1
Exhibit 10.8
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------------
This First Amendment to Employment Agreement, is made and entered into
this 29th day of July, 1998, by and between Charter One Financial, Inc. (the
"Company") and Xxxxxxx Xxxx Xxxx (the "Employee").
WHEREAS, the Company and the Employee desire to amend that certain
Employment Agreement between them, dated October 31, 1995 (the "Employment
Agreement");
WHEREAS, the Board of Directors believes that it is in the best
interests of the Company and its subsidiaries for the Company to enter into this
First Amendment to Employment Agreement with the Employee in order to assure
continuity of management of the Company and its subsidiaries; and
WHEREAS, the Board of Directors has approved and authorized the
execution of this First Amendment to Employment Agreement:
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. DEFINITIONS. All capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Employment Agreement.
2. AMENDMENTS TO EMPLOYMENT AGREEMENT.
(a) The Employment Agreement is hereby amended by deleting the first
and second sentences of Section 2 of the Employment Agreement and inserting in
their place the following:
The term of this Agreement shall be the period from
the Effective Date to July 1, 2001. Beginning on July 1, 1999
and on each July 1 thereafter (each an "Extension Date"), 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 Employee in writing at
least 90 days prior to the Extension Date that the term of
this Agreement shall not be extended further, and PROVIDED
FURTHER that the Employee has not received an unsatisfactory
performance review by either the Board of Directors or the
board of directors of the Bank.
(b) The Employment Agreement is hereby amended by deleting Subsection
(c) of Section 7 of the Employment Agreement and inserting in its place the
following:
(c) CHANGE IN CONTROL; TAX GROSS UP. In the event
that the Employee experiences an Involuntary Termination
within the 12 months preceding or the 24 months following a
Change in Control, in addition to the Company's obligations
under Section 7(a) of this Agreement, the Company shall pay to
the Employee in cash, within
2
30 days after the later of the date of such Change in Control
or the Date of Termination, an amount equal to 299% of the
Employee's "base amount" as determined under Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code").
In the event that any payments or benefits provided
or to be provided to the Employee, whether pursuant to this
Agreement or 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 Adjusted Gross Up
Payment. The "Adjusted Gross Up Payment" shall be the amount
equal to the aggregate of (i) the excise tax payable by the
Employee pursuant to Section 4999 of the Code (the "Penalty
Tax") and (ii) 80% of the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Penalty Tax, utilizing the maximum effective
rate of tax of the Employee including federal, state, local
and medicare tax rates, over the Penalty Tax.
For purposes of determining the amount of the
Adjusted Gross Up Payment, the value of any non-cash benefits
and deferred payments or benefits subject to the Penalty Tax
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 Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to be less than the amount calculated in the determination of
the actual Adjusted Gross Up Payment made by the Company, the
Employee shall repay to the Company, at the time that such
reduction in the amount of Penalty Tax is finally determined,
the portion of the Adjusted 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 Adjusted Gross Up Payment to the date of
the repayment. The amount of the reduction of the Adjusted
Gross Up Payment shall reflect any subsequent reduction in the
Penalty Tax resulting from such repayment.
In the event that, after the Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to exceed the amount anticipated at the time the Adjusted
Gross Up Payment was made, the Company shall pay to the
Employee, in immediately available funds, at the time that
such additional amount of Penalty Tax is finally determined,
an additional payment (the "Additional
2
3
Gross Up Payment") equal to the aggregate of (i) such
additional amount of Penalty Tax (the "Additional Penalty
Tax"), (ii) 80% of the the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Additional Penalty Tax, utilizing the maximum
effective rate of tax of the Employee including federal,
state, local and medicare taxes, over the Additional Penalty
Tax and (iii) interest and penalties, if any, owed by the
Employee with respect to such Additional Penalty Tax and other
tax attributable to the Additional Gross Up Payment. The
Company shall have the right to challenge, on the Employee's
behalf, any Penalty Tax or Additional Penalty Tax assessment
against him as to which the Employee is entitled to (or would
be entitled if such assessment is finally determined to be
proper) an Adjusted 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 Employee and hold him harmless, on an
after-tax basis, from any Penalty Tax, Additional Penalty Tax
or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment costs and
expenses by the Company.
(c) The Employment Agreement is hereby amended by inserting the
following after Section 16 of the Employment Agreement:
17. DEFERRAL OF NON-DEDUCTIBLE COMPENSATION. In the
event that the Employee's aggregate compensation (including
compensatory benefits which are deemed remuneration for
purposes of Section 162(m) of the Code) from the Company and
the Consolidated Subsidiaries for any calendar year exceeds
the greater of (i) $1,000,000 or (ii) the maximum amount of
compensation deductible by the Company or any of the
Consolidated Subsidiaries in any calendar year under Section
162(m) of the Code (the "maximum allowable amount"), then any
such amount in excess of the maximum allowable amount shall be
mandatorily deferred with interest thereon at 8% per annum to
a calendar year such that the amount to be paid to the
Employee in such calendar year, including deferred amounts and
interest thereon, does not exceed the maximum allowable
amount. Subject to the foregoing, deferred amounts including
interest thereon shall be payable at the earliest time
permissible.
3
4
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Employment Agreement as of the day and year first written above.
Attest: Charter One Financial, Inc.
/s/ Xxxxxx X. Xxxx /s/ Xxxxxxx X. Xxx
-------------------------- --------------------------
Xxxxxx X. Xxxx, Secretary By: Xxxxxxx X. Xxx
Its: Senior Vice President
Employee
/s/ Xxxxxxx Xxxx Xxxx
--------------------------
Xxxxxxx Xxxx Xxxx
4
5
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------------
This First Amendment to Employment Agreement, is made and entered into
this 29th day of July, 1998, by and between Charter One Financial, Inc. (the
"Company") and Xxxxxxx X. Xxx (the "Employee").
WHEREAS, the Company and the Employee desire to amend that certain
Employment Agreement between them, dated October 31, 1995 (the "Employment
Agreement");
WHEREAS, the Board of Directors believes that it is in the best
interests of the Company and its subsidiaries for the Company to enter into this
First Amendment to Employment Agreement with the Employee in order to assure
continuity of management of the Company and its subsidiaries; and
WHEREAS, the Board of Directors has approved and authorized the
execution of this First Amendment to Employment Agreement:
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. DEFINITIONS. All capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Employment Agreement.
2. AMENDMENTS TO EMPLOYMENT AGREEMENT.
(a) The Employment Agreement is hereby amended by deleting the first
and second sentences of Section 2 of the Employment Agreement and inserting in
their place the following:
The term of this Agreement shall be the period from
the Effective Date to July 1, 2001. Beginning on July 1, 1999
and on each July 1 thereafter (each an "Extension Date"), 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 Employee in writing at
least 90 days prior to the Extension Date that the term of
this Agreement shall not be extended further, and PROVIDED
FURTHER THAT the Employee has not received an unsatisfactory
performance review by either the Board of Directors or the
board of directors of the Bank.
(b) The Employment Agreement is hereby amended by deleting Subsection
(c) of Section 7 of the Employment Agreement and inserting in its place the
following:
(c) CHANGE IN CONTROL; TAX GROSS UP. In the event
that the Employee experiences an Involuntary Termination
within the 12 months preceding or the 24 months following a
Change in Control, in addition to the Company's obligations
under Section 7(a) of this Agreement, the Company shall pay to
the Employee in cash, within
6
30 days after the later of the date of such Change in Control
or the Date of Termination, an amount equal to 299% of the
Employee's "base amount" as determined under Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code").
In the event that any payments or benefits provided
or to be provided to the Employee, whether pursuant to this
Agreement or 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 Adjusted Gross Up
Payment. The "Adjusted Gross Up Payment" shall be the amount
equal to the aggregate of (i) the excise tax payable by the
Employee pursuant to Section 4999 of the Code (the "Penalty
Tax") and (ii) 80% of the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Penalty Tax, utilizing the maximum effective
rate of tax of the Employee including federal, state, local
and medicare tax rates, over the Penalty Tax.
For purposes of determining the amount of the
Adjusted Gross Up Payment, the value of any non-cash benefits
and deferred payments or benefits subject to the Penalty Tax
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 Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to be less than the amount calculated in the determination of
the actual Adjusted Gross Up Payment made by the Company, the
Employee shall repay to the Company, at the time that such
reduction in the amount of Penalty Tax is finally determined,
the portion of the Adjusted 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 Adjusted Gross Up Payment to the date of
the repayment. The amount of the reduction of the Adjusted
Gross Up Payment shall reflect any subsequent reduction in the
Penalty Tax resulting from such repayment.
In the event that, after the Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to exceed the amount anticipated at the time the Adjusted
Gross Up Payment was made, the Company shall pay to the
Employee, in immediately available funds, at the time that
such additional amount of Penalty Tax is finally determined,
an additional payment (the "Additional
2
7
Gross Up Payment") equal to the aggregate of (i) such
additional amount of Penalty Tax (the "Additional Penalty
Tax"), (ii) 80% of the the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Additional Penalty Tax, utilizing the maximum
effective rate of tax of the Employee including federal,
state, local and medicare taxes, over the Additional Penalty
Tax and (iii) interest and penalties, if any, owed by the
Employee with respect to such Additional Penalty Tax and other
tax attributable to the Additional Gross Up Payment. The
Company shall have the right to challenge, on the Employee's
behalf, any Penalty Tax or Additional Penalty Tax assessment
against him as to which the Employee is entitled to (or would
be entitled if such assessment is finally determined to be
proper) an Adjusted 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 Employee and hold him harmless, on an
after-tax basis, from any Penalty Tax, Additional Penalty Tax
or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment costs and
expenses by the Company.
(c) The Employment Agreement is hereby amended by inserting the
following after Section 16 of the Employment Agreement:
17. DEFERRAL OF NON-DEDUCTIBLE COMPENSATION. In the
event that the Employee's aggregate compensation (including
compensatory benefits which are deemed remuneration for
purposes of Section 162(m) of the Code) from the Company and
the Consolidated Subsidiaries for any calendar year exceeds
the greater of (i) $1,000,000 or (ii) the maximum amount of
compensation deductible by the Company or any of the
Consolidated Subsidiaries in any calendar year under Section
162(m) of the Code (the "maximum allowable amount"), then any
such amount in excess of the maximum allowable amount shall be
mandatorily deferred with interest thereon at 8% per annum to
a calendar year such that the amount to be paid to the
Employee in such calendar year, including deferred amounts and
interest thereon, does not exceed the maximum allowable
amount. Subject to the foregoing, deferred amounts including
interest thereon shall be payable at the earliest time
permissible.
3
8
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Employment Agreement as of the day and year first written above.
Attest: Charter One Financial, Inc.
/s/ Xxxxxx X. Xxxx /s/ Xxxxxxx Xxxx Xxxx
------------------------ ----------------------------------
Xxxxxx X. Xxxx, Secretary By: Xxxxxxx Xxxx Xxxx
Its:Chairman, President and Chief
Executive Officer
Employee
/s/ Xxxxxxx X. Xxx
----------------------------------
Xxxxxxx X. Xxx
4
9
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------------
This First Amendment to Employment Agreement, is made and entered into
this 29th day of July, 1998, by and between Charter One Financial, Inc. (the
"Company") and Xxxxxx X. Xxxx (the "Employee").
WHEREAS, the Company and the Employee desire to amend that certain
Employment Agreement between them, dated October 31, 1995 (the "Employment
Agreement");
WHEREAS, the Board of Directors believes that it is in the best
interests of the Company and its subsidiaries for the Company to enter into this
First Amendment to Employment Agreement with the Employee in order to assure
continuity of management of the Company and its subsidiaries; and
WHEREAS, the Board of Directors has approved and authorized the
execution of this First Amendment to Employment Agreement:
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. DEFINITIONS. All capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Employment
Agreement.
2. AMENDMENTS TO EMPLOYMENT AGREEMENT.
(a) The Employment Agreement is hereby amended by deleting the first
and second sentences of Section 2 of the Employment Agreement and inserting in
their place the following:
The term of this Agreement shall be the period from
the Effective Date to July 1, 2001. Beginning on July 1, 1999
and on each July 1 thereafter (each an "Extension Date"), 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 Employee in writing at
least 90 days prior to the Extension Date that the term of
this Agreement shall not be extended further, and PROVIDED
FURTHER THAT the Employee has not received an unsatisfactory
performance review by either the Board of Directors or the
board of directors of the Bank.
(b) The Employment Agreement is hereby amended by deleting Subsection
(c) of Section 7 of the Employment Agreement and inserting in its place the
following:
(c) CHANGE IN CONTROL; TAX GROSS UP. In the event
that the Employee experiences an Involuntary Termination
within the 12 months preceding or the 24 months following a
Change in Control, in addition to the Company's obligations
under Section 7(a) of this Agreement, the Company shall pay to
the Employee in cash, within
10
30 days after the later of the date of such Change in Control
or the Date of Termination, an amount equal to 299% of the
Employee's "base amount" as determined under Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code").
In the event that any payments or benefits provided
or to be provided to the Employee, whether pursuant to this
Agreement or 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 Adjusted Gross Up
Payment. The "Adjusted Gross Up Payment" shall be the amount
equal to the aggregate of (i) the excise tax payable by the
Employee pursuant to Section 4999 of the Code (the "Penalty
Tax") and (ii) 80% of the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Penalty Tax, utilizing the maximum effective
rate of tax of the Employee including federal, state, local
and medicare tax rates, over the Penalty Tax.
For purposes of determining the amount of the
Adjusted Gross Up Payment, the value of any non-cash benefits
and deferred payments or benefits subject to the Penalty Tax
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 Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to be less than the amount calculated in the determination of
the actual Adjusted Gross Up Payment made by the Company, the
Employee shall repay to the Company, at the time that such
reduction in the amount of Penalty Tax is finally determined,
the portion of the Adjusted 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 Adjusted Gross Up Payment to the date of
the repayment. The amount of the reduction of the Adjusted
Gross Up Payment shall reflect any subsequent reduction in the
Penalty Tax resulting from such repayment.
In the event that, after the Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to exceed the amount anticipated at the time the Adjusted
Gross Up Payment was made, the Company shall pay to the
Employee, in immediately available funds, at the time that
such additional amount of Penalty Tax is finally determined,
an additional payment (the "Additional
2
11
Gross Up Payment") equal to the aggregate of (i) such
additional amount of Penalty Tax (the "Additional Penalty
Tax"), (ii) 80% of the the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Additional Penalty Tax, utilizing the maximum
effective rate of tax of the Employee including federal,
state, local and medicare taxes, over the Additional Penalty
Tax and (iii) interest and penalties, if any, owed by the
Employee with respect to such Additional Penalty Tax and other
tax attributable to the Additional Gross Up Payment. The
Company shall have the right to challenge, on the Employee's
behalf, any Penalty Tax or Additional Penalty Tax assessment
against him as to which the Employee is entitled to (or would
be entitled if such assessment is finally determined to be
proper) an Adjusted 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 Employee and hold him harmless, on an
after-tax basis, from any Penalty Tax, Additional Penalty Tax
or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment costs and
expenses by the Company.
(c) The Employment Agreement is hereby amended by inserting the
following after Section 16 of the Employment Agreement:
17. DEFERRAL OF NON-DEDUCTIBLE COMPENSATION. In the
event that the Employee's aggregate compensation (including
compensatory benefits which are deemed remuneration for
purposes of Section 162(m) of the Code) from the Company and
the Consolidated Subsidiaries for any calendar year exceeds
the greater of (i) $1,000,000 or (ii) the maximum amount of
compensation deductible by the Company or any of the
Consolidated Subsidiaries in any calendar year under Section
162(m) of the Code (the "maximum allowable amount"), then any
such amount in excess of the maximum allowable amount shall be
mandatorily deferred with interest thereon at 8% per annum to
a calendar year such that the amount to be paid to the
Employee in such calendar year, including deferred amounts and
interest thereon, does not exceed the maximum allowable
amount. Subject to the foregoing, deferred amounts including
interest thereon shall be payable at the earliest time
permissible.
3
12
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Employment Agreement as of the day and year first written above.
Attest: Charter One Financial, Inc.
/s/ XXXXXXX X. XXX /s/ Xxxxxxx Xxxx Xxxx
------------------------- ----------------------------------
Xxxxxxx X. Xxx By: Xxxxxxx Xxxx Xxxx
Its:Chairman, President and Chief
Executive Officer
Employee
/s/ Xxxxxx X. Xxxx
----------------------------------
Xxxxxx X. Xxxx
4
13
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------------
This First Amendment to Employment Agreement, is made and entered into
this 29th day of July, 1998, by and between Charter One Financial, Inc. (the
"Company") and Xxxx X. Xxxxxx (the "Employee").
WHEREAS, the Company and the Employee desire to amend that certain
Employment Agreement between them, dated October 31, 1995 (the "Employment
Agreement");
WHEREAS, the Board of Directors believes that it is in the best
interests of the Company and its subsidiaries for the Company to enter into this
First Amendment to Employment Agreement with the Employee in order to assure
continuity of management of the Company and its subsidiaries; and
WHEREAS, the Board of Directors has approved and authorized the
execution of this First Amendment to Employment Agreement:
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. DEFINITIONS. All capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Employment Agreement.
2. AMENDMENTS TO EMPLOYMENT AGREEMENT.
(a) The Employment Agreement is hereby amended by deleting the first
and second sentences of Section 2 of the Employment Agreement and inserting in
their place the following:
The term of this Agreement shall be the period from
the Effective Date to July 1, 2001. Beginning on July 1, 1999
and on each July 1 thereafter (each an "Extension Date"), 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 Employee in writing at
least 90 days prior to the Extension Date that the term of
this Agreement shall not be extended further, and PROVIDED
FURTHER THAT the Employee has not received an unsatisfactory
performance review by either the Board of Directors or the
board of directors of the Bank.
(b) The Employment Agreement is hereby amended by deleting Subsection
(c) of Section 7 of the Employment Agreement and inserting in its place the
following:
(c) CHANGE IN CONTROL; TAX GROSS UP. In the event
that the Employee experiences an Involuntary Termination
within the 12 months preceding or the 24 months following a
Change in Control, in addition to the Company's obligations
under Section 7(a) of this Agreement, the Company shall pay to
the Employee in cash, within
14
30 days after the later of the date of such Change in Control
or the Date of Termination, an amount equal to 299% of the
Employee's "base amount" as determined under Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code").
In the event that any payments or benefits provided
or to be provided to the Employee, whether pursuant to this
Agreement or 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 Adjusted Gross Up
Payment. The "Adjusted Gross Up Payment" shall be the amount
equal to the aggregate of (i) the excise tax payable by the
Employee pursuant to Section 4999 of the Code (the "Penalty
Tax") and (ii) 80% of the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Penalty Tax, utilizing the maximum effective
rate of tax of the Employee including federal, state, local
and medicare tax rates, over the Penalty Tax.
For purposes of determining the amount of the
Adjusted Gross Up Payment, the value of any non-cash benefits
and deferred payments or benefits subject to the Penalty Tax
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 Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to be less than the amount calculated in the determination of
the actual Adjusted Gross Up Payment made by the Company, the
Employee shall repay to the Company, at the time that such
reduction in the amount of Penalty Tax is finally determined,
the portion of the Adjusted 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 Adjusted Gross Up Payment to the date of
the repayment. The amount of the reduction of the Adjusted
Gross Up Payment shall reflect any subsequent reduction in the
Penalty Tax resulting from such repayment.
In the event that, after the Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to exceed the amount anticipated at the time the Adjusted
Gross Up Payment was made, the Company shall pay to the
Employee, in immediately available funds, at the time that
such additional amount of Penalty Tax is finally determined,
an additional payment (the "Additional
2
15
Gross Up Payment") equal to the aggregate of (i) such
additional amount of Penalty Tax (the "Additional Penalty
Tax"), (ii) 80% of the the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Additional Penalty Tax, utilizing the maximum
effective rate of tax of the Employee including federal,
state, local and medicare taxes, over the Additional Penalty
Tax and (iii) interest and penalties, if any, owed by the
Employee with respect to such Additional Penalty Tax and other
tax attributable to the Additional Gross Up Payment. The
Company shall have the right to challenge, on the Employee's
behalf, any Penalty Tax or Additional Penalty Tax assessment
against him as to which the Employee is entitled to (or would
be entitled if such assessment is finally determined to be
proper) an Adjusted 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 Employee and hold him harmless, on an
after-tax basis, from any Penalty Tax, Additional Penalty Tax
or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment costs and
expenses by the Company.
(c) The Employment Agreement is hereby amended by inserting the
following after Section 16 of the Employment Agreement:
17. DEFERRAL OF NON-DEDUCTIBLE COMPENSATION. In the
event that the Employee's aggregate compensation (including
compensatory benefits which are deemed remuneration for
purposes of Section 162(m) of the Code) from the Company and
the Consolidated Subsidiaries for any calendar year exceeds
the greater of (i) $1,000,000 or (ii) the maximum amount of
compensation deductible by the Company or any of the
Consolidated Subsidiaries in any calendar year under Section
162(m) of the Code (the "maximum allowable amount"), then any
such amount in excess of the maximum allowable amount shall be
mandatorily deferred with interest thereon at 8% per annum to
a calendar year such that the amount to be paid to the
Employee in such calendar year, including deferred amounts and
interest thereon, does not exceed the maximum allowable
amount. Subject to the foregoing, deferred amounts including
interest thereon shall be payable at the earliest time
permissible.
3
16
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Employment Agreement as of the day and year first written above.
Attest: Charter One Financial, Inc.
/s/ Xxxxxx X. Xxxx /s/ Xxxxxxx Xxxx Xxxx
------------------------- ----------------------------------
Xxxxxx X. Xxxx, Secretary By: Xxxxxxx Xxxx Xxxx
Its: Chairman, President and Chief
Executive Officer
Employee
/s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx
4
17
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------------
This First Amendment to Employment Agreement, is made and entered into
this 29th day of July, 1998, by and between Charter One Financial, Inc. (the
"Company") and Xxxx X. Xxxx (the "Employee").
WHEREAS, the Company and the Employee desire to amend that certain
Employment Agreement between them, dated October 31, 1995 (the "Employment
Agreement");
WHEREAS, the Board of Directors believes that it is in the best
interests of the Company and its subsidiaries for the Company to enter into this
First Amendment to Employment Agreement with the Employee in order to assure
continuity of management of the Company and its subsidiaries; and
WHEREAS, the Board of Directors has approved and authorized the
execution of this First Amendment to Employment Agreement:
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. DEFINITIONS. All capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Employment
Agreement.
2. AMENDMENTS TO EMPLOYMENT AGREEMENT.
(a) The Employment Agreement is hereby amended by deleting the first
and second sentences of Section 2 of the Employment Agreement and inserting in
their place the following:
The term of this Agreement shall be the period from
the Effective Date to July 1, 2001. Beginning on July 1, 1999
and on each July 1 thereafter (each an "Extension Date"), 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 Employee in writing at
least 90 days prior to the Extension Date that the term of
this Agreement shall not be extended further, and PROVIDED
FURTHER THAT the Employee has not received an unsatisfactory
performance review by either the Board of Directors or the
board of directors of the Bank.
(b) The Employment Agreement is hereby amended by deleting Subsection
(c) of Section 7 of the Employment Agreement and inserting in its place the
following:
(c) CHANGE IN CONTROL; Tax Gross Up. In the event
that the Employee experiences an Involuntary Termination
within the 12 months preceding or the 24 months following a
Change in Control, in addition to the Company's obligations
under Section 7(a) of this Agreement, the Company shall pay to
the Employee in cash, within
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30 days after the later of the date of such Change in Control
or the Date of Termination, an amount equal to 299% of the
Employee's "base amount" as determined under Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code").
In the event that any payments or benefits provided
or to be provided to the Employee, whether pursuant to this
Agreement or 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 Adjusted Gross Up
Payment. The "Adjusted Gross Up Payment" shall be the amount
equal to the aggregate of (i) the excise tax payable by the
Employee pursuant to Section 4999 of the Code (the "Penalty
Tax") and (ii) 80% of the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Penalty Tax, utilizing the maximum effective
rate of tax of the Employee including federal, state, local
and medicare tax rates, over the Penalty Tax.
For purposes of determining the amount of the
Adjusted Gross Up Payment, the value of any non-cash benefits
and deferred payments or benefits subject to the Penalty Tax
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 Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to be less than the amount calculated in the determination of
the actual Adjusted Gross Up Payment made by the Company, the
Employee shall repay to the Company, at the time that such
reduction in the amount of Penalty Tax is finally determined,
the portion of the Adjusted 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 Adjusted Gross Up Payment to the date of
the repayment. The amount of the reduction of the Adjusted
Gross Up Payment shall reflect any subsequent reduction in the
Penalty Tax resulting from such repayment.
In the event that, after the Adjusted Gross Up
Payment is made, the amount of the Penalty Tax is determined
to exceed the amount anticipated at the time the Adjusted
Gross Up Payment was made, the Company shall pay to the
Employee, in immediately available funds, at the time that
such additional amount of Penalty Tax is finally determined,
an additional payment (the "Additional
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Gross Up Payment") equal to the aggregate of (i) such
additional amount of Penalty Tax (the "Additional Penalty
Tax"), (ii) 80% of the the excess of the tax gross up amount
that, on an after-tax basis, would fully reimburse the
Employee for the Additional Penalty Tax, utilizing the maximum
effective rate of tax of the Employee including federal,
state, local and medicare taxes, over the Additional Penalty
Tax and (iii) interest and penalties, if any, owed by the
Employee with respect to such Additional Penalty Tax and other
tax attributable to the Additional Gross Up Payment. The
Company shall have the right to challenge, on the Employee's
behalf, any Penalty Tax or Additional Penalty Tax assessment
against him as to which the Employee is entitled to (or would
be entitled if such assessment is finally determined to be
proper) an Adjusted 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 Employee and hold him harmless, on an
after-tax basis, from any Penalty Tax, Additional Penalty Tax
or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment costs and
expenses by the Company.
(c) The Employment Agreement is hereby amended by inserting the
following after Section 16 of the Employment Agreement:
17. DEFERRAL OF NON-DEDUCTIBLE COMPENSATION. In the
event that the Employee's aggregate compensation (including
compensatory benefits which are deemed remuneration for
purposes of Section 162(m) of the Code) from the Company and
the Consolidated Subsidiaries for any calendar year exceeds
the greater of (i) $1,000,000 or (ii) the maximum amount of
compensation deductible by the Company or any of the
Consolidated Subsidiaries in any calendar year under Section
162(m) of the Code (the "maximum allowable amount"), then any
such amount in excess of the maximum allowable amount shall be
mandatorily deferred with interest thereon at 8% per annum to
a calendar year such that the amount to be paid to the
Employee in such calendar year, including deferred amounts and
interest thereon, does not exceed the maximum allowable
amount. Subject to the foregoing, deferred amounts including
interest thereon shall be payable at the earliest time
permissible.
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IN WITNESS WHEREOF, the parties have executed this First Amendment to
Employment Agreement as of the day and year first written above.
Attest: Charter One Financial, Inc.
/s/ Xxxxxx X. Xxxx /s/ Xxxxxxx Xxxx Xxxx
------------------------- ----------------------------------
Xxxxxx X. Xxxx, Secretary By: Xxxxxxx Xxxx Xxxx
Its: Chairman, President and Chief
Executive Officer
Employee
/S/Xxxx X. Xxxx
---------------
Xxxx X. Xxxx
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