EXHIBIT 10.3
CONSULTING AND NON-COMPETITION AGREEMENT
THIS CONSULTING AND NON-COMPETITION AGREEMENT (this "Agreement") is
entered into as of August 1, 2002, by and between Xxxxxx Bancorp, Inc., a
Delaware corporation ("Roslyn"), and Xxxx X. Xxxxxxxxx, residing at 000 Xxxxx
Xxxx, Xxxxx Xxxx, X.X. 00000 ("Consultant"), who currently serves as an
executive officer and Chairman of Roslyn.
WHEREAS, Consultant wishes to retire from his position as an executive
officer of Roslyn but not as a member of the Board of Directors of Directors of
either Roslyn or The Xxxxxx Savings Bank (the "Bank") and not as Chairman of the
Board of Directors of Roslyn; and
WHEREAS, Roslyn recognizes the specialized knowledge and expertise of
Consultant related to the financial affairs of Xxxxxx; and
WHEREAS, to ensure the continued availability of Consultant, Xxxxxx and
Consultant desire to enter into a non-competition agreement and consulting
relationship upon the terms and conditions hereinafter contained.
NOW, THEREFORE, in consideration of the covenants and terms contained in
this Agreement as set forth herein and of the mutual benefits accruing to Xxxxxx
and to Consultant from the relationship to be established between the parties by
the terms of this Agreement, Xxxxxx and Consultant agree as follows:
1. CONSULTING SERVICES.
(a) Consultant undertakes to provide his personal advice and counsel
to Xxxxxx in connection with the business of Xxxxxx, including
matters related to financial affairs of Xxxxxx, consulting with
Xxxxxx regarding the operations and customer relationships,
providing introductions to customers, and serving as adviser to
Xxxxxx, subject to the terms and conditions which are set forth
herein.
(b) Consultant shall exercise a reasonable degree of skill, prudence
and care in performing the services rendered to in this Section
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(c) During the Consulting Period, Consultant shall be treated as an
independent contractor and shall not be deemed to be an employee
of Xxxxxx, or any of its subsidiaries and affiliates. However,
any payments to be made to Consultant hereunder shall be subject
to withholding of such amounts, if any, relating to income tax
and other payroll deductions as may be required by law or
regulation.
(d) Consultant acknowledges that as of the date of this Agreement he
will have no rights under any employment agreement or similar
agreement between Consultant and Xxxxxx, or any of its
subsidiaries and affiliates, whether or not in writing, and
that Xxxxxx will have no further obligations under any
employment agreement or similar agreement providing for similar
payments or benefits to Consultant except that the foregoing
limitation shall not effect the provision of medical and other
similar benefits to be made available to Consultant in
accordance herewith and any other benefits to which Consultant
is or may become entitled in accordance with the terms of any
retirement plan, supplemental retirement plan, pension plan,
profit-sharing plan, stock incentive or option plan or any other
employee benefit plan based on grants made to him under such
plans prior to the date hereof in respect of his service as an
employee of Xxxxxx or its affiliates.
(e) Consultant and Xxxxxx acknowledge that Consultant does not
intend to, and will not be required to, relinquish his title as
Chairman of the Board of Xxxxxx during the term of this
agreement unless Roslyn's CEO, in his discretion, determines
that it is in the best interests of the company that such title
be relinquished, or Roslyn's Board of shareholders determine, by
an affirmative vote conducted in accordance with the company's
by-laws, that he should not continue to hold such title.
2. TERM AND TERMINATION; EFFECT OF TERMINATION.
The term of this Agreement shall begin on the date first written above
and shall continue for a period of three (3) years thereafter
("Consulting Period") unless terminated in accordance with (a), (b), or
(c) as set forth below.
(a) Termination for Just Cause. Xxxxxx may terminate this Agreement
at any time for "Just Cause." Termination for "Just Cause" shall
be defined as termination because of Consultant's personal
dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, or willful violation of any law, rule
or regulation related to the business or operations of Xxxxxx or
its subsidiaries. Any determination regarding Consultant's
termination for Just Cause shall be made by a majority of the
disinterested members of Roslyn's Board of Directors (after
reasonable notice to Consultant and the opportunity to be heard
with counsel on the reasons therefor.)
(b) Death or Disability. In the event of Consultant's death or
permanent disability (as determined by a physician selected by
Xxxxxx), this Agreement shall terminate.
(c) Material Breach. (i) In the event of a material breach of the
terms of this Agreement by Consultant that is not cured after
ten days written notice from Xxxxxx to Consultant, then Xxxxxx
may terminate this Agreement by written notice of termination
provided to Consultant. (ii) In the event of a material breach
of the terms of this Agreement by Xxxxxx that is not cured after
ten days written notice from Consultant to Xxxxxx, then
Consultant may terminate this Agreement by written notice of
termination provided to Xxxxxx.
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(d) Termination Without Cause; Change in Control. In the event of
Consultant's (i) termination without Just Cause or (ii) upon the
occurrence of a Change in Control during the Consulting Period,
this Agreement shall terminate. For purposes of this Agreement,
"Change in Control" shall have the same meaning as set forth in
the Xxxxxx Bancorp 2001 Stock-Based Incentive Plan, as in effect
on the date hereof.
(e) Effect of Termination. In the event of Consultant's resignation,
termination for Just Cause or --------------------- termination
by Xxxxxx for Consultant's material breach of this Agreement
pursuant to Section 2(c)(i), no further payments or benefits
shall be payable or provided to Consultant under this Agreement,
other than reimbursement for Consultant's expenses incurred
prior to such termination pursuant to Section 3(b). In the event
of (i) Consultant's termination by Xxxxxx without Just Cause or
by Consultant for Roslyn's material breach of this Agreement
pursuant to Section 2(c)(ii), (ii) Consultant's termination by
reason of his death or disability or (iii) the occurrence of a
Change in Control during the Consulting Period, Consultant (or
his guardian, estate, or designated beneficiary, if applicable)
shall be entitled to receive the payments and benefits he would
have received under Section 3 had he continued to provide
services through the expiration of the Consulting Period. In
such event, the payments required to be made to Consultant
hereunder shall, at the Consultant's (or his guardian's,
estate's or beneficiary's, as applicable) election, be made in a
lump sum. Consultant shall not be required to seek any other
employment in mitigation of such payments. Roslyn's obligation
to make such payments and to provide the automobile specified in
Section 3(c)(i) shall survive termination of this Agreement.
3. COMPENSATION AND EXPENSES.
(a) Xxxxxx agrees to pay Consultant for his services performed under
this Agreement and for his commitments and agreements as
contained herein, including Section 4 herein, $250,000 per annum
payable no less than monthly throughout the Term of this
Agreement.
(b) Xxxxxx hereby agrees to reimburse the Consultant for all
reasonable expenses incurred by the Consultant on behalf of and
with the consent of Xxxxxx, provided that the Consultant shall
furnish appropriate documentation of such expenses and receives
prior approval of such expenses in accordance with Roslyn's
expense policies and practices applicable to its directors.
(c) During the Consulting Period, Consultant shall be entitled to
receive health and dental insurance coverage on the same basis
and to the same extent as if he were an executive officer of
Xxxxxx. In the event that such coverage is not available through
Roslyn's regular employee benefit program, as the same may be in
effect
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from time to time, by reason of the Consultant's status as a
non-employee, Xxxxxx shall provide substantially comparable
coverage on an individual basis; provided, however, that Xxxxxx
shall not be required to spend in excess of 150% of the cost of
such coverage through its regular program to obtain individual
coverage. In addition, Xxxxxx shall make available to Consultant
the following additional benefits during the Consulting Period
hereof:
(i) the automobile used by Consultant prior to retirement
and on the same terms as such vehicle was used by
Consultant immediately prior to his retirement. Upon the
expiration of the Consulting Period or the termination
of the Agreement for any reason (other than for Just
Cause), Xxxxxx shall transfer unencumbered title to the
automobile to Consultant, subject to appropriate tax
reporting;
(ii) an office at Roslyn's headquarters location in Jericho,
New York, or such other mutually agreeable location as
Roslyn and Consultant shall determine (in either case,
the "Office Location"); and
(iii) use of an administrative assistant, cell phone, fax and
other administrative utilities provided by Xxxxxx at the
Office Location to assist consultant with his clerical
or secretarial needs, all substantially as currently
provided.
(d) Nothing herein contained is intended to restrict Consultant's
rights to receive fees for his services as a member of the Board
of Directors of Xxxxxx and the Bank, or as a member of any
committee of such boards, on the same basis and to the same
extent as any other member of such boards, except that
Consultant shall be entitled to receive fees for his attendance
at any meeting of a Committee of the Xxxxxx or Bank Board only
to the extent that his presence is requested by the Chief
Executive Officer of Roslyn or the Bank, as applicable.
4. OTHER CONDITIONS.
Consultant shall have no authority over any employee or officer of
Xxxxxx, or any of its subsidiaries and affiliates, nor shall Xxxxxx be
required in any manner to implement any plans or suggestions Consultant
may provide.
5. NON-COMPETITION AND CONFIDENTIAL BUSINESS.
(a) Consultant further acknowledges and agrees that during his
service as an officer and employee of Xxxxxx prior to the date
hereof, that certain highly confidential information regarding
Xxxxxx and its affiliates has been, and during his service as a
Consultant may be, imparted to him. Consultant, during the term
of this Agreement, will not, without the prior express written
consent of Xxxxxx, directly
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or indirectly communicate or divulge to, or use for his own
benefit or for the benefit of any other person, firm,
association, or corporation, any of Roslyn's or its
subsidiaries' or affiliates' trade secrets, proprietary data or
other such confidential information communicated to or otherwise
learned or acquired by Consultant from Xxxxxx during such
employment or the Consulting Period except that Consultant may
disclose such matters to the extent that disclosure is (a)
requested by Xxxxxx in the course of the consulting relationship
with Xxxxxx or (b) required by a court or other governmental
agency of competent jurisdiction; provided that Executive shall
have (a) promptly notified Xxxxxx of the receipt of any such
subpoena or order, (b) consulted with Xxxxxx as to the
advisability of taking steps to resist or narrow the scope of
the disclosure contemplated thereby and (c) cooperated with
Xxxxxx in any efforts it may make to obtain an order or other
reliable assurance that confidential treatment will be accorded
to such advice and the terms of this Agreement.
(b) During the Consulting Period, Consultant hereby agrees that he
shall not without Roslyn's prior written consent, engage in
providing professional services or enter into employment as an
employee, director, consultant, representative, otherwise with,
any financial services enterprise that performs services similar
to or I competition with those provided by Xxxxxx or any of its
affiliates (including but not limited to a savings and loan
association, bank or credit union).
(c) During the Consulting Period, Consultant hereby agrees that he
shall not, on his own behalf or on behalf of others, employ,
solicit, or induce, or attempt to employ, solicit or induce, any
employee of Xxxxxx for employment with any financial services
enterprise (including but not limited to a savings and loan
association, bank or credit union), nor will Consultant directly
or indirectly, on his behalf or for others, seek to influence
any Roslyn employee to leave Roslyn's employ.
(d) Consultant further agrees that, during the Consulting Period, he
shall abide by all of the policies of Xxxxxx or its affiliates
that Roslyn's General Counsel reasonably deems to be applicable
to Consultant's services or engagement hereunder of which the
Consultant is provided notice and a copy of such policy,
including, but not limited to Roslyn's Xxxxxxx Xxxxxxx Policy.
6. ENFORCEMENT.
Consultant acknowledges and agrees that any violation by him of the
covenants set forth in this Agreement would cause irreparable injury to
Xxxxxx. Consultant further acknowledges and agrees that in the event of
a breach or threatened breach of the provisions of this covenants
contained in Section 5 hereof, Xxxxxx shall be entitled to injunctive
relief against him by any court of competent jurisdiction having the
authority to grant such relief. Nothing herein, however, shall be
construed as prohibiting Xxxxxx
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from pursuing any other remedies which may be available to it for such a
breach or threatened breach, including the recovery of damages from
Consultant.
7. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon, Xxxxxx
and its successors and assigns, including, without limitation, any
corporation or agency which may acquire all or substantially all of
Roslyn's assets and businesses or with which Xxxxxx may be consolidated
or merged.
8. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the parties. It may
not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, notification or
discharge is sought.
9. SEVERABILITY.
It is the desire and intent of the parties that the provisions of this
Agreement shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such
provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made. In addition, should any
court determine that the provisions of this Agreement shall be
unenforceable with respect to scope, duration or geographic area, such
court shall be empowered to substitute, to the extent enforceable,
provisions similar hereto or other provisions so as to provide to
Xxxxxx, to the fullest extent permitted by applicable law, the benefits
intended by this Agreement.
10. WAIVER OF BREACH.
Failure to insist upon strict compliance with any terms, covenants, or
conditions hereof shall not be deemed a waiver or relinquishment of such
right or power at any other time or times.
11. ARBITRATION.
Unless otherwise mutually agreed to by Consultant and Xxxxxx in writing,
any controversy or claim arising out of or relating to this Agreement or
the breach thereof
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shall be settled by binding arbitration in accordance with the
Commercial Arbitration rules of the American Arbitration Association,
with such arbitration hearing to be held at the offices of the American
Arbitration Association ("AAA") nearest to Jericho, New York, and
judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. Either Consultant or Xxxxxx may
file a request for such arbitration with the AAA.
12. INDEMNIFICATION.
Xxxxxx, at its expense, shall provide Consultant (including his heirs,
executors and administrators) with coverage under Roslyn's standard
directors' and officers' liability policy for its directors and
executive officers and shall indemnify Consultant (including his heirs,
executors and administrators) to the fullest extent permitted under
Delaware law against all expenses and liabilities reasonably incurred by
him in connection with or arising out of any action, suit or proceeding
in which he may be involved by reason of his having been a director or
officer of or consultant to the Company (whether or not he continues to
be a director, officer or consultant at the time of incurring such
expenses or liabilities), such expenses and liabilities to include, but
not be limited to, judgments, court costs and attorneys' fees and the
costs of reasonable settlements; provided that Consultant promptly given
Xxxxxx written notice of any claims or demands against him for which
Xxxxxx is responsible under such indemnification. The provisions of this
Section 12 shall survive termination of this Agreement.
13. APPLICABLE LAW.
This Agreement shall be governed by the laws of the State of New York.
In witness whereof, this Agreement is entered into as of the date first
written above.
XXXXXX BANCORP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
/s/ Xxxx X. Xxxxxxxxx
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