ESB BANK AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.2
ESB
BANK
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is made and
entered into as of the 20th day of November 2007, between ESB Bank (the
“Bank”),
a Pennsylvania chartered savings bank and a wholly owned subsidiary of
ESB
Financial Corporation (the “Corporation”), and Xxxxxxxxx X. Xxxxxxxx (the
“Executive”).
WHEREAS,
the Executive is currently employed as President and Chief Executive
Officer of
the Bank pursuant to an amended employment agreement between the Bank
and the
Executive entered into as of December 1, 2002 and which was further amended
and
restated as of November 21, 2006 (the “Prior Agreement”);
WHEREAS,
the Executive is currently employed as President and Chief Executive
Officer of
the Corporation, a Pennsylvania corporation (the Corporation and the
Bank are
referred to together herein as the “Employers”), pursuant to an amended
employment agreement entered into as of December 1, 2002, which was amended
and
restated as of November 21, 2006 and which is being further amended and
restated
as of the date hereof;
(e) Code. “Code”
shall mean the Internal Revenue Code of 1986, as amended.
(i) any
material breach of this Agreement by the Employers, 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 as prescribed in Section 2, or (C) any requirement that
the
Executive report to a corporate officer or employee of the Employers
instead of
reporting directly to the Boards of Directors of the Employers, or
2
(ii) any
material change in the geographic location at which the Executive must
perform
her services under this Agreement;
provided,
however, that prior to any termination of employment for Good Reason,
the
Executive must first provide written notice to the Employers within ninety
(90)
days of the initial existence of the condition, describing the existence
of such
condition, and the Employers shall thereafter have the right to remedy
the
condition within thirty (30) days of the date the Employers received
the written
notice from the Executive. If the Employers remedy 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 Employers do 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.
(a) The
Bank hereby employs the Executive as President and Chief Executive Officer
and
the Executive hereby accepts said employment and agrees to render such
services
to the Bank on the terms and conditions set forth in this
Agreement. The term of employment under this Agreement shall be until
the three-year anniversary of December 1, 2007 and, upon approval of
the Board
of Directors of the Bank, shall extend for an additional year on December
1st of
each subsequent
calendar year such that at any time after December 1, 2008 the remaining
term of
this Agreement shall be from two to three years, absent notice of non-renewal
as
set forth below. Prior to December 1, 2008 and each December 1st thereafter,
the Board of Directors of the Bank 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, and the term shall continue to extend each year
if the
Board of Directors approves such extension unless the Executive gives
written
notice to the Employers of the Executive's election not to extend the
term, with
such written notice to be given not less than thirty (30) days prior
to any such
December 1st. If the Board of Directors elects not to extend the term,
it shall
give written notice of such decision to the Executive not less than thirty
(30)
days prior to any such December 1st. If any party gives timely notice
that the term will not be extended as of December 1st of
any year, 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.
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(b) During
the term of this Agreement, the Executive shall perform such executive
services
for the Bank as may be consistent with her titles and from time to time
assigned
to her by the Bank's Board of Directors.
(a) The
Employers shall compensate and pay the Executive for her services during
the
term of this Agreement at a minimum base salary of $388,100 per year
(“Base
Salary”), which may be increased from time to time in such amounts as may be
determined by the Boards of Directors of the Employers and may not be
decreased
without the Executive's express written consent. In addition to her
Base Salary, the Executive shall be entitled to receive during the term
of this
Agreement such bonus payments as may be determined by the Boards of Directors
of
the Employers.
(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 Employers, to the
extent
commensurate with her then duties and responsibilities, as fixed by the
Boards
of Directors of the Employers. The Bank 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 Bank 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
Bank. 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.
(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
Boards of Directors of the Employers, which shall in no event be less
than six
weeks per annum. The Executive shall not be entitled to receive any
additional compensation from the Employers 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 Boards of Directors
of the
Employers.
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(d) During
the term of this Agreement, in keeping with past practices, the Employers
shall
continue to provide the Executive with the automobile she presently drives.
The
Employers shall be responsible and shall pay for all costs of insurance
coverage, repairs, maintenance and other incidental expenses, including
license,
fuel and oil. If such expenses are paid in the first instance by the
Executive, the Employers shall reimburse the Executive therefor. Such
reimbursement shall be paid promptly by the Employers and in any event
no later
than March 15 of the year immediately following the year in which such
expenses
were incurred.
(e) In
the event the Executive's employment is terminated by the Corporation
due to the
Executive’s Disability, Retirement or death, the Employers shall provide
continued life, medical, dental and disability coverage substantially
identical
to the coverage maintained by the Employers for the Executive immediately
prior
to her termination. The medical and dental coverage shall continue
until the earlier of (a) the Executive’s death, except for coverage of any
beneficiaries pursuant to Section 3(f) below, or (b) the date on which
the
Executive is entitled to receive benefits from a subsequent employer
which are
substantially similar to the medical and dental coverage provided by
the
Corporation. The life and disability coverage shall cease upon the
earlier of the expiration of the remaining term of this Agreement or
the
Executive’s death. During the period that the Executive receives
medical and dental coverage and/or life and disability coverage, the
Executive
shall pay the employee share of the costs of such coverages as if she
was still
an employee; provided that any insurance premiums payable by the Employers
or
any successors pursuant to this Section 3(e) shall be payable at such
times and
in such amounts as if the Executive was still an employee of the Employers,
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 Employers in any taxable year shall not affect the amount of insurance
premiums required to be paid by the Employers in any other taxable year;
and
provided further that if the participation of the Executive or other
covered
dependents in any group insurance plan is barred, the Employers shall
either
arrange to provide such persons with insurance benefits substantially
similar to
those which the Executive was entitled to receive under such group insurance
plan or, if such coverage cannot be obtained, pay a lump sum cash equivalency
amount within thirty (30) days following the Date of Termination based
on the
annualized rate of premiums being paid by the Employers as of the Date
of
Termination.
(f) In
the event of the Executive's death during the term of this Agreement,
her
spouse, estate, legal representative or named beneficiaries (as directed
by the
Executive in writing) shall be paid on a monthly basis the Executive's
annual
compensation from the Employers at the rate in effect at the time of
the
Executive's death for the remainder of the term of this Agreement, as
well as
the medical and dental benefits specified in Section 3(e) above to any
dependents of the Executive who were covered by the Employers at the
time of the
Executive’s death. In the event the Executive’s employment is
terminated due to Disability during the term of this Agreement, the Executive
shall be paid on a monthly basis (i) the Executive’s annual compensation from
the Employers at the rate in effect at the time of termination due to
Disability
for the remainder of the term of this Agreement, as well as the benefits
specified in Section 3(e) hereof, and (ii) upon the expiration of the
term of
this Agreement, two-thirds (66.67%) of the Executive’s Base Salary at the time
of termination due to Disability until the Executive reaches the normal
retirement age of 65; provided however, there shall be deducted from
the amounts
paid the Executive pursuant to this Section 3(f), any amounts
actually paid to the Executive pursuant to any disability insurance or
similar
plan or program which the Employers have instituted or may institute
on behalf
of the Executive or their employees for the purpose of compensating employees
in
the event of disability, the Social Security Act, the Workers Compensation
or
Occupational Disease Act, or any state disability benefit law; and provided
further however, that such payments shall be delayed until the first
business
day of the month following the lapse of six months from the date of termination
of employment if deemed necessary by the Employers to avoid the tax and
interest
penalties imposed by Section 409A of the Code. If the payments are
delayed pursuant to the last proviso clause in the preceding sentence,
then the
payments that would have been provided to the Executive in the absence
of such
six-month delay shall be paid to the Executive on the first business
day of the
month following the lapse of six months from the date of termination
of
employment. Any insurance premiums payable by the Employers or any
successors pursuant to this Section 3(f) shall be payable at such times
and in
such amounts as if the Executive was still an employee of the Employers,
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
Employers
in any taxable year shall not affect the amount of insurance premiums
required to be paid by the Employers in any other taxable year; and provided
further that if the participation of the Executive or other covered dependents
in any group insurance plan is barred, the Employers shall either arrange
to
provide such persons with insurance benefits substantially similar to
those
which the Executive was entitled to receive under such group insurance
plan or,
if such coverage cannot be obtained, pay a lump
sum cash equivalency amount
within thirty (30) days following the Date of Termination
based on the annualized rate of premiums being paid by the Employers
as of the
Date of Termination.
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(g) The
Executive's compensation, benefits and expenses shall be paid by the
Corporation
and the Bank in the same proportion as the time and services actually
expended
by the Executive on behalf of each respective Employer.
6
(a) The
Bank 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
her
employment hereunder for any reason.
(b) In
the event that (i) the Executive's employment is terminated by the Bank
for
Cause or (ii) the Executive terminates her employment hereunder other
than for
Disability, Retirement, death or 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) 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, except as provided for in Sections 3(e) and 3(f)
hereof.
(d) In
the event that (i) the Executive's employment is terminated by the Bank
for
other than Cause, Disability, Retirement or the Executive's death or
(ii) such
employment is terminated by the Executive for Good Reason, then the Bank
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 to three (3) times that portion of the Executive's Average
Annual
Compensation paid by the Bank,
(B) maintain
and provide for a period ending at the earlier of (i) thirty-six (36)
months
after 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)), at no cost to the Executive, the
Executive's continued participation in all group insurance, life insurance,
health and accident insurance, and disability insurance offered by the
Bank in
which the Executive was participating immediately prior to the Date of
Termination, with such coverage to be provided on the same terms as similar
coverage is provided to other employees of the Employers; provided that
any
insurance premiums payable by the Employers or any successors pursuant
to this
Section 5(d)(B) shall be payable at such times and in such amounts (except
that
the Employers shall also pay any employee portion of the premiums) as
if the
Executive was still an employee of the Employers, 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 Employers in any taxable
year
shall not affect the amount of insurance premiums required to be paid
by the
Employers in any other taxable year. If the participation of the
Executive or other covered dependents in any group insurance plan is
barred, the
Employers shall either arrange to provide such persons with insurance
benefits
substantially similar to those which the Executive was entitled to receive
under
such group insurance plan or, if such coverage cannot be obtained, pay
a lump
sum cash equivalency amount within thirty (30) days following the Date
of
Termination based on the annualized rate of premiums being paid by the
Employers
as of the Date of Termination;
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(C) if
the Executive is still receiving medical and dental coverage pursuant
to Section
5(d)(B) above upon the expiration of thirty-six (36) months after the
Date of
Termination, maintain and provide medical and dental coverage for the
Executive
for a period ending at the earlier of (i) the Executive’s death or (ii) the date
on which the Executive is entitled to receive benefits from a subsequent
employer which are substantially similar to the medical and dental coverage
provided by the Bank, provided that during the period that the Executive
receives medical and dental coverage pursuant to this Section 5(d)(C),
the
Executive shall pay the employee share of the costs of such coverage
as if she
was still an employee, and provided further that any insurance premiums
payable
by the Employers or any successors pursuant to this Section 5(d)(C) shall
be
payable at such times and in such amounts as if the Executive was still
an
employee of the Employers, 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 Employers in any taxable
year
shall not affect the amount of insurance premiums required to be paid
by the
Employers in any other taxable year. If the participation of the
Executive or other covered dependents in any group insurance plan is
barred, the
Employers shall either arrange to provide such persons with insurance
benefits
substantially similar to those which the Executive was entitled to receive
under
such group insurance plan or, if such coverage cannot be obtained, pay
a lump
sum cash equivalency amount within thirty (30) days following the Date
of
Termination based on the annualized rate of premiums being paid by the
Employers
as of the Date of Termination; and
(D) pay
to the Executive, in a lump sum within thirty (30) following the Date
of
Termination, a cash amount equal to the projected cost to the Employers
of
providing benefits to the Executive for a period of three years pursuant
to any
other employee benefit plans, programs or arrangements offered by the
Employers
in which the Executive was entitled to participate immediately prior
to the Date
of Termination (excluding retirement plans or stock compensation plans
of the
Employers), with the projected cost to the Employers 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.
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(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) and (C) above.
(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.
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| To the Bank: | Secretary | |
| ESB Bank | ||
| 000 Xxxxxxxx Xxxxxx | ||
| Xxxxxxx Xxxx, Xxxxxxxxxxxx 00000 | ||
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To the Corporation: |
Secretary
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ESB
Financial Corporation
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000
Xxxxxxxx Xxxxxx
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Xxxxxxx
Xxxx, Xxxxxxxxxxxx 00000
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To the Executive: |
Xxxxxxxxx
X. Xxxxxxxx
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At
the address last appearing on
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the
personnel records of the Employers
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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.
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Attest:
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ESB
BANK
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/s/
Xxxxx X. Xxxxx
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By:
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/s/
Xxxxxxx X. Xxxxxxxxx
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Xxxxx
X. Xxxxx
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Xxxxxxx
X. Xxxxxxxxx
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Group
Senior Vice President of Operations
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Chairman
of the Board of Directors
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and
Secretary
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EXECUTIVE
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By:
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/s/
Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxx
X. Xxxxxxxx
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