ABINGTON BANK AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.3
ABINGTON
BANK
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement”), is made and entered into as of the 28th day of
November
2007, between Abington Savings Bank, a Pennsylvania chartered, stock-form
savings bank doing business as “Abington Bank” (the “Bank” or the “Employer”),
and Xxxx X. Xxxxxxxx (the “Executive”).
WITNESSETH
WHEREAS,
the Executive is currently
employed as Senior Vice President and Chief Financial Officer of the Bank,
and
the Executive and the Bank have previously entered into an employment agreement
dated December 29, 2006 (the “Prior Agreement”); and
WHEREAS,
the Bank desires to amend and
restate the Prior Agreement in order to make changes to comply with Section
409A
of the Code (as defined herein), as well as certain other changes;
NOW
THEREFORE, in consideration of the
premises and mutual agreements herein contained, the Bank and the Executive
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 by the Employer 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,
willful conduct which is materially detrimental (monetarily or otherwise)
to the
Employer or material breach of any provision of this Agreement.
(c) Change
in Control. “Change in Control” shall mean a change in the
ownership of the Corporation or the Bank, a change in the effective control
of
the Corporation or the Bank or a change in the ownership of a substantial
portion of the assets of the Corporation or the Bank, in each case as provided
under Section 409A of the Code and the regulations thereunder.
(d) Code. “Code”
shall mean the Internal Revenue Code of 1986, as amended.
(e) Corporation. “Corporation”
shall mean Abington Bancorp, Inc., a Pennsylvania corporation, or any successor
thereto.
(f) Date
of Termination. “Date of Termination” shall mean (i) if the
Executive’s employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive’s employment is terminated for
any other reason, the date specified in such Notice of Termination.
(g) Disability. “Disability”
shall mean the Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected
to
result in death or can be expected to last for a continuous period of not
less
than 12 months, receiving income replacement benefits for a period of not
less
than three months under an accident and health plan covering employees of
the
Employer.
(h) Good
Reason. Termination by the Executive of the Executive’s
employment for “Good Reason” shall mean termination by the Executive based on
the occurrence of any of the following events:
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(i)
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any
material breach of this Agreement by the Employer, including without
limitation any of the following: (A) a material diminution in the
Executive’s base compensation, (B) a material diminution in the
Executive’s authority, duties or responsibilities, or (C) a material
diminution in the authority, duties or responsibilities of the
officer to
whom the Executive is required to report,
or
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(ii)
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any
material change in the geographic location at which the Executive
must
perform his services under this
Agreement;
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provided,
however, that prior to any termination of employment for Good Reason, the
Executive must first provide written notice to the Employer within ninety
(90)
days of the initial existence of the condition, describing the existence
of such
condition, and the Employer shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Employer received the written
notice from the Executive. If the Employer remedies the condition
within such thirty (30) day cure period, then no Good Reason shall be deemed
to
exist with respect to such condition. If the Employer does not remedy
the condition within such thirty (30) day cure period, then the Executive
may
deliver a Notice of Termination for Good Reason at any time within sixty
(60)
days following the expiration of such cure period.
(i) IRS. “IRS”
shall mean the Internal Revenue Service.
(j) Notice
of Termination. Any purported termination of the Executive’s
employment by the Employer for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by a 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 the Executive’s employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be not less
than
fifteen (15) nor more than ninety (90) days after such Notice of Termination
is
given, except in the case of the Employer’s termination of the Executive’s
employment for Cause, which shall be effective immediately; and (iv) is given
in
the manner specified in Section 10 hereof.
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(k) Retirement. “Retirement”
shall mean voluntary termination by the Executive in accordance with the
Employer’s retirement policies, including early retirement, generally applicable
to the Employer’s salaried employees.
2. Term
of Employment.
(a) The
Employer hereby employs the Executive as Senior Vice President and Chief
Financial Officer, and the Executive hereby accepts said employment and agrees
to render such services to the Employer on the terms and conditions set forth
in
this Agreement. Subject to the terms hereof, this Agreement shall terminate
three (3) years after January 1, 2007 (the “Commencement
Date”). Beginning on the day which is one year subsequent to the
Commencement Date, and on each annual anniversary thereafter, the term of
this
Agreement shall be extended for a period of one additional year provided
that
the Employer has not given notice to the Executive in writing at least 30
days
prior to such day that the term of this Agreement shall not be extended further
and/or the Executive has not given notice to the Employer of his election
not to
extend the term at least thirty (30) days prior to any such anniversary
date. If any party gives timely notice that the term will not be
extended as of any such annual anniversary date, then this Agreement shall
terminate at the conclusion of its remaining term. 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 Employer as is consistent with his title of Senior Vice President
and
from time to time assigned to him by the Employer’s Board of
Directors.
3. Compensation
and Benefits.
(a) The
Employer shall compensate and pay the Executive for his services during the
term
of this Agreement at a minimum base salary of $148,000 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 Employer 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
Employer.
(b) During
the term of this Agreement, the 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 Employer, to the extent
commensurate with his then duties and responsibilities, as fixed by the Board
of
Directors of the Employer. The Employer shall not make any changes in
such plans, benefits or privileges which would adversely affect the Executive’s
rights or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Employer and does not result
in a
proportionately greater adverse change in the rights of or benefits to the
Executive as compared with any other executive officer of the
Employer. Nothing paid to the 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 the Executive pursuant to Section 3(a)
hereof.
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(c) During
the term of this Agreement, the 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 Employer. The Executive shall not be
entitled to receive any additional compensation from the Employer for failure
to
take a vacation, nor shall the 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 Employer.
4. Expenses. The
Employer shall reimburse the Executive or otherwise provide for or pay for
all
reasonable expenses incurred by the Executive in furtherance of, or in
connection with the business of the Employer, including, but not by way of
limitation, automobile and traveling expenses, subject to such reasonable
documentation and other limitations as may be established by the Board of
Directors of the Employer. If such expenses are paid in the first
instance by the Executive, the Employer shall reimburse the Executive therefor.
Such reimbursement shall be paid promptly by the Employer and in any event
no
later than March 15 of the year immediately following the year in which such
expenses were incurred.
5. Termination.
(a) General. The
Employer 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) Termination
for Cause or Voluntary Resignation. In the event that the
(i) the Executive’s employment is terminated by the Employer for Cause, or
(ii) the Executive terminates his employment hereunder other than for Good
Reason, 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) Termination
Due to Disability, Retirement or Death. In the event that
the Executive’s employment is terminated as a result of Disability, Retirement
or the Executive’s death during the term of this Agreement, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits
for
any period after the applicable Date of Termination.
(d) Involuntary
or Good Reason Termination Prior to a Change in Control. In
the event that (i) the Executive’s employment is terminated by the Employer for
other than Cause, Disability, Retirement or the Executive’s death or (ii) such
employment is terminated by the Executive for Good Reason, in each case prior
to
a Change in Control, then the Employer shall:
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(A) pay
to the Executive in a lump sum as of the Date of Termination, a cash severance
amount equal to the product of two (2) times (i) the Executive’s then current
Base Salary, and (ii) the cash bonus paid to the Executive by the Employer
for
the calendar year preceding the Date of Termination; and
(B) maintain
and provide for a period ending at the earlier of (i) twenty-four (24) months
subsequent to the 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)), with the Executive responsible
for
paying the same share of any premiums, co-payments or deductibles as if he
was
still an employee, the Executive’s continued participation in all group
insurance, life insurance, health and accident, and disability insurance
coverage offered by the Employer in which the Executive was participating
immediately prior to the Date of Termination; provided that any insurance
premiums payable by the Employer or any successors pursuant to this Section
5(d)(B) shall be payable at such times and in such amounts as if the Executive
was still an employee of the Employer, subject to any increases in such amounts
imposed by the insurance company or COBRA, and the amount of insurance premiums
required to be paid by the Employer in any taxable year shall not affect
the
amount of insurance premiums required to be paid by the Employer in any other
taxable year; and provided further that if the Executive’s participation in any
group insurance plan is barred, the Employer shall arrange to provide the
Executive with insurance benefits substantially similar to those which the
Executive was entitled to receive under such group insurance plan at no
additional cost to the Executive; and
(C) pay
to the Executive, in a lump sum as of the Date of Termination, a cash amount
equal to the projected cost to the Employer of providing benefits to the
Executive for a period of twenty-four (24) months pursuant to any other employee
benefit plans, programs or arrangements offered by the Employer in which
the
Executive was entitled to participate immediately prior to the Date of
Termination (other than cash bonus plans, retirement plans or stock compensation
plans of the Employer or the Corporation), with the projected cost to the
Employer to be based on the costs incurred for the calendar year immediately
preceding the year in which the Date of Termination occurs and with any
automobile-related costs to exclude any depreciation on Bank-owned
automobiles.
(e) Involuntary
or Good Reason Termination Concurrently with or Subsequent to a Change in
Control. In the event that (i) the Executive’s employment is terminated
by the Employer for other than Cause, Disability, Retirement or the Executive’s
death or (ii) such employment is terminated by the Executive for Good Reason,
in
each case either concurrently with or subsequent to a Change in Control,
then
the Employer shall, subject to the provisions of Section 6 hereof, if
applicable,
(A) pay
to the Executive, in a lump sum as of the Date of Termination, a cash severance
amount equal the product of three (3) times (i) the Executive’s then current
Base Salary, and (ii) the cash bonus paid to the Executive by the Employer
for
the calendar year preceding the Date of Termination; and
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(B) maintain
and provide for a period ending at the earlier of (i) thirty-six (36) months
subsequent to the 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)), with the Executive responsible
for
paying the same share of any premiums, co-payments or deductibles as if he
was
still an employee, the Executive’s continued participation in all group
insurance, life insurance, health and accident, and disability insurance
coverage offered by the Employer in which the Executive was participating
immediately prior to the Date of Termination; provided that any insurance
premiums payable by the Employer or any successors pursuant to this Section
5(e)(B) shall be payable at such times and in such amounts as if the Executive
was still an employee of the Employer, subject to any increases in such amounts
imposed by the insurance company or COBRA, and the amount of insurance premiums
required to be paid by the Employer in any taxable year shall not affect
the
amount of insurance premiums required to be paid by the Employer in any other
taxable year; and provided further that if the Executive’s participation in any
group insurance plan is barred, the Employer shall arrange to provide the
Executive with insurance benefits substantially similar to those which the
Executive was entitled to receive under such group insurance plan at no
additional cost to the Executive; and
(C) pay
to the Executive, in a lump sum as of the Date of Termination, a cash amount
equal to the projected cost to the Employer of providing benefits to the
Executive for a period of thirty-six (36) months pursuant to any other employee
benefit plans, programs or arrangements offered by the Employer in which
the
Executive was entitled to participate immediately prior to the Date of
Termination (other than cash bonus plans, retirement plans or stock compensation
plans of the Employer or the Corporation), with the projected cost to the
Employer to be based on the costs incurred for the calendar year immediately
preceding the year in which the Date of Termination occurs and with any
automobile-related costs to exclude any depreciation on Bank-owned
automobiles.
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
Employer, would constitute a “parachute payment” under Section 280G of the Code,
then the payments and benefits payable by the Employer pursuant to Section
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hereof shall be reduced by the minimum amount necessary to result in no portion
of the payments and benefits under Section 5 being non-deductible to the
Employer pursuant to Section 280G of the Code and subject to the excise tax
imposed under Section 4999 of the Code. If the payments and benefits
under Section 5 are required to be reduced, the cash severance shall be reduced
first, followed by a reduction in the fringe benefits. 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 Employer and paid by the Employer. Such counsel shall promptly
prepare the foregoing opinion, but in no event later than ten (10) 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,
except as set forth in Sections 5(d)(B)(ii) and 5(e)(B)(ii) hereof.
(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 Employer pursuant to employee benefit plans of the Employer
or otherwise.
8. Withholding. All
payments required to be made by the Employer hereunder to the Executive shall
be
subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Employer may reasonably determine should be withheld
pursuant to any applicable law or regulation.
9. Assignability. The
Employer 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 Employer may hereafter merge or consolidate or to which the Employer
may transfer all or substantially all of its 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 Employer 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:
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To
the Employer:
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Board
of Directors
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| Abington Savings Bank | ||
| 000 Xxx Xxxx Xxxx | ||
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Xxxxxxxxxx,
Xxxxxxxxxxxx
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To
the Executive:
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Xxxx
X. Xxxxxxxx
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At
the address last appearing on the personnel records of the
Employer
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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 and signed by the Executive and such officer or officers as may
be
specifically designated by the Board of Directors of the Employer to sign
on its
behalf. No waiver by any party hereto at any time of any breach 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. In addition, notwithstanding anything in this
Agreement to the contrary, the Bank may amend in good faith any terms of
this
Agreement, including retroactively, in order to comply with Section 409A
of the
Code.
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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. 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.
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 for the American Arbitration Association, Philadelphia, Pennsylvania,
and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof.
15. Nature
of Obligations. Nothing contained herein shall create or
require the Employer 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 Employer hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employer.
16. 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.
17. Changes
in Statutes or Regulations. If any statutory or regulatory
provision referenced herein is subsequently changed or re-numbered, or is
replaced by a separate provision, then the references in this Agreement to
such
statutory or regulatory provision shall be deemed to be a reference to such
section as amended, re-numbered or replaced.
18. 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.
19. 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 FDIA (12 U.S.C. §1828(k)) and the regulations
promulgated thereunder, including 12 C.F.R. Part 359. In the event of
the Executive’s termination of employment with the Bank for Cause, all
employment relationships and managerial duties with the Bank shall immediately
cease regardless of whether the Executive is in the employ of the Corporation
following such termination. Furthermore, following such termination
for Cause, the Executive will not, directly or indirectly, influence or
participate in the affairs or the operations of the Bank.
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20. Payment
of Costs and Legal Fees and Reinstatement of Benefits. In
the event any dispute or controversy arising under or in connection with
the
Executive’s termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the Executive shall be entitled to the
payment of (a) all legal fees incurred by the Executive in resolving such
dispute or controversy, and (b) any back-pay, including Base Salary, bonuses
and
any other cash compensation, fringe benefits and any compensation and benefits
due to the Executive under this Agreement, within thirty (30) days following
the
date such judgment, arbitration or settlement becomes final and
non-appealable.
21. Entire
Agreement. This Agreement embodies the entire agreement
between the Employer and the Executive with respect to the matters agreed
to
herein. All prior agreements between the Employer and the Executive
with respect to the matters agreed to herein, including the Prior Agreement
between the Employer and the Executive, are hereby superseded and shall have
no
force or effect.
IN
WITNESS WHEREOF, this Agreement is
effective as of the date first written above.
THIS
AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.
| Attest | ABINGTON SAVINGS BANK | ||
| /s/ Xxxxx Xxxxxxxxxx |
By:
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/s/ Xxxxxx X. Xxxxx | |
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Xxxxxx
X. Xxxxx
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President
and Chief Executive Officer
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EXECUTIVE
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| /s/ Xxxx X. Xxxxxxxx | |||
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By:
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Xxxx
X. Xxxxxxxx
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