EMPLOYMENT AGREEMENT
Exhibit
10.5
This
Agreement is made effective as of the 1st day of January 2008, by and between
Brooklyn Federal Savings Bank (the “Bank”), a federally chartered stock savings
bank, with its principal administrative office at 00 Xxxxx Xxxxxx, Xxxxxxxx,
Xxx
Xxxx 00000, Brooklyn Federal Bancorp, Inc. (the “Company”), a federal mid-tier
stock holding company, with its principal administrative office at 00 Xxxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, and Xxxxx Xxxxxxx (“Executive”).
WHEREAS,
Executive has been
employed as the Vice President and Controller of the Bank since 2005, and
was
appointed Vice President and Chief Financial Officer of the Bank and Vice
President and Chief Financial Officer of the Company effective as of January
1,
2008; and
WHEREAS,
Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) provides that certain
severance payments and other benefits to Executive hereunder must comply
with
its terms and the Treasury regulations promulgated thereunder (the “Treasury
Regulations”), or subject the Executive to additional taxes and penalties;
and
WHEREAS,
the Bank and the
Company desire to assure the continued services of Executive pursuant to
the
terms of this Agreement.
NOW,
THEREFORE, in
consideration of the mutual covenants herein contained, and upon the other
terms
and conditions hereinafter provided, the parties hereby agree as follows:
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1.
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POSITION
AND RESPONSIBILITIES
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During
the period of his employment hereunder, Executive agrees to serve as Vice
President and Chief Financial Officer of the Bank and Vice President and
Chief
Financial Officer of the Company. During said period, Executive also
agrees to serve, if elected, as an officer and director of any subsidiary
or
affiliate of the Bank or the Company.
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2.
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TERMS
AND DUTIES
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(a) The
term
of this Agreement and the period of Executive’s employment hereunder shall begin
as of the date first above written and shall continue for twenty-four (24)
full
calendar months thereafter. Commencing on January 1, 2009 and
continuing on January 1st
of each
year thereafter (the “Anniversary Date”), this Agreement shall renew for an
additional year such that the remaining term shall be two (2) years unless
written notice of non-renewal (“Non-Renewal Notice”) is provided to Executive at
least thirty (30) days and not more than sixty (60) days prior to any such
Anniversary Date, that this Agreement shall terminate at the end of twenty-four
(24) months following such Anniversary Date. Prior to each notice
period for non-renewal, the disinterested members of the Board of Directors
of
the Bank (“Board”) will conduct a comprehensive performance evaluation and
review of Executive for purposes of determining whether to extend the Agreement,
and the results thereof shall be included in the minutes of the Board’s
meeting.
(b)
During
the period of his employment hereunder, except for periods of absence occasioned
by illness, reasonable vacation periods, and reasonable leaves of absence,
Executive shall faithfully perform his duties hereunder including activities
and
services related to the organization, operation and management of the
Bank.
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3.
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COMPENSATION
AND REIMBURSEMENT
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(a)
The
compensation specified under this Agreement shall constitute the salary and
benefits paid for the duties described in Section 2(b). The
Bank shall pay Executive as compensation a salary of not less than $150,000
per
year (“Base Salary”). Such Base Salary shall be payable
bi-weekly. During the period of this Agreement, Executive’s Base
Salary shall be reviewed at least annually. The first such salary
review will be made no later than December 15 of each year during the term
of
this Agreement and any increase in Base Salary shall be effective from the
Anniversary Date immediately following such review through the end of the
calendar year. Such review shall be conducted by a Committee
designated by the Board, and the Board may increase, but not decrease,
Executive’s Base Salary (any increase in Base Salary shall become the “Base
Salary” for purposes of this Agreement). In addition to the Base
Salary provided in this Section 3(a),
the Bank shall
provide Executive at no cost to Executive with all such other benefits as
are
provided uniformly to permanent full-time employees of the Bank.
(b)
The Bank
will provide Executive with employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or
otherwise deriving benefit from immediately prior to the beginning of the
term
of this Agreement, and the Bank will not, without Executive’s prior written
consent, make any changes in such plans, arrangements or perquisites which
would
adversely affect Executive’s rights or benefits thereunder. Without
limiting the generality of the foregoing provisions of this Section 3(b),
Executive will be
entitled to participate in or receive benefits under any employee benefit
plans
including but not limited to, retirement plans, supplemental retirement plans,
pension plans, profit-sharing plans, health-and-accident plans, medical coverage
or any other employee benefit plan or arrangement made available by the Bank
in
the future to its senior executives and key management employees, subject
to and
on a basis consistent with the terms, conditions and overall administration
of
such plans and arrangements. Executive will be entitled to incentive
compensation and bonuses as provided in any plan of the Bank in which Executive
is eligible to participate (and he shall be entitled to a pro rata distribution
under any incentive compensation or bonus plan as to any year in which a
termination of employment occurs, other than Termination for
Cause). Nothing paid to Executive under any such plan or arrangement
will be deemed to be in lieu of other compensation to which Executive is
entitled under this Agreement.
(c) In
addition to the Base Salary provided for by Paragraph (a)
of this Section 3,
the Bank shall pay or reimburse Executive for all reasonable travel and other
reasonable expenses incurred by Executive in performing his obligations under
this Agreement and may provide such additional compensation in such form
and
such amounts as the Board may from time to time determine.
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4.
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OUTSIDE
ACTIVITIES
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Executive
may serve as a member of the board of directors of business, community and
charitable organizations subject to the approval of the Board, provided that
in
each case such service shall not materially interfere with the performance
of
his duties under this Agreement or present any conflict of
interest. Such service to and participation in outside organizations
shall be presumed for these purposes to be for the benefit of the Bank, and
the
Bank shall reimburse Executive his reasonable expenses associated
therewith.
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5.
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WORKING
FACILITIES AND EXPENSES
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Executive’s
principal place of employment shall be at the Bank’s principal executive
offices. The Bank shall provide Executive, at his principal place of
employment, with a private office, stenographic services and other support
services and facilities suitable to his position with the Bank and necessary
or
appropriate in connection with the performance of his duties under this
Agreement. During the term of this Agreement, the Bank shall provide
Executive with an automobile allowance in the amount of Five Hundred Dollars
($500.00) per month as reimbursement to the Executive of the business use
of his
personal automobile. The Bank shall reimburse Executive for his
ordinary and necessary business expenses incurred in connection with the
performance of his duties under this Agreement, including, without limitation,
fees for memberships in such clubs and organizations that Executive and the
Board mutually agree are necessary and appropriate to further the business
of
the Bank, and travel and reasonable entertainment
expenses. Reimbursement of such expenses shall be made upon
presentation to the Bank of an itemized account of the expenses in such form
as
the Bank may reasonably require.
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6.
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PAYMENTS
TO EXECUTIVE UPON AN EVENT OF
TERMINATION
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(a)
The
provisions of this Section 6
shall apply upon the occurrence of an Event of Termination (as herein defined)
during Executive’s term of employment under this Agreement. As used
in this Agreement, an “Event of Termination” shall mean and include any one or
more of the following:
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(i)
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the
involuntary termination by the Bank or the Company of Executive’s
full-time employment hereunder for any reason other than (A) Disability
or
Retirement, as defined in Section 7
below, or (B) Termination for Cause as defined in Section 8
hereof, provided that such termination of employment constitutes
a
“Separation from Service” within the meaning of Section 6(e) hereof;
or
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(ii)
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Executive’s
resignation from the Bank’s employ, upon
any
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(A)
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failure
to elect or reelect or to appoint or reappoint Executive as Vice
President
and Chief Financial Officer,
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(B)
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material
change in Executive’s function, duties, or responsibilities, which change
would cause Executive’s position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described
in
Section 1,
above,
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(C)
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liquidation
or dissolution of the Bank or Company other than liquidations or
dissolutions that are caused by reorganizations that do not affect
the
status of Executive,
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(D)
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reduction
in Executive’s annual compensation or benefits or relocation of
Executive’s principal place of employment by more than 25 miles from its
location as of the date of this Agreement,
or
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(E)
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material
breach of this Agreement by the Bank or the
Company.
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Upon
the
occurrence of any event described in clauses (ii) (A), (B), (C), (D) or
(E), above, Executive shall have the right to elect to terminate his employment
under this Agreement by resignation upon sixty (60) days prior written notice
given within a reasonable period of time not to exceed ninety (90) days after
the initial event giving rise to said right to elect. The Bank shall
have thirty (30) days to cure the conditions giving rise to the Event of
Termination, provided that the Bank may elect to waive such 30 day
period. Notwithstanding the preceding sentence, in the event of a
continuing breach of this Agreement by the Bank, Executive, after giving
due
notice within the prescribed time frame of an initial event specified above,
shall not waive any of his rights solely under this Agreement and this
Section 6
by virtue of the fact that Executive has submitted his resignation but has
remained in the employment of the Bank and is engaged in good faith discussions
to resolve any occurrence of an event described in clauses (A), (B), (C),
(D) or
(E) above.
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(iii)
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(A) Executive’s
involuntary termination by the Bank or the Company on the effective
date
of, or at any time following, a Change in Control, or (B) Executive’s
resignation from employment with the Bank or the Company following
a
Change in Control as a result of the Bank’s or the Company’s (or any
successor thereto) failure to renew or extend this Agreement, or
(C) Executive’s resignation from employment with the Bank or the
Company (or any successor thereto) following a Change in Control
as a
result of any event described in Section 6(a)(ii)(A),
(B), (C),
(D) or (E) above. For these purposes, a Change in Control of
the Bank or the Company shall mean a change in control of a nature
that:
(i) would be required to be reported in response to Item 5.01 of
the
current report on Form 8-K, as in effect on the date hereof, pursuant
to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
“Exchange Act”); or (ii) results in a Change in Control of the Bank or the
Company within the meaning of the Home Owners’ Loan Act, as amended, and
applicable rules and regulations promulgated thereunder (collectively,
the
“HOLA”) as in effect at the time of the Change in Control; or (iii)
without limitation such a Change in Control shall be deemed to
have
occurred at such time as (a) any “person” (as the 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 Company representing 25% or more of the combined
voting power of Company’s outstanding securities, except for any
securities purchased by the Bank’s employee stock ownership plan or trust;
or (b) individuals who constitute the Board on the date hereof (the
“Incumbent Board”) cease for any reason to constitute at least a majority
thereof, provided
that any person becoming a director subsequent to the date hereof
whose
election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for
election
by the Company’s stockholders was approved by the same Nominating
Committee serving under an Incumbent Board, shall be, for purposes
of this
clause (b), considered as though he were a member of the Incumbent
Board; or (c) a plan of reorganization, merger, consolidation,
sale of all
or substantially all the assets of the Bank or the Company or similar
transaction in which the Bank or Company is not the surviving institution
occurs or is effected; or (d) a tender offer is made for 25% or more
of the voting securities of the Company and the shareholders owning
beneficially or of record 25% or more of the outstanding securities
of the
Company have tendered or offered to sell their shares pursuant
to such
tender offer and such tendered shares have been accepted by the
tender
offeror. Notwithstanding anything in this subsection to the
contrary, a Change in Control shall not be deemed to have occurred
upon
the conversion of the Company’s mutual holding company parent to stock
form, or in connection with any reorganization used to effect such
a
conversion.
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(b)
Upon the
occurrence of an Event of Termination, on the Date of Termination, as defined
in
Section 9(b), the Bank 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 two (2) times
the
sum of (i) Base Salary and (ii) the highest rate of bonus awarded to
Executive during the prior three years.
(c) Upon
the
occurrence of an Event of Termination, the Bank will cause to be continued
life,
and non-taxable medical, dental and disability coverage substantially identical
to the coverage maintained by the Bank for Executive prior to his
termination. Such coverage shall continue for twenty-four (24) months
from the Date of Termination.
(d)
Upon the
occurrence of an Event of Termination, on the Date of Termination, as defined
in
Section 9(b), the Bank shall pay Executive a lump sum payment in an amount
equal
to the present value of the Bank’s contributions that would have been made on
his behalf under each of the Bank’s (i) 401(k) Plan, (ii) money purchase
pension plan, and (iii) employee stock ownership plan (and any other defined
contribution plan maintained by the Bank) as if Executive had continued working
for the Bank for a twenty-four (24) month period following his termination
earning the Base Salary that would have been achieved during the remaining
unexpired term of this Agreement (assuming, if a Change in Control has occurred,
that the annual Base Salary increases under Section 3(a)
would apply and, additionally, that such payment would continue for the
remaining unexpired term of this Agreement) and making the maximum amount
of
employee contributions permitted, if any, under such plan or plans, where
such
present values are to be determined using a discount rate of 6%.
(e) For
purposes of this Agreement, a “Separation from Service” shall have occurred if
the Bank and Executive reasonably anticipate that no further services will
be
performed by the Executive after the date of the Event of Termination (whether
as an employee or as an independent contractor) or the level of further services
performed will not exceed 49% of the average level of bona fide services
in the
36 months immediately preceding the Event of Termination. For all
purposes hereunder, the definition of “Separation from Service” shall be
interpreted consistent with Treasury Regulation Section
1.409A-1(h)(ii). If Executive is a Specified Employee, as defined in
Code Section 409A and any payment to be made under subparagraph (b) or (d)
of
this Section 6 shall be determined to be subject to Code Section 409A, then
if
required by Code Section 409A, such payment or a portion of such payment
(to the
minimum extent possible) shall be delayed and shall be paid on the first
day of
the seventh month following Executive’s Separation from Service.
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(f) Notwithstanding
the preceding paragraphs of this Section, in the event that the aggregate
payments or benefits to be made or afforded to Executive under said paragraphs
(the “Termination Benefits”) would be deemed to include an “excess parachute
payment” under Section 280G of the Code or any successor thereto, then such
Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”),
the value of which is one dollar ($1.00) less than an amount equal to the
total
amount of payments permissible under Section 280G of the Code or any successor
thereto.
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7.
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TERMINATION
UPON RETIREMENT, DISABILITY OR
DEATH
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For
purposes of this Agreement, termination by the Bank of Executive’s employment
based on “Retirement” shall mean termination of Executive’s employment by the
Board of the Bank and the Board of Directors of the Company upon Executive’s
attainment of age 65, or such later date as determined by the Board of Directors
of the Bank. Upon termination of Executive’s employment because of
Retirement, Executive shall be entitled to all benefits under any retirement
plan of the Bank and other plans to which Executive is a party, but Executive
shall not be entitled to the Termination Benefits specified in Section 6(b)
through 6(d)
hereof.
Termination
of Executive’s employment based on “Disability” shall be construed to comply
with Code Section 409A and shall be deemed to have occurred if: (i) Executive
is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result
in
death, or last for a continuous period of not less than 12 months; (ii) by
reason of any medically determinable physical or mental impairment that can
be
expected to result in death, or last for a continuous period of not less
than 12
months, Executive is receiving income replacement benefits for a period of
not
less than three months under an accident and health plan covering employees
of
the Bank or the Company; or (iii) Executive is determined to be totally disabled
by the Social Security Administration. In the event of Executive’s
Disability, the Bank shall continue to be obligated to pay Executive his
Base
Salary for the remaining term of the Agreement, or one year, whichever is
the
longer period of time, and provided further that any amounts actually paid
to
Executive pursuant to any disability insurance or other similar such program
which the Bank has provided or may provide on behalf of its employees or
pursuant to any xxxxxxx’x or social security disability program shall reduce the
compensation to be paid to Executive pursuant to this
paragraph. Disability payments hereunder shall commence within thirty
(30) days of the Disability determination.
In
the
event of Executive’s death during the term of the Agreement, his estate, legal
representatives or named beneficiaries (as directed by Executive in writing)
shall be paid Executive’s Base Salary as defined in Paragraph 3(a)
at the rate in effect at the time Executive’s death for a period of one (1) year
from the date of Executive’s death, and the Bank will continue to provide
medical, dental, family and other benefits normally provided to Executive’s
family for one (1) year after Executive’s death.
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8.
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TERMINATION
FOR CAUSE
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The
term
“Termination for Cause” shall mean termination because of Executive’s personal
dishonesty, incompetence, willful misconduct, any breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful
violation of any law, rule, or regulation (other than minor traffic violations
or similar offenses) or final cease-and-desist order, or material breach
of any
provision of this Agreement. In determining incompetence, the acts or
omissions shall be measured against standards generally prevailing in the
savings institutions industry. Executive shall not have the right to
receive compensation or other benefits for any period after Termination for
Cause. Any stock options granted to Executive under any stock option
plan of the Bank, the Company or any subsidiary or affiliate thereof, shall
become null and void effective upon Executive’s receipt of Notice of Termination
for Cause pursuant to Section 9
hereof, and shall not be exercisable by Executive at any time subsequent
to such
Termination for Cause. Any unvested stock awards granted to Executive
under any stock incentive plan of the Bank or the Company shall be
forfeited.
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9.
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NOTICE
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(a) Any
termination by the Bank or by Executive shall be communicated by Notice of
Termination to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon
and
shall set forth in reasonable detail the facts and circumstances claimed
to
provide a basis for termination of Executive’s employment under the provision so
indicated.
(b) “Date
of
Termination” shall mean (A) if Executive’s employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided
that he shall not have returned to the performance of his duties on a full-time
basis during such thirty (30) day period), and (B) if his employment is
terminated for any other reason, the date specified in the Notice of
Termination.
(c) If
the
party receiving a Notice of Termination desires to dispute or contest the
basis
or reasons for termination, the party receiving the Notice of Termination
must
notify the other party within thirty (30) days after receiving the Notice
of
Termination that such a dispute exists, and shall pursue the resolution of
such
dispute in good faith and with reasonable diligence pursuant to Section 20
of this Agreement. During the pendency of any such dispute, neither
the Company nor the Bank shall be obligated to pay Executive compensation
or
other payments beyond the Date of Termination. Any amounts paid to
Executive upon resolution of such dispute under this Section shall be offset
against or reduce any other amounts due under this Agreement.
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10.
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POST-TERMINATION
OBLIGATIONS
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(a) All
payments and benefits to Executive under this Agreement shall be subject
to
Executive’s compliance with paragraph (b) of this Section during the term of
this Agreement and for one (1) full year after the expiration or termination
hereof.
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(b) Executive
shall, upon reasonable notice, furnish such information and assistance to
the
Bank as may reasonably be required by the Bank in connection with any litigation
in which it or any of its subsidiaries or affiliates is, or may become, a
party.
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11.
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NON-COMPETITION
AND NON-SOLICITATION OBLIGATIONS
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(a)
Upon any
termination of Executive’s employment hereunder as a result of which the Bank is
paying Executive benefits under Section 6
of this Agreement, other than a termination in connection with a Change in
Control, Executive agrees not to compete with the Bank and/or the Company
for a
period of one (1) year following such termination within twenty-five (25)
miles of any existing branch of the Bank or any subsidiary of the Company
or
within twenty-five (25) miles of any office for which the Bank, the Company
or a
Bank subsidiary of the Company has filed an application for
regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board. Executive agrees that during such period
and within said area, cities, towns and counties, Executive shall not work
for
or advise, consult or otherwise serve with, directly or indirectly, any entity
whose business materially competes with the depository, lending or other
business activities of the Bank and/or the Company. The parties
hereto, recognizing that irreparable injury will result to the Bank and/or
the
Company, its business and property in the event of Executive’s breach of this
Subsection 11(a)
agree that in the
event of any such breach by Executive, the Bank and/or the Company will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive’s partners,
agents, servants, employers, employees and all persons acting for or with
Executive. Executive represents and admits that Executive’s
experience and capabilities are such that Executive can obtain employment
in a
business engaged in other lines and/or of a different nature than the Bank
and/or the Company, and that the enforcement of a remedy by way of injunction
will not prevent Executive from earning a livelihood. Nothing herein
will be construed as prohibiting the Bank and/or the Company from pursuing
any
other remedies available to the Bank and/or the Company for such breach or
threatened breach, including the recovery of damages from
Executive.
(b) Upon
any
termination of Executive’s employment hereunder as a result of which the Bank is
paying Executive benefits under Section 6
of this Agreement, other than a termination in connection with a Change in
Control, Executive hereby covenants and agrees that, for a period of one
(1)
year following his termination of employment with the Bank, he shall not,
without the written consent of the Bank, either directly or
indirectly:
(i)
solicit, offer employment to, or take any other action intended (or that
a
reasonable person acting in like circumstances would expect) to have the
effect
of causing any officer or employee of the Bank or the Company, or any of
their
respective subsidiaries or affiliates, to terminate his employment and accept
employment or become affiliated with, or provide services for compensation
in
any capacity whatsoever to, any business whatsoever that competes with the
business of the Bank or the Company, or any of their direct or indirect
subsidiaries or affiliates or has headquarters or offices within twenty-five
(25) miles of the locations in which the Bank or the Company has business
operations or has filed an application for regulatory approval to establish
an
office; or
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(ii)
solicit, provide any information, advice or recommendation or take any other
action intended (or that a reasonable person acting in like circumstances
would
expect) to have the effect of causing any customer of the Bank to terminate
an
existing business or commercial relationship with the Bank.
(c) Executive
recognizes and acknowledges that the knowledge of the business activities
and
plans for business activities of the Bank and affiliates thereof, as it may
exist from time to time, is a valuable, special and unique asset of the business
of the Bank. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or considered
business activities of the Bank or affiliates thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever (except
for
such disclosure as may be required to be provided to any federal banking
agency
with jurisdiction over the Bank or Executive). Notwithstanding the
foregoing, Executive may disclose any knowledge of banking, financial and/or
economic principles, concepts or ideas which are not solely and exclusively
derived from the business plans and activities of the Bank, and Executive
may
disclose any information regarding the Bank or the Company which is otherwise
publicly available. In the event of a breach or threatened breach by
Executive of the provisions of this Section, the Bank will be entitled to
an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities
of the
Bank or affiliates thereof, or from rendering any services to any person,
firm,
corporation, other entity to whom such knowledge, in whole or in part, has
been
disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Bank from pursuing any other remedies available
to
the Bank for such breach or threatened breach, including the recovery of
damages
from Executive.
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12.
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SOURCE
OF PAYMENTS
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(a) All
payments provided in this Agreement shall be timely paid in cash or check
from
the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive
and, if such amounts and benefits due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided
by the
Company.
(b)
Notwithstanding any provision herein to the contrary, to the extent that
payments and benefits, as provided by this Agreement, are paid to or received
by
Executive under an employment agreement with the Company, if any, such payments
and benefits paid by the Company will be subtracted from any amounts due
simultaneously to Executive under similar provisions of this Agreement. Payments
pursuant to this Agreement and a Company employment agreement, if any, shall
be
allocated in proportion to the level of activity and the time expended on
such
activities by Executive as determined by the Company and the Bank on a quarterly
basis.
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13.
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EFFECT
ON EMPLOYEE BENEFITS PLANS OR
PROGRAMS
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The
Bank’s or the Company’s Board of Directors may terminate Executive’s employment
at any time, but any termination of Executive’s employment by the Board of
Directors, other than a Termination for Cause, shall not prejudice Executive’s
right to compensation or other benefits under this
Agreement. Executive shall have no right to receive any compensation
or other benefits for any period after Termination for Cause as defined in
Section 8 hereinabove.
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14.
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REQUIRED
REGULATORY PROVISIONS
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(a) If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) (12 U.S.C. § 1818(e)(3)) or 8(g)(1) (12 U.S.C.
§ 1818(g)(1)) of the Federal Deposit Insurance Act (“FDIA”), the Bank’s
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Bank may in its discretion (i) pay Executive all
or
part of the compensation withheld while its contract obligations were suspended
and (ii) reinstate (in whole or in part) any of its obligations which were
suspended.
(b) If
Executive is removed and/or permanently prohibited from participating in
the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) (12
U.S.C. § 1818(e)(4)) or 8(g)(1) (12 U.S.C. § 1818(g)(1)) of FDIA, all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not
be
affected.
(c) If
the
Bank is in default as defined in Section 3(x)(1) (12 U.S.C. § 1813(x)(1))
of FDIA, all obligations under this Agreement shall terminate as of the date
of
default, but this paragraph shall not affect any vested rights of the
contracting parties.
(d) All
obligations under this Agreement shall be terminated, except to the extent
determined that continuation of this Agreement is necessary for the continued
operation of the Bank, (i) by the Director of OTS or his or her designee,
at the
time the FDIC enters into an agreement to provide assistance to or on behalf
of
the Bank under the authority contained in Section 13(c) (12 U.S.C.
§ 1823(c)) of FDIA; or (ii) by the Director of OTS or his or her
designee at the time the Director of OTS or his or her designee approves
a
supervisory merger to resolve problems related to operations of the Bank
or when
the Bank is determined by the Director of OTS or his or her designee to be
in an
unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Notwithstanding
anything herein contained to the contrary, any payments to Executive by the
Company, whether pursuant to this Agreement or otherwise, are subject to
and
conditioned upon their compliance with Section 18(k) of FDIA, 12 U.S.C.
Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R.
Part 359.
|
15.
|
NO
ATTACHMENT
|
(a) Except
as
required by law, no right to receive payments under this Agreement shall
be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation, or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void, and of no
effect.
10
(b) This
Agreement shall be binding upon, and inure to the benefit of, Executive,
the
Bank and the Company and their respective successors and assigns.
|
16.
|
ENTIRE
AGREEMENT; MODIFICATION AND WAIVER
|
(a) This
instrument contains the entire agreement of the parties relating to the subject
matter hereof, and supersedes in its entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof,
except
that the parties acknowledge that this Agreement shall not affect any of
the
rights and obligations of the parties under any agreement or plan
entered into with or by the Company pursuant to which the Executive may receive
compensation or benefits except as set forth in Section 12(b)
hereof. No modifications of this Agreement shall be valid unless made
in writing and signed by the parties hereto.
(b) This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto.
(c) No
term
or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver
or
estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only
as
to the specific term or condition waived and shall not constitute a waiver
of
such term or condition for the future as to any act other than that specifically
waived.
|
17.
|
SEVERABILITY
|
If,
for
any reason, any provision of this Agreement, or any part of any provision,
is
held invalid, such invalidity shall not affect any other provision of this
Agreement or any part of such provision not held so invalid, and each such
other
provision and part thereof shall to the full extent consistent with law continue
in full force and effect.
|
18.
|
HEADINGS
FOR REFERENCE ONLY
|
The
headings of sections and paragraphs herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of
the
provisions of this Agreement.
|
19.
|
GOVERNING
LAW
|
This
Agreement shall be governed by the laws of the State of New York but only
to the
extent not superseded by federal law.
|
20.
|
ARBITRATION
|
Any
dispute or controversy arising under or in connection with this Agreement
shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators, one of whom shall be selected by the Bank, one of whom shall
be
selected by Executive and the third of whom shall be selected by the other
two
arbitrators. The panel shall sit in a location within fifty (50)
miles from the location of the Bank, in accordance with the rules of the
Judicial Mediation and Arbitration Systems (JAMS) then in
effect. Judgment may be entered on the arbitrators award in any court
having jurisdiction; provided, however, that Executive shall be entitled
to seek
specific performance of his right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.
11
|
21.
|
PAYMENT
OF LEGAL FEES
|
All
reasonable legal fees paid or incurred by Executive pursuant to any dispute
or
question of interpretation relating to this Agreement shall be paid or
reimbursed by the Bank, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in Executive’s
favor. To the extent necessary to avoid taxes and penalties under
Code Section 409A, such payment or reimbursement shall be made within two
and
one-half months following the resolution of any such dispute.
|
22.
|
INDEMNIFICATION
|
During
the term of this Agreement and for a period of four (4) years thereafter,
the Bank or the Company shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors and officers
liability insurance policy at its expense. Subject to 12 C.F.R.
§ 545.121, the Bank or the Company shall indemnify Executive (and his
heirs, executors and administrators) to the fullest extent permitted under
federal law against all expenses and liabilities reasonably incurred by him
in
connection with or arising out of any action, suit or proceeding in which
he may
be involved by reason of his having been a director or officer of the Bank
or
the Company (whether or not he continues to be a director or officer at the
time
of incurring such expenses or liabilities), such expenses and liabilities
to
include, but not be limited to, judgments, court costs and attorneys fees
and
the cost of reasonable settlements (such settlements must be approved by
the
Board of Directors of the Bank or the Company). If such action, suit
or proceeding is brought against Executive in his capacity as an officer
or
director of the Bank, however, such indemnification shall not extend to matters
as to which Executive is finally adjudged to be liable for willful misconduct
in
the performance of his duties.
|
23.
|
SUCCESSORSAND
ASSIGNS
|
The
Bank
and/or the Company shall require any successor or assignee, whether direct
or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Company, expressly
and unconditionally to assume and agree to perform the Bank’s and the Company’s
obligations under this Agreement, in the same manner and to the same extent
that
the Bank and/or the Company would be required to perform if no such succession
or assignment had taken place.
12
SIGNATURES
IN
WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be
executed and their seals to be affixed hereunto by their duly authorized
officers, and Executive has signed this Agreement, on the day and date first
above written.
|
ATTEST:
|
BROOKLYN
FEDERAL SAVINGS BANK
|
||
|
/s/
|
By:
|
/s/
Xxxx X.
Xxxxxxxxx
|
|
|
Secretary
|
Name:
Xxxx X. Xxxxxxxxx
|
||
|
Title:
Chairman
|
|||
|
ATTEST:
|
|||
|
/s/
|
By:
|
/s/
Xxxx X.
Xxxxxxxxx
|
|
|
Secretary
|
Name:
Xxxx X. Xxxxxxxxx
|
||
|
Title:
Chairman
|
|||
|
WITNESS:
|
EXECUTIVE
|
||
|
/s/
|
By:
|
/s/
Xxxxx
Xxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxx
|
|||
|
Title:
Vice President and Chief Financial Officer
|
|||
13
