Exhibit 10.2
PART II. OTHER INFORMATION
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Change of Control Severance Agreement ("Agreement") dated as
of September 20, 2001, is entered into by and among BSB Bancorp, Inc., a
Delaware corporation ("Corporation"), BSB Bank & Trust Company, a New York
chartered bank and trust company ("Employer") and Xxxx X. Xxxxx ("Executive").
Capitalized terms that are not otherwise defined in this Agreement are defined
in Section 7 hereof.
WITNESSETH:
Whereas, Executive has accepted employment by Employer as its
Administrative Vice President;
Whereas, Corporation and Employer desire to provide certain
security to Executive in connection with Executive's employment with Employer;
Whereas, Executive, Corporation and Employer desire to enter into
this Agreement pertaining to the terms of the security Corporation and Employer
are providing to Executive with respect to his employment;
Whereas, the Boards of Directors of Corporation and Employer (the
"Boards") have approved and authorized the execution and delivery of this
Agreement by and on behalf of Corporation and Employer;
Now, therefore, in consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree to this Agreement as
follows:
1. Term. The initial term of this Agreement extends for a period
----
of two years from September 20, 2001, provided that the term of the Agreement
shall be extended automatically for one additional year on each annual
anniversary date of this Agreement, unless either the Boards or Executive
provide(s) contrary written notice to the other not less than 180 days in
advance of any such anniversary date. In the event either the Boards or
Executive provide such written notice, then the term hereof shall not be
extended, but the then current term shall continue for the period remaining
thereunder. Notwithstanding the foregoing, this Agreement shall automatically
expire and terminate on Executive's normal retirement date at age 65 or on
Executive's early retirement under the Special Service Retirement provision of
Employer's pension plan if Executive elects to take such early retirement. The
initial term of employment and all such renewed terms of employment under this
Agreement are collectively referred to herein as the "term of this Agreement."
2. Termination of Employment at the request of an Acquiror or
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after a Change in Control. Subject to Section 6 hereof, if during the term of
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this Agreement, before a Change in Control at the request or direction of the
acquiring party, or at any time during the 12-month period following a Change in
Control (1) the employment of Executive with Employer is terminated by Employer
for any reason other than Good Cause, or (2) Executive terminates his employment
with Employer for Good Reason, Employer shall, during the Severance Period,
continue to pay Executive's Base Salary to Executive. Such Base Salary will be
paid during the Severance Period in monthly or other installments, similar to
those being received by Executive at the date of the Change in Control, and will
commence as soon as practicable following the date of termination of employment.
Executive shall receive any and all vested benefits accrued under any Incentive
Plans and Retirement Plans to the date of termination of employment, the amount,
form and time of payment of such benefits to be determined by the terms of such
Incentive Plans and Retirement Plans and such benefits shall not be reduced by
amounts payable under this Agreement.
3. No Setoff. No payment or benefits payable to or with respect
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to Executive pursuant to this Agreement shall be reduced by any amount Executive
or his spouse may earn or receive from employment with another employer or from
any other source.
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4. Death. If Executive dies during the Severance Period, all amounts
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payable hereunder to Executive shall, during the remainder of the
Severance Period, be paid to the person designated from time to time by the
Executive as his beneficiary for purposes of this Agreement by written notice to
the Employer, or, if no such designation is in effect at the time of his death,
to his surviving spouse, if any, or otherwise to Xxxxxxx X. Xxxxx.
5. Termination before a Change in Control or after a Change in
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Control for Good Cause or Without Good Reason. If the employment of Executive
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with Employer is terminated (a) for any reason or for no reason before a Change
in Control other than at the request or direction of an acquiror in connection
with a Change in Control, or (b) after a Change in Control by Employer for Good
Cause, or by the voluntary action of Executive without Good Reason, Executive's
base salary (at the rate in effect on the date of termination) shall be paid
through the date of termination, and Employer shall have no further obligation
to Executive or his spouse under this Agreement, except for benefits accrued
before such termination under Incentive Plans and Retirement Plans.
6. Parachute Payments.
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(a) Notwithstanding any other provision of this Agreement or of
any other agreement, contract or understanding heretofore or hereafter entered
into by Executive with Corporation or Employer or any subsidiary or affiliate
thereof, except an agreement, contract or understanding hereafter entered into
that expressly modifies or excludes application of this Section 6 (the "Other
Agreements"), and notwithstanding any formal or informal plan or other
arrangement heretofore or hereafter adopted by Corporation or Employer (or any
subsidiary or affiliate thereof) for the direct or indirect compensation of
Executive (including groups or classes of participants or beneficiaries of which
Executive is a member), whether or not such compensation is deferred, is in
cash, or is in the form of a benefit to or for Executive (a "Benefit Plan"), if
Executive is a "disqualified individual" (as defined in Section 280G of the
Code), Executive shall not have any right to receive any payment or benefit
under this Agreement, any Other Agreement or any Benefit Plan (i) to the extent
that such payment or benefit, taking into account all other rights, payments or
benefits to or for Executive under this Agreement, all Other Agreements and all
Benefit Plans, would cause any payment or benefit to Executive under this
Agreement, any Other Agreement or any Benefit Plan to be considered a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code as then in effect
(a "Parachute Payment") and (ii) if, as a result of receiving a Parachute
Payment, the aggregate after-tax amount received by Executive under this
Agreement, all Other Agreements and all Benefit Plans would be less than the
maximum after-tax amount that could be received by Executive without causing any
such payment or benefit to be considered a Parachute Payment. In the event that
the receipt of any such payment or benefit under this Agreement, any Other
Agreement or any Benefit Plan would cause Executive to be considered to have
received a Parachute Payment that would have the adverse after-tax effect
described in clause (ii) of the preceding sentence, then Executive shall have
the right, in Executive's sole discretion, to designate those rights, payments
or benefits under this Agreement, any Other Agreement and any Benefit Plan that
should be reduced or eliminated so as to avoid having the payment or benefit to
Executive under this Agreement be deemed to be a Parachute Payment.
(b) All determinations required to be made under this Section 6,
including whether and when a reduction described in Section 6(a) is required and
the amount of such reduction and the assumptions to be utilized in arriving at
such determination, shall be made by PricewaterhouseCoopers LLP or such other
certified public accounting firm reasonably acceptable to Corporation and
Employer as may be designated in writing by Executive (the "Accounting Firm")
which shall provide detailed supporting calculations both to Corporation and
Employer and Executive as requested by Corporation and Employer. In the event
that the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, Executive shall appoint another
nationally recognized accounting firm reasonably acceptable to Corporation and
Employer to make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by Corporation and
Employer. Any determination by the Accounting Firm shall be binding upon
Corporation and Employer and Executive.
7. Definitions. For purposes of this Agreement:
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(a) "Base Salary" shall mean the higher of Executive's annual
base salary at the rate in effect on the date of a Change in Control or the rate
in effect on the date of termination of employment.
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PART II. OTHER INFORMATION
(b) "Change in Control" shall be deemed to have occurred if there
has been a change of 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 ("Exchange Act"), or such item
thereof which may hereafter pertain to the same subject; provided that, and
notwithstanding the foregoing, a Change in Control shall be deemed to have
occurred if (i) any "person" (as that term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of Corporation or Employer representing 25% or more of
the combined voting power of Corporation's then outstanding securities, (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Boards of Directors of Corporation and Employer
cease for any reason to constitute at least a majority thereof unless the
election of each Director, who was not a Director at the beginning of the
period, was approved by a vote of at least two-thirds of the Directors then
still in office who were Directors at the beginning of the period, (iii)
Corporation shall cease to be a publicly owned corporation, or (iv) any merger
or consolidation of Corporation with or into another entity shall occur as a
result of which the stockholders of Corporation do not retain or acquire 75% or
more of the capital stock of the resulting entity.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Good Cause" shall be deemed to exist if, and only if: (1)
Executive engages in acts or omissions constituting dishonesty, intentional
breach of fiduciary obligation or intentional wrongdoing or malfeasance; (2)
Executive is convicted of a criminal violation involving fraud or dishonesty; or
(3) Executive materially breaches the Agreement (other than by engaging in acts
or omissions enumerated in paragraphs (1) and (2) above), or materially fails to
satisfy the conditions and requirements of his employment with Employer, and
such breach or failure by its nature is incapable of being cured, or such breach
or failure remains uncured for more than 30 days following receipt by Executive
of written notice from Employer specifying the nature of the breach of this
paragraph (3), provided, that, inattention by Executive to his duties shall be
deemed a breach or failure capable of cure.
Without limiting the generality of the foregoing, the following shall
not constitute Good Cause: any personal or policy disagreement between Executive
and Employer or any member of the Board of Directors of Employer; or any action
taken by Executive in connection with his duties if Executive acted in good
faith and in a manner he reasonably believed to be in, and not opposed to, the
best interest of Employer and had no reasonable cause to believe his conduct was
unlawful.
Notwithstanding anything herein to the contrary, in the event Employer
shall terminate the employment of Executive for Good Cause hereunder, Employer
shall give at least 30 days prior written notice to Executive specifying in
detail the reason or reasons for Executive's termination.
(e) "Good Reason" shall exist if:
(1) there is a significant change in the nature or the
scope of Executive's authority;
(2) There is a reduction in Executive's base salary from the
rate in effect during the fiscal year before the Change in Control;
(3) Employer changes the principal location in which
Executive is required to perform services to one which is more than 30 miles
from his current location; or
(4) There is a reasonable determination by Executive that,
as a result of a change in circumstances significantly affecting his position,
he is unable to exercise the authority, powers, function or duties attached to
his position.
(f) "Incentive Plans" shall mean any incentive, bonus deferred
compensation or similar plan or arrangement currently or hereafter made
available by Corporation or Employer in which Executive is eligible to
participate.
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PART II OTHER INFORMATION
(g) "Retirement Plans" shall mean any qualified or supplemental
defined benefit retirement plan or defined contribution retirement plan,
currently or hereinafter made available by Corporation or Employer in which
Executive is eligible to participate.
(h) "Severance Period" shall mean the period beginning on the
date Executive's employment with Employer terminates under circumstances
described in Section 2 above and ending on the first to occur of: (1) the date
24 months thereafter, or (2) the date Executive attains or would have attained
age 65.
8. Unfunded Rights. All rights of Executive and his spouse or other
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beneficiary under this Agreement shall at all times be entirely unfunded and no
provision shall at any time be made with respect to segregating any assets of
Corporation or Employer for payment of any amounts due hereunder. Neither
Executive nor his spouse or other beneficiary shall have any interest in or
rights against any specific assets of Corporation or Employer, and Executive and
his spouse or other beneficiary shall have only the rights of a general
unsecured creditor of Employer.
9. Applicable Law. This Agreement shall be construed and interpreted
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pursuant to the laws of the State of New York applicable to contracts entered
into and to be performed wholly within its borders.
10. Entire Agreement. This Agreement contains the entire Agreement
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between Employer and Executive and supersedes any and all previous agreements,
written or oral, among the parties relating to his employment by Employer. No
amendment or modification of the terms of this Agreement shall be binding upon
the parties hereto unless reduced to writing and signed by Corporation, Employer
and Executive. This Agreement is the exclusive agreement between Corporation,
Employer and Executive regarding payments to Executive in the event of a change
in control of Corporation or Employer. During the term of this Agreement,
Executive shall not participate in or benefit from any other change of control
severance plan or policy which may be adopted by Corporation or Employer.
11. No Employment Contract. Nothing contained in this Agreement shall
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be construed to be an employment contract between Executive and Employer.
Executive is employed at will and Employer may terminate his employment at any
time, with or without cause.
12. Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed an original.
13. Severability. In the event any provision of this Agreement is
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held illegal or invalid, the remaining provisions of this Agreement shall not be
affected thereby.
14. Successors. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, representatives and
successors.
15. Notice. Notices required under this Agreement shall be in writing
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and sent by registered mail, return receipt requested, to the following
addresses or to such other address as the party being notified may have
previously furnished to the others by written notice.
If to Employer or Corporation:
Attention: Xxxxxx X. Xxxxx
BSB Bancorp, Inc.
BSB Bank & Trust Company
00-00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
If to Executive:
Xxxx X. Xxxxx
000 Xxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
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PART II. OTHER INFORMATION
In Witness Whereof, Executive has hereunto set his hand, and
Corporation and Employer have caused this agreement to be executed in their
names and on their behalf, all as of the day and year first above written.
BSB BANCORP, INC.
ATTEST: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
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(Secretary) Xxxxxx X. Xxxxx
President and Chief
Executive Officer
BSB BANK & TRUST COMPANY
ATTEST: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
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(Secretary) Xxxxxx X. Xxxxx
President and Chief
Executive Officer
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Administrative Vice President
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PART II. OTHER INFORMATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BSB Bancorp, Inc.
Date: November 9, 2001 By: /s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
President
and Chief Executive Officer
Date: November 9, 2001 By: /s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
Senior Vice President
and Chief Financial Officer
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