EXHIBIT 10.4(a)
Form of Special Termination Agreement as Amended.
[For new recipients]
SPECIAL TERMINATION AGREEMENT
This SPECIAL TERMINATION AGREEMENT dated as of ___________
(the "Agreement"), between Flushing Savings Bank, FSB, a savings bank organized
and existing under Federal law and having its executive offices at 000-00
Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Bank"), Flushing Financial
Corporation, a Delaware corporation having its executive offices at 000-00
Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Holding Company"), and
_________________, residing at _____________________________ (the "Employee").
WHEREAS, the Employee is employed by the Bank or one of its
subsidiaries in a management position; and
WHEREAS, the Bank desires to provide severance benefits to the
Employee in the event of a termination of employment following a Change of
Control (as defined below), all in accordance with the terms and provisions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants contained herein, the parties hereto agree as follows:
1. TERM.
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(a) The term of this Agreement (the "Term") shall
commence on the date hereof and shall continue through November 21, ______ (the
"Extension Date"), plus such extensions as are provided in paragraph (b) below.
(b) On or as of the Extension Date and each
anniversary thereof (collectively, the "Anniversary Dates"), the Term shall be
extended for one additional year if and only if the Board of Directors of the
Bank (the "Board") shall have authorized the extension of the Term prior to such
Anniversary Date. If the Board shall not have authorized the extension of the
Term prior to any Anniversary Date, then the Term shall not be extended pursuant
to this section 1(b) at any time thereafter and the Term shall end on such
Anniversary Date. Notwithstanding the foregoing, (i) the Term shall end upon the
termination of the Employee's employment with the Bank for any reason prior to a
Change of Control, and (ii) if a Change of Control occurs during the Term, the
Term shall be automatically extended such that the Term shall end on the second
anniversary of the Change of Control.
(c) Upon the expiration of the Term, all rights,
benefits and obligations of the parties hereto shall terminate, except for any
such rights, benefits and obligations that arose prior to or in connection with
such expiration and except as otherwise provided herein.
2. DEFINITIONS.
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(a) "Cause" means the Employee's intentional
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engagement in dishonest conduct, insubordination, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform duties,
or commission of an act which would constitute a felony.
(b) "Change of Control" means:
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(i) the acquisition of all or substantially
all of the assets of the Bank or the Holding Company by any
person or entity, or by any persons or entities acting in
concert;
(ii) the occurrence of any event if,
immediately following such event, a majority of the members of
the Board of Directors of the Bank or the Holding Company or
of any successor corporation shall consist of persons other
than Current Members (for these purposes, a "Current Member"
shall mean any member of the Board of Directors of the Bank or
the Holding Company as of November 21, 1995 and any successor
of a Current Member whose nomination or election has been
approved by a majority of the Current Members then on the
Board of Directors);
(iii) the acquisition of beneficial
ownership, directly or indirectly (as provided in Rule 13d-3
under the Securities Exchange Act of 1934 (the "Act"), or any
successor rule), of 25% or more of the total combined voting
power of all classes of stock of the Bank or the Holding
Company by any person or group deemed a person under Section
13(d)(3) of the Act; or
(iv) approval by the stockholders of the
Bank or the Holding Company of an agreement providing for the
merger or consolidation of the Bank or the Holding Company
with another corporation where the stockholders of the Bank or
the Holding Company, immediately prior to the merger or
consolidation, would not beneficially own, directly or
indirectly, immediately after the merger or consolidation,
shares entitling such stockholders to 50% or more of the total
combined voting power of all classes of stock of the surviving
corporation.
(c)"Disability" means termination under circumstances
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in which the Employee would qualify for disability benefits under one or more
disability programs maintained by the Holding Company or any subsidiary
(including the Bank) employing the Employee.
(d) "Good Reason" means:
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(i) a reduction by the Holding Company or
any subsidiary (including the Bank) in the Employee's annual
base salary as in effect immediately prior to a Change of
Control;
(ii) a change by the Holding Company or any
subsidiary (including the Bank) in the Employee's title (other
than a bona fide promotion) as in effect immediately prior to
a Change of Control;
(iii) the failure of the Holding Company or
any subsidiary (including the Bank) to maintain the Employee's
principal place of employment as in effect immediately prior
to a Change of Control; or
(iv) the failure of the Holding Company or
any subsidiary (including the Bank) to cure, within sixty days
following written notice thereof from the Employee, a material
adverse change in the Employee's functions, duties, or
responsibilities as in effect immediately prior to a Change of
Control.
3. SEVERANCE BENEFITS.
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In the event the Employee's employment with the Holding
Company or any of its subsidiaries (including the Bank) is terminated within two
years following a Change of Control (i) by the Holding Company or any of its
subsidiaries (including the Bank) other than by reason of the death or
Disability of the Employee and other than for Cause, or (ii) by the Employee for
Good Reason, the Bank shall provide and pay to the Employee the following:
(a) the Employee's earned but unpaid current salary
as of the date of termination, plus an amount representing any accrued
but unpaid vacation time;
(b) the benefits, if any, to which the Employee is
entitled as a former employee under the Holding Company's and
subsidiaries' (including the Bank's) employee benefit plans and
programs and compensation plans and programs;
(c) continued health and welfare benefits (including
group life, disability, medical and dental benefits), in addition to
that provided in paragraph (b) above, to the extent necessary to
provide coverage for the Employee for the number of months equal to the
number of months of salary payable to the Employee pursuant to
paragraph (d) below (the "Severance Period"). Such benefits shall be
provided through the purchase of insurance, and shall be equivalent to
the health and welfare benefits (including cost-sharing percentages)
provided to active employees of the Bank (or any successor thereof) as
from time to time in effect during the Severance Period. Where the
amount of such benefits is based on salary, they shall be provided to
the Employee based on the highest annual rate of salary achieved by the
Employee during the period of the Employee's employment with the Bank
or its subsidiaries. If the Employee had dependent coverage in effect
at the time of his termination of employment, the Employee shall have
the right to elect to continue such dependent coverage for the
Severance Period. The benefits to be provided under this paragraph (c)
shall cease to the extent that substantially equivalent benefits are
provided to the Employee (and/or his dependents) by a subsequent
employer of the Employee; and
(d) within thirty days following the Employee's
termination of employment, a cash lump sum payment in an amount equal
to one month's salary for each full year of continuous service
completed with the Holding Company or any of its subsidiaries
(including the Bank or any predecessor of the Bank), but in no event
less than 12 months' salary or more than 18 months' salary, such salary
to be the greater of the Employee's salary immediately prior to the
Change of Control or the Employee's salary at the date of such
termination.
Notwithstanding the foregoing, the benefits provided to the Employee under this
Section 3 shall be reduced if and to the extent that a nationally recognized
firm of compensation consultants or auditors designated by the Holding Company
or the Bank determines that such reduction will result in a greater net
after-tax benefit to the Employee than the Employee would obtain in the absence
of such reduction, taking into account any excise tax payable by the Employee
under Internal Revenue Code Section 4999.
4. NO EFFECT ON EMPLOYEE BENEFIT
PLANS OR COMPENSATION PROGRAMS.
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Except as expressly provided in this Agreement, the
termination of the Employee's employment during the Term or thereafter, whether
by the Holding Company or any of its subsidiaries (including the Bank) or by the
Employee, shall have no effect on the rights and obligations of the parties
hereto under the employee benefit plans or programs or compensation plans or
programs (whether or not employee benefit plans or programs) that the Holding
Company or any subsidiary (including the Bank) may maintain from time to time.
5. NO RIGHT TO EMPLOYMENT.
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Nothing in this Agreement shall be construed as giving the
Employee the right to be retained in the employment of the Holding Company or
any of its subsidiaries (including the Bank), nor shall it affect the right of
the Holding Company or any of its subsidiaries (including the Bank) to terminate
the Employee's employment with or without cause.
6. REGULATORY ACTION.
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(a) Notwithstanding any other provision of this
Agreement to the contrary, this Section 6 shall apply at all times, during the
Term of this Agreement.
(b) If the Employee is suspended and/or temporarily
prohibited from participating in the conduct of the affairs of the Bank by a
notice served under 12 U.S.C. ss. 1818(e)(3) and (g)(1), the Bank's obligations
to the Employee under this Agreement shall be suspended as of the date of such
service unless stayed by appropriate proceedings. If the charges in such notice
are dismissed, the Bank shall (i) pay the Employee all of the compensation
payable under this Agreement which was withheld while the Bank's obligations
under this Agreement were so suspended, and (ii) reinstate in whole any of its
obligations to the Employee which were suspended.
(c) If the Employee is removed and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under 12 U.S.C. ss. 1818(e)(4) or (g)(1), all obligations of the Bank to
the Employee under this Agreement shall terminate as of the effective date of
the order, other than vested rights of the parties accrued as of such effective
date, which shall not be affected.
(d) If the Bank is in default (as defined in section
3(x)(1) of the Federal Deposit Insurance Act), all obligations of the Bank under
this Agreement shall terminate as of the date of such default, but this Section
6(d) shall not affect any vested rights of the Employee accrued as of such date
of default.
(e) All obligations of the Bank under this Agreement
shall be terminated, except to the extent it is determined that continuation of
the Agreement is necessary to the continued operation of the Bank, (i) by the
Regional Director of the Office of Thrift Supervision or his or her designee
("Director") at the time the Federal Deposit Insurance Corporation or Resolution
Trust Corporation enters into an agreement to provide assistance to or on behalf
of the Bank under the authority contained in Section 13(c) of the Federal
Deposit Insurance Act; or (ii) by the Director at the time the Director approves
a supervisory merger to resolve problems related to operation of the Bank or
when the Bank is determined by the Director to be in an unsafe or unsound
condition; provided, however, that this Section 6(e) shall not affect any vested
rights of the Employee accrued as of such date of termination.
(f) Any payments made to the Employee pursuant to
this Agreement or otherwise are subject to and conditioned upon their compliance
with 12 X.X.X.xx. 1828(k) and any regulations promulgated thereunder.
7. MISCELLANEOUS PROVISIONS.
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(a) Successors. This Agreement shall inure to
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the benefit of and be binding upon the Employee and his legal representatives
and the Holding Company and the Bank, their successors and assigns, including
any successor by merger or consolidation or a statutory receiver or any other
person or firm or corporation to which all or substantially all of the assets
and business of the Holding Company or the Bank may be sold or otherwise
transferred.
(b) Waiver. The Waiver by any party of a breach
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of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach of this Agreement.
(c) Severability. The invalidity or unenforceability
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of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
(d) Headings and References. The headings of the
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sections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement. References to the masculine
gender shall be deemed to include the female gender.
(e) Entire Agreement. This Agreement constitutes
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the entire agreement and understanding of the parties with respect to the
matters contemplated herein, and supersedes all prior agreements, arrangements
and understandings related to the subject matter hereof.
(f) No Modification. This Agreement may not be
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modified other than by a writing signed by all the parties hereto.
(g) Governing Law. This Agreement shall be governed
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by the laws of the State of New York, without reference to conflicts of law
principles.
(h) Withholding. The Employee agrees that the Bank
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may withhold from any payment required to be made to the Employee pursuant to
this Agreement all federal, state, local and/or other taxes which the Bank
determines are required to be withheld in accordance with applicable statutes
and/or regulations in effect from time to time.
8. GUARANTEE.
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The Holding Company hereby agrees to guarantee the payment by
the Bank of any benefits and compensation to which the Employee is entitled
under this Agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement as
of the date and year first above written.
FLUSHING FINANCIAL CORPORATION
By:
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Xxxxxxx X. Xxxxxxx
President and C.E.O.
FLUSHING SAVINGS BANK, FSB
By:
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Xxxx X. Xxxxxxxxxx
Senior Vice President
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Employee: [name]
