. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration, conducted before a panel of three arbitrators in a location
selected by the Executive within 100 miles of such Executive's job location with
the Company, in accordance with the rules of the American Arbitration
Association then in effect; provided, however, that the Executive shall be
entitled to seek specific performance of his rights under Section 1(c) during
the pendency of any dispute or controversy arising under or in connection with
this Agreement. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
16. Reimbursement of Expenses. In the event any dispute shall arise
between the Executive and the Company or the Bank as to the terms or
interpretation of this Agreement, including this Section 16, whether instituted
by formal legal proceedings or otherwise, including any action taken by the
Executive to enforce the terms of this Section 16 or in defending against any
action taken by the Company or the Bank, the Company shall reimburse the
Executive for all costs and expenses incurred by the Executive, including
reasonable attorney's fees, arising from such dispute, proceedings or actions,
unless a court of competent jurisdiction renders a final and nonappealable
judgment against the Executive as to the matter in dispute. Reimbursement of the
Executive's expenses shall be paid within ten days of the Executive furnishing
to the Company written evidence, which may be in the form, among other things,
of a canceled check or receipt, of any costs or expenses incurred by the
Executive.
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: SFS BANCORP, INC.
--------------------- ---------------------------
Secretary By:
Its:
EXECUTIVE
----------------------------
Xxxxxx X. Xxxxxxxxx, individually
