EXHIBIT 10.10
FIDELITY BANK PaSB
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 30th day of March, 1998, to be effective
January 1, 1998, by and between FIDELITY BANCORP, INC., a Pennsylvania-chartered
bank holding company (the "Corporation"), FIDELITY BANK PaSB, a State Stock
Savings Bank located in Pittsburgh, Pennsylvania (the "Company") and XXXXXXX X.
XXXXXX (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words
and phrases shall have themeanings specified:
1.1.1 "Change of Control" means that the Executive has been
terminated within 12 months of a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act") or any successor thereto;
provided that, without limitations, such a change in control shall be
deemed to have occurred if (A) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
25% or more of the combined voting power of the Corporation's then
outstanding securities, or (B) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Board of Directors of the Corporation cease for any reason to
constitute at least a majority thereof, unless the election, or the
nomination for election by stockholders, of each director who was not a
director at the beginning of such period has been approved in advance
by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period.
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1.1.2 "Code" means the lnternal Revenue Code of l986, as
amended.
1.1.3 "Disability" means, if the Executive is covered by a
Company- sponsored disability policy, total disability as defined in
such policy without regard to any waiting period. If the Executive is
not covered by such a policy, Disability means the Executive suffering
a sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company. As
a condition to any benefits, the Company may require the Executive to
submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate.
1.1.4 "Early Retirement Age" means the later of the
Executive's 55th birthday or the Executive's age after completing
fifteen (15) Years of Service.
1.1.5 "Early Retirement Date" means the month, day and year in
which Early Retirement occurs.
1.1.6 "Early Termination" means the Termination of Employment
before Early Retirement Age for reasons other than death, Disability,
Termination for Cause or following a Change of Control.
1.1.7 "Early Termination Date" means the month, day and year
in which Early Termination occurs.
1.1.8 "Normal Retirement Age" means the Executive's 65th
birthday.
1.1.9 "Normal Retirement Date" means the later of the Normal
Retirement Age or Termination of Employment.
1.1.10 "Plan Year" means a twelve-month period commencing on
January 1 and ending on December 31 of each year. The initial Plan Year
shall commence on the effective date of this Agreement.
1.1.11 "Termination for Cause" See Section 5.2.
1.1.12 "Termination of Employment" means that the Executive
ceases to be employed by the Company for any reason whatsoever other
than by reason of a leave of absence which is approved by the Company.
For purposes of this Agreement, if there is a dispute over the
employment status of the Executive or the date of the Executive's
Termination of Employment, the Company shall have the sole and absolute
right to decide the dispute.
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1.1.13 "Year of Service" means each computation period of
twelve consecutive months during which the Executive is employed on a
full-time basis by the Company, inclusive of any approved leave of
absence. The initial computation period shall commence on the
Executive's date of employment and end twelve months thereafter.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. Upon Termination of Employment on or
after the Normal Retirement Age for reasons other than death, the Company shall
pay to the Executive the benefit described in this Section 2.1 in lieu of any
other benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this Section
2.1 is $75,000 (Seventy-five Thousand Dollars). The Company's Board of
Directors, in its sole discretion, may increase the benefit under this
Section 2.1.1; however, any increase shall require the recalculation of
Schedule A.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit to the Executive in 12 equal monthly installments payable on
the first day of each month commencing with the month following a
period of sixty (60) days after the Executive's Normal Retirement Date
and continuing for 179 additional months.
2.2 Early Retirement Benefit. Upon Early Retirement, the Company shall
pay to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is
the Early Retirement amount set forth in Schedule A for the Plan Year
ending immediately prior to the Early Retirement Date.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit to the Executive in 12 equal monthly installments payable on
the first day of each month commencing with the month following a
period of 60 days after said Termination of Employment and continuing
for 179 months.
2.3 Early Termination Benefit. If the Executive terminates employment
prior to Early Retirement Age, other than by reason of death or Disability, the
Executive will not be entitled to a benefit under this Agreement. However, the
Company's Board of Directors, in its sole discretion, may provide a benefit to
the Executive upon Early Termination.
2.4 Disability Benefit. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Company shall pay to the
Executive the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
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2.4.1 Amount of Benefit. The benefit under this Section 2.4 is
the Disability amount set forth in Schedule A for the Plan Year ending
immediately prior to the date in which Termination of Employment
occurs.
2.4.2 Payment of Benefit. The Company shall pay the benefit to
the Executive in a lump sum on the first day of the month following a
period of ninety (90) days after said Termination of Employment.
2.5 Change of Control Benefit. Upon a Change of Control, the Company
shall pay to the Executive the benefit described in this Section 2.5 in lieu of
any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5 is
the Change of Control amount set forth in Schedule A for the Plan Year
ending immediately prior to the date in which Termination of Employment
occurs.
2.5.2 Payment of Benefit. The Company shall pay the benefit to
the Executive in a lump sum on the first day of the month following a
period of sixty (60) days after said Termination of Employment.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the
active service of the Company, the Company shall pay to the Executive's
beneficiary the benefit described in this Section 3.1. This benefit
shall be paid in lieu of the Lifetime Benefits of Article 2.
3.1.1 Amount of Benefit. The annual benefit under this Section
3.1 is the Normal Retirement Benefit amount described in Section 2.1.1.
3.1.2 Payment of Benefit. The Company shall pay the annual
benefit to the beneficiary in 12 equal monthly installments payable on
the first day of each month commencing with the month following a
period of sixty (60) days after the Executive's death and continuing
for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after the
benefit payments have commenced under this Agreement but before receiving all
such payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
3.3 Death Following Termination of Employment But Before Benefits
Commence. If the Executive is entitled to benefits under this Agreement, but
dies prior to receiving said benefits, the
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Company shall pay to the Executive's beneficiary the same benefits, in the same
manner, they would have been paid to the Executive had the Executive survived;
however, said benefit payments will commence upon the Executive's death.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing a written designation with the Company. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incapacitated, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incapacitated person or incapable person. The Company may require proof
of incapacity, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would create an
excise tax under the excess parachute rules of Section 28OG of the Code.
5.2 Termination for Cause. If the Company terminates the Executive's
employment for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor
involving moral turpitude; or
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5.2.3 Fraud, disloyalty, dishonesty or willful violation of
any law or significant Company policy committed in connection
with the Executive's employment and resulting in an adverse
effect on the Company.
5.3 Competition After Termination of Employment. No benefits shall be
payable if the Executive, without the prior written consent of the Company,
engages in, becomes interested in, directly or indirectly, as a sole proprietor,
as a partner in a partnership, or as a substantial shareholder in a corporation,
or becomes associated with, in the capacity of employee, director, officer,
principal, agent, trustee or in any other capacity whatsoever, any enterprise
conducted in the trading area (a 50 mile radius) of the business of the Company,
which enterprise is, or may deemed to be, competitive with any business carried
on by the Company as of the date of the Executive's retirement or Termination of
Employment. This section shall not apply following a Change of Control.
5.4 Suicide or Misstatement. No benefits shall be payable if the
Executive commits suicide within two years after the date of this Agreement, or
if the Executive has made any material misstatement of fact on any application
for life insurance purchased by the Company. In addition to and not as
limitation of the preceding, should the Company acquire a policy of insurance
for the purpose of protecting the Company as to the financial risks incident to
it entering into the Salary Continuation Agreement and the Executive has
knowledge of such fact, no benefit shall be payable to the Executive hereunder
in an amount that would exceed the amount provided by the policy of insurance as
a result of the event that would cause benefits to be payable hereunder.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify any person or entity
that makes a claim against the Agreement (the "Claimant") in writing, within
ninety (90) days of Claimant's written application for benefits, of Claimant's
eligibility or ineligibility for benefits under the Agreement. If the Company
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the Claimant
to perfect Claimant's claim and a description of why it is needed, and (4) an
explanation of the Agreement's claim review procedure and other appropriate
information as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Company determines that there are special circumstances
requiring additional time to make a decision, the Company shall notify the
Claimant of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to an additional ninety-day
period.
6.2 Review Procedure. If the Claimant is determined by the Company not
to be eligible for benefits, or if the Claimant believes that Claimant is
entitled to greater or different benefits, the
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Claimant shall have the opportunity to have such claim reviewed by the Company
by filing a petition for review with the Company within sixty (60) days after
receipt of the notice issued by the Company. Said petition shall state the
specific reasons which the Claimant believes entitle Claimant to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the
Company of the petition, the Company shall afford the Claimant (and counsel, if
any) an opportunity to present Claimant's position to the Company orally or in
writing, and the Claimant (or counsel) shall have the right to review the
pertinent documents. The Company shall notify the Claimant of its decision in
writing within the sixty-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty-day period is not sufficient, the
decision may be deferred for up to another sixty-day period at the election of
the Company, but notice of this deferral shall be given to the Claimant.
6.3 Claims for Benefits Conditioned on the Payment Insurance. Should
the Executive or the Executive's beneficiary be denied a benefit hereunder due
to operation of paragraph 5.4 hereof based upon refusal of an insurance company
to make payment under a policy owned and benefiting the Company, the Company
will either allow the Executive or the Executive's beneficiary to join in any
claim or action commenced by the Company under the Policy or take such action as
may be required that would permit the Executive or the Executive's beneficiary
to contest the refusal of the Insurance Company to make payment.
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, successors,
administrators and transferees.
8.2 No Guarantee of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's right to
discharge the Executive. It also does not require the Executive to remain an
employee nor interfere with the Executive's right to terminate employment at any
time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
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8.4 Reorganization. The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
8.5 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.6 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the Commonwealth of Pennsylvania, except to the extent
preempted by the laws of the United States of America.
8.7 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
8.8 Recovery of Estate Taxes. If the Executive's gross estate for
federal estate tax purposes includes any amount determined by reference to and
on account of this Agreement, and if the beneficiary is other than the
Executive's estate, then the Executive's estate shall be entitled to recover
from the beneficiary receiving such benefit under the terms of the Agreement, an
amount by which the total estate tax due by the Executive's estate, exceeds the
total estate tax which would have been payable if the value of such benefit had
not been included in the Executive's gross estate. If there is more than one
person receiving such benefit, the right of recovery shall be against each such
person. In the event the beneficiary has a liability hereunder, the beneficiary
may petition the Company for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.
8.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
8.10 Administration. The Company shall have powers which are necessary
to administer this Agreement, including but not limited to:
8.10.1 Interpreting the provisions of the Agreement;
8.10.2 Establishing and revising the method of accounting for
the Agreement;
8.10.3 Maintaining a record of benefit payments; and
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8.10.4 Establishing rules and prescribing any forms necessary
or desirable to administer the Agreement.
8.11 Designated Fiduciary. For purposes of the Employee Retirement
Income Security Act of 1974, if applicable, the Company shall be the named
fiduciary and plan administrator under the Agreement. The named fiduciary may
delegate to others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement.
EXECUTIVE: CORPORATION:
FIDELITY BANCORP, INC.
/s/Xxxxxxx X. Xxxxxx By /s/Xxxxxxx X. Xxxxxxxx
-------------------- ----------------------
Xxxxxxx X. Xxxxxx Title President
COMPANY:
FIDELITY BANK PaSB
By /s/Xxxxxxx X. Xxxxxxxx
----------------------
Title President
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