Exhibit 10.5
AGREEMENT OF TERMINATION
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This Agreement is made as of the 30th day of June, 1998, between
Ambanc Holding Co., Inc. (the "Corporation"), Amsterdam Savings Bank, FSB (the
"Bank"), and Xxxxxx X. Xxxxxxxx ("Xxxxxxxx").
I. RECITALS
X. Xxxxxxxx is currently employed as the President and Chief
Executive Officer of the Corporation and the Bank pursuant to an Employment
Agreement dated as of January 1, 1996, between the Bank and Xxxxxxxx (the
"Employment Agreement"). The Employment Agreement provides for a term of three
years beginning January 1, 1996, and further provides for a one-year extension
of the term thereof on each anniversary of the Commencement Date (as defined in
the Employment Agreement), provided that (1) the Bank has not notified Xxxxxxxx
at least 90 days prior to an anniversary that the term shall not be extended
further, and (2) the Board of Directors of the Bank explicitly reviews and
approves the extension.
B. The current expiration date of the Employment Agreement is
December 31, 1999, resulting from the one-year extension of its term that took
place effective January 1, 1997. The Board of Directors of the Bank has
determined not to extend the term of the Employment Agreement beyond its current
expiration date.
C. As a result of certain changes in the management structure of the
Corporation and the Bank resulting from the Corporation's potential acquisition
of AFSALA Bancorp, Inc. ("AFSALA"), whereby the President and Chief Executive
Officer of AFSALA will become the President and Chief Executive Officer of the
Corporation and the Bank, Xxxxxxxx has agreed to terminate the Employment
Agreement effective June 30, 1998, in exchange for certain consideration to be
provided under this Agreement and under a consulting agreement between the
Corporation, the Bank and Xxxxxxxx dated of even date herewith (the "Consulting
Agreement").
D. This Agreement is entered into as a result of the Corporation's,
the Bank's and Xxxxxxxx'x mutual decision to terminate Xxxxxxxx'x employment
with the Corporation and the Bank under the Employment Agreement effective
June 30, 1998.
II. AGREEMENTS
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and in the Consulting Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Employment Agreement shall terminate effective June 30, 1998
(the "Termination Date").
2. The termination of the Employment Agreement on the Termination
Date that is effected by this Agreement is a mutual action of the Corporation,
the Bank and Xxxxxxxx, and none of the provisions of Section 7 of the Employment
Agreement shall apply to such termination.
3. In exchange for the annual payment of Forty Thousand Dollars
($40,000.00), payable on a monthly basis for each year that the restriction
contained in this Section 3 is in effect, beginning July 1, 1998, Xxxxxxxx shall
not, until after December 31, 2000, become associated, directly or indirectly,
with any entity, whether as a shareholder (other than as a holder of not more
than one percent (1%) of the outstanding voting shares of any publicly traded
company), principal, partner, employee or consultant, that is actively engaged
in any business which is in competition with the Corporation, the Bank or any of
their subsidiaries or affiliates in any geographic area in which the
Corporation, the Bank or any of their subsidiaries or affiliates does business.
4. Xxxxxxxx acknowledges that it is impossible to measure in money
the damages that will accrue to the Corporation and the Bank by reason of
Xxxxxxxx'x failure to observe any of the obligations imposed on him by
Section 3. Accordingly, if the Corporation or the Bank shall institute an action
to enforce the provisions of Section 3, Xxxxxxxx hereby waives the claim or
defense that an adequate remedy at law is available to the Corporation or the
Bank, and Xxxxxxxx agrees not to urge in any such action the claim or defense
that such adequate remedy at law exists. In addition, Xxxxxxxx agrees to forfeit
and immediately return to the Corporation the $120,000 payment referred to in
Section 3.
5. This Agreement shall be binding on and inure to the benefit of
any successor to the Corporation and the Bank (whether direct or indirect, by
purchase, merger or consolidation, by operation of law, or otherwise) or any
person which acquires all or substantially all of the assets of the Corporation
or the Bank or any assignee of the Corporation or the Bank (collectively
"Successor"), and the Corporation and the Bank will require any Successor to
expressly assume and agree to perform and carry out the obligations of the
Employment Agreement (as modified herein), this Agreement, the Consulting
Agreement and all of the instruments executed by the Corporation and the Bank
hereunder in the same manner and to the same extent as the Corporation and the
Bank, provided that no such assignment or other such action shall relieve the
Corporation or the Bank from any obligation hereunder if the Corporation or the
Bank continues in existence after any such action or event. This Agreement
shall also be binding on and inure to the benefit of Xxxxxxxx and any of his
successors, personal representatives, heirs or assigns.
6. In the event that a dispute arises under this Agreement, the
prevailing party in such dispute shall be entitled to receive from the other
party the amounts expended in pursuing the claim, including costs of litigation,
if any, and reasonable attorneys' fees.
7. This Agreement constitutes all of the understandings and
agreements of whatever kind and nature existing between the parties with respect
to the matters set forth herein and supersedes all prior written or oral
agreements in relation thereto. No amendment, modification, rescission, waiver
or discharge of any provision of this Agreement shall be effective unless
contained in a subsequent written modification signed by both parties.
8. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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9. This Agreement shall be construed and enforced in accordance with
and be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
/s/Xxxxxx X. Xxxxxxxx AMBANC HOLDING COMPANY, INC.
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Xxxxxx X. Xxxxxxxx
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
AMSTERDAM SAVINGS BANK, FSB
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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