ADDENDUM TO
EMPLOYMENT AGREEMENT
BY AND BETWEEN
ATLANTIC LIBERTY FINANCIAL CORP.
AND
XXXXX X. XXXXXXX
This Addendum (the "Addendum") to that certain employment agreement (the
"Company Employment Agreement") by and between Atlantic Liberty Financial Corp.,
a Delaware corporation (the "Company"), with its principal administrative office
at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000-0000, and Xxxxx X. Xxxxxxx
("Executive") is made effective as of this 20th day of December, 2005.
WHEREAS, Executive is currently employed as President and Chief Executive
Officer of the Company, which owns 100% of the common stock of Atlantic Liberty
Savings, F.A., a federal stock savings association (the "Association"); and
WHEREAS, new Section 409A of the Internal Revenue Code of 1986, as amended
("Code"), which is initially effective in 2005, has deemed certain employment
agreements to be deferred compensation, subject to its provisions; and
WHEREAS, the Company and Executive desire to update the Company Employment
Agreement to conform to the provisions and requirements of Code Section 409A.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the Company and Executive hereby agree to
the following amendments to the Company Employment Agreement, it being
understood and agreed that except to the amendments specifically provided for
herein, the remaining terms of the Company Employment Agreement shall remain in
full force and effect:
1. Section 6 of the Company Employment Agreement is hereby renamed:
"PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION OR CHANGE IN CONTROL."
2. Section 6(a)(iii) of the Company Employment Agreement is hereby replaced
in its entirety with the following:
"(iii) Upon the occurrence of an Event of Termination, as defined in
Section 6(a)(i) or (ii), on the Date of Termination, as
defined in Section 9(b), the Company shall pay Executive, or,
in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, a sum equal to three (3)
times the sum of (x) the average annual rate of Base Salary
paid in the last three (3) years ending in the year of
termination and (y) the average rate of bonus awarded to
Executive during the prior three years. Payment of the amount
required hereunder shall be made on the first day of the
seventh
month following Executive's Separation from Service if
Executive is a Specified Employee and such delay is required
by Code Section 409A. For these purposes, the terms `Specified
Employee' and `Separation from Service' shall have the meaning
required by Code Section 409A. Such payments shall not be
reduced in the event Executive obtains other employment
following termination of employment."
3. Section 6(b) of the Company Employment Agreement is hereby replaced in
its entirety with the following:
"(b) The provisions of Section 6(b) shall apply upon the occurrence of a
Change in Control during the term of this Agreement. In the event of a Change in
Control of the Association or Company, Executive shall be entitled to a sum
equal to three (3) times the sum of (x) the highest annual rate of Base Salary
and (y) the highest annual bonus awarded to Executive during the prior three
years. Payment of the amount required hereunder shall be made on the effective
date of the Change in Control. Notwithstanding anything to the contrary herein,
only if required by Code Section 409A, if the Executive is a "Specified
Employee" within the meaning of Code Section 409A, the payment required
hereunder shall be made no earlier than the first day of the seventh month
following Executive's Separation from Service, as defined in Code Section 409A.
For the purposes of this Agreement, a Change in Control of the Company or the
Association shall mean a change in ownership of the Company or the Association
under paragraph (i) below, a change in effective control of the Company or the
Association under paragraph (ii) below, or a change in the ownership of a
substantial portion of the assets of the Company or the Association under
paragraph (iii) below:
(i) Change in the ownership of the Company or the Association. A
change in the ownership of the Company or the Association
shall occur on the date that any one person, or more than one
person acting as a group (as defined in Proposed Treasury
Regulation Section 1.409A-3(g)(5)(v)(B) or subsequent
guidance), acquires ownership of stock of the corporation
that, together with stock held by such person or group,
constitutes more than 50 percent of the total fair market
value or total voting power of the stock of such corporation.
(ii) Change in the effective control of the Company or the
Association. A change in the effective control of the Company
or the Association shall occur on the date that either (i) any
one person, or more than one person acting as a group (as
defined in Proposed Treasury Regulation Section
1.409A-3(g)(5)(v)(B) or subsequent guidance), acquires (or has
acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership
of stock of the corporation possessing 35 percent or more of
the total voting power of the stock of such corporation; or
(ii) a majority of members of the corporation's Board of
Directors is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of
the members of the corporation's Board of Directors prior to
the date of the appointment or election, provided that this
sub-section (ii) is inapplicable where a majority shareholder
of the Company or the Association is another corporation.
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(iii) Change in the ownership of a substantial portion of the
Company's or the Association's assets. A change in the
ownership of a substantial portion of the Company or the
Association's assets shall occur on the date that any one
person, or more than one person acting as a group (as defined
in Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B)
or subsequent guidance), acquires (or has acquired during the
12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the
corporation that have a total gross fair market value equal to
or more than 40 percent of the total gross fair market value
of (i) all of the assets of the Company or the Association, or
(ii) the value of the assets being disposed of, either of
which is determined without regard to any liabilities
associated with such assets.
(iv) For all purposes hereunder, the definition of Change in
Control shall be construed to be consistent with the
requirements of Proposed Treasury Regulation Section
1.409A-3(g) or subsequent guidance."
4. Section 6(c) of the Company Employment Agreement shall be replaced in
its entirety with the following:
"(c) Upon the occurrence of an Event of Termination under Section 6(a) or a
Change in Control under Section 6(b), the Company and/or its subsidiaries will
cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Company and/or the
Association for Executive prior to such event or Change in Control. Such
coverage, or in lieu thereof, a payment of not less than $12,000 per annum,
shall continue until thirty-six (36) months following Executive's termination of
employment."
5. Section 6(d) of the Company Employment Agreement shall be amended by
replacing the introductory clause "Upon the occurrence of an
Event of Termination," with the following clause:
"Upon the occurrence of an Event of Termination or a Change in Control,"
6. Sections 6(e) and 6(f) of the Company Employment Agreement shall be
amended by replacing the introductory clause "Upon the occurrence of an
Event of Termination, within sixty (60) days (or within such shorter
period to the extent that information can reasonably be obtained)
following Executive's termination of employment with the Company,"
with the following clause:
"Upon the occurrence of an Event of Termination or a Change in Control,
within sixty (60) days (or within such shorter period to the extent that
information can reasonably be obtained) of the event which triggers a
distribution hereunder,"
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7. A new Section 6(h) shall be added to the Company Employment Agreement
which shall read as follows:
"(h) Payments made under Section 6(b) above shall be made irrespective of
whether termination of employment has occurred. Notwithstanding anything herein
to the contrary, Executive shall only be entitled to a payment under the first
to occur of an Event of Termination under Section 6(a), or a Change in Control
under Section 6(b). Payments under one of these alternatives shall preclude
payments under the other."
8. Section 10 of the Company Employment Agreement is hereby renamed:
"POST-PAYMENT OBLIGATIONS."
IN WITNESS WHEREOF, the Company has caused this Addendum to be executed on
its behalf by its duly authorized officers, and Executive has set his hand as of
the date first written above.
EXECUTIVE
Dated: December 20, 2005 By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
ATLANTIC LIBERTY FINANCIAL CORP.
Dated: December 20, 2005 By: /s/ Xxxxxxx X. Xxxxxxxxx
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