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EXHIBIT 10.1
CHANGE IN CONTROL SEVERANCE AGREEMENT AMONG
INDEPENDENCE COMMUNITY BANK CORP.,
INDEPENDENCE SAVINGS BANK AND ______________
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is dated this ____ day of
_____ 1997, among Independence Community Bank Corp., a Delaware corporation
(the "Corporation"), Independence Savings Bank, a New York chartered savings
bank (the "Bank"), and _______________ (the "Executive"). The Corporation and
the Bank are collectively referred to as the "Employers".
WITNESSETH
WHEREAS, the Executive is presently an officer of each of the
Employers;
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) ANNUAL COMPENSATION. The Executive's "Annual Compensation" for
purposes of this Agreement shall be deemed to mean the highest level of base
salary and bonus paid to the Executive by the Employers or any subsidiary
thereof during the calendar year in which the Date of Termination occurs
(determined on an annualized basis) or either of the two calendar years
immediately preceding the calendar year in which the Date of Termination
occurs.
(b) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order. For purposes of this paragraph, no act or failure to
act on the Executive's part shall be considered "willful" unless done, or
omitted to be done, by the
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Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interests of the Employers.
(c) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean the occurrence of any of the following: (i) the
acquisition of control of the Corporation as defined in 12 C.F.R. ss.574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. ss.574.3(c)(vii), or any successor to such
sections; (ii) an event that would be required to be reported in response to
Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant
to the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not any class of securities of the Corporation is
registered under the Exchange Act; (iii) 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 20% or more of the
combined voting power of the Corporation's then outstanding securities; or (iv)
during any period of three 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 new director 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.
(d) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment is terminated for
any other reason, the date specified in the Notice of Termination.
(f) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits
under the applicable long-term disability plan maintained by the Employers or
any subsidiary or, if no such plan applies, which would qualify the Executive
for disability benefits under the Federal Social Security System.
(g) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following
a Change in Control of the Corporation based on:
(i) Without the Executive's express written consent, the
assignment by the Employers to the Executive of any
duties which are materially inconsistent with the
Executive's positions, duties, responsibilities and
status with the Employers immediately prior to a
Change in Control of the Corporation, or a material
change in the Executive's reporting
responsibilities, titles or offices as an employee
and as in effect
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immediately prior to such a Change in Control, or
any removal of the Executive from or any failure to
re-elect the Executive to any of such
responsibilities, titles or offices, except in
connection with the termination of the Executive's
employment for Cause, Disability or Retirement or as
a result of the Executive's death or by the
Executive other than for Good Reason;
(ii) Without the Executive's express written consent, a
reduction by either of the Employers in the
Executive's base salary as in effect immediately
prior to the date of the Change in Control of the
Corporation or as the same may be increased from
time to time thereafter or a reduction in the
package of fringe benefits provided to the
Executive;
(iii) The principal executive office of either of the
Employers is relocated outside of the Brooklyn, New
York area or, without the Executive's express
written consent, either of the Employers require the
Executive to be based anywhere other than an area in
which the Employers' principal executive office is
located, except for required travel on business of
the Employers to an extent substantially consistent
with the Executive's present business travel
obligations;
(iv) Any purported termination of the Executive's
employment for Cause, Disability or Retirement which
is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (i) below;
or
(v) The failure by the Employers to obtain the assumption
of and agreement to perform this Agreement by any
successor as contemplated in Section 6 hereof.
(h) IRS. IRS shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the
Executive's employment by the Employers for any reason, including without
limitation for Cause, Disability or Retirement, or by the Executive for any
reason, including without limitation for Good Reason, shall be communicated by
written "Notice of Termination" to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after such Notice of
Termination is given, except in the case of the Employers' termination of the
Executive's employment for Cause, which shall be effective immediately; and
(iv) is given in the manner specified in Section 7 hereof.
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(j) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including
early retirement, generally applicable to their salaried employees.
2. BENEFITS UPON TERMINATION. If the Executive's employment by the
Employers shall be terminated subsequent to a Change in Control of the
Corporation by (i) the Employers for other than Cause, Disability, Retirement
or the Executive's death or (ii) the Executive for Good Reason, then the
Employers shall
(a) pay to the Executive, in either thirty-six (36) equal monthly
installments beginning with the first business day of the month following the
Date of Termination or in a lump sum as of the Date of Termination (at the
Executive's election), a cash severance amount equal to three (3) times the
Executive's Annual Compensation, and
(b) maintain and provide for a period ending at the earlier of (i) the
expiration of the remaining term of this Agreement as of the Date of
Termination or (ii) the date of the Executive's full-time employment by another
employer (provided that the Executive is entitled under the terms of such
employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the Executive's continued
participation in all group insurance, life insurance, health and accident
insurance, disability insurance and other employee benefit plans, programs and
arrangements offered by the Employers in which the Executive was entitled to
participate immediately prior to the Date of Termination (excluding (y) stock
option and restricted stock plans of the Employers and (z) bonuses included in
Annual Compensation), provided that in the event that the Executive's
participation in any plan, program or arrangement as provided in this
subparagraph (B) is barred, or during such period any such plan, program or
arrangement is discontinued or the benefits thereunder are materially reduced,
the Employers shall arrange to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive
under such plans, programs and arrangements immediately prior to the Date of
Termination.
3. PAYMENT OF ADDITIONAL BENEFITS UNDER CERTAIN CIRCUMSTANCES.
(a) If the payments and benefits pursuant to Section 2 hereof, either
alone or together with other payments and benefits which the Executive has the
right to receive from the Employers would constitute a "parachute payment" as
defined in Section 280G(b)(2) of the Code (the "Initial Parachute Payment"),
then the Employers shall pay to the Executive, in either thirty-six (36) equal
monthly installments beginning with the first business day of the month
following the Date of Termination or in a lump sum as of the Date of
Termination (at the Executive's election), a cash amount equal to the sum of
the following:
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(A) twenty (20) percent (or such other percentage equal to
the tax rate imposed by Section 4999 of the Code) of the amount by
which the Initial Parachute Payment exceeds the Executive's "base
amount" from the Employers, as defined in Section 280G(b)(3) of the
Code, with the difference between the Initial Parachute Payment and
the Executive's base amount being hereinafter referred to as the
"Initial Excess Parachute Payment";
(B) such additional amount (tax allowance) as may be
necessary to compensate the Executive for the payment by the Executive
of state and federal income and excise taxes on the payment provided
under clause (A) above and on any payments under this clause (B). In
computing such tax allowance, the payment to be made under clause (A)
above shall be multiplied by the "gross up percentage" ("GUP"). The
GUP shall be determined as follows:
Tax Rate
GUP = --------------
1- Tax Rate
The Tax Rate for purposes of computing the GUP shall be the highest
marginal federal and state income and employment-related tax rate,
including any applicable excise tax rate, applicable to the Executive
in the year in which the payment under clause (A) above is made.
(b) Notwithstanding the foregoing, if it shall subsequently be
determined in a final judicial determination or a final administrative
settlement to which the Executive is a party that the actual excess parachute
payment as defined in Section 280G(b)(1) of the Code is different from the
Initial Excess Parachute Payment (such different amount being hereafter
referred to as the "Determinative Excess Parachute Payment"), then the
Employers' independent tax counsel or accountants shall determine the amount
(the "Adjustment Amount") which either the Executive must pay to the Employers
or the Employers must pay to the Executive in order to put the Executive (or
the Employers, as the case may be) in the same position the Executive (or the
Employers, as the case may be) would have been if the Initial Excess Parachute
Payment had been equal to the Determinative Excess Parachute Payment. In
determining the Adjustment Amount, the independent tax counsel or accountants
shall take into account any and all taxes (including any penalties and
interest) paid by or for the Executive or refunded to the Executive or for the
Executive's benefit. As soon as practicable after the Adjustment Amount has
been so determined, the Employers shall pay the Adjustment Amount to the
Executive or the Executive shall repay the Adjustment Amount to the Employers,
as the case may be.
(c) In each calendar year that the Executive receives payments of
benefits under this Section 3, the Executive shall report on his state and
federal income tax returns such information as is consistent with the
determination made by the independent tax counsel or accountants of the
Employers as described above. The Employers shall indemnify and hold
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the Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys' fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information. The
Executive shall promptly notify the Employers in writing whenever the Executive
receives notice of the institution of a judicial or administrative proceeding,
formal or informal, in which the federal tax treatment under Section 4999 of
the Code of any amount paid or payable under this Section 3 is being reviewed
or is in dispute. The Employers shall assume control at its expense over all
legal and accounting matters pertaining to such federal tax treatment (except
to the extent necessary or appropriate for the Executive to resolve any such
proceeding with respect to any matter unrelated to amounts paid or payable
pursuant to this Section 3) and the Executive shall cooperate fully with the
Employers in any such proceeding. The Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Employers may
have in connection therewith without the prior consent of the Employers.
4. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
5. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
6. ASSIGNABILITY. The Employers may assign this Agreement and their
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which either of the Employers may hereafter
merge or consolidate or to which either of the Employers may transfer all or
substantially all of its respective assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employers hereunder as fully as if it had
been originally made a party hereto, but may not otherwise assign this
Agreement or their rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder.
7. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
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To the Corporation: Secretary
Independence Community Bank Corp.
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
To the Bank: Secretary
Independence Savings Bank
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
To the Executive:
8. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
their behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
9. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United
States where applicable and otherwise by the substantive laws of the State of
New York.
10. NATURE OF EMPLOYMENT AND OBLIGATIONS.
(a) Nothing contained herein shall be deemed to create other than a
terminable at will employment relationship between the Employers and the
Executive, and the Employers may terminate the Executive's employment at any
time, subject to providing any payments specified herein in accordance with the
terms hereof.
(b) Nothing contained herein shall create or require the Employers to
create a trust of any kind to fund any benefits which may be payable hereunder,
and to the extent that the Executive acquires a right to receive benefits from
the Employers hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Employers.
11. TERM OF AGREEMENT. The term of this Agreement shall be for three
years, commencing on the date of this Agreement and, upon approval of the
Boards of Directors of the Employers, shall extend for an additional year on
each annual anniversary of the date of this Agreement such that at any time the
remaining term of this Agreement shall be from two to three years. Prior to the
first annual anniversary of the date of this Agreement and
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each annual anniversary thereafter, the Boards of Directors of the Employers
shall consider and review (after taking into account all relevant factors,
including the Executive's performance) an extension of the term of this
Agreement, and the term shall continue to extend each year if the Boards of
Directors approve such extension unless the Executive gives written notice to
the Employers of the Executive's election not to extend the term, with such
written notice to be given not less than thirty (30) days prior to any such
anniversary date. If the Boards of Directors of the Employers elect not to
extend the term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such anniversary date. If
any party gives timely notice that the term will not be extended as of any
annual anniversary date, then this Agreement shall terminate at the conclusion
of its remaining term. References herein to the term of this Agreement shall
refer both to the initial term and successive terms.
12. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. REGULATORY PROHIBITION. Notwithstanding any other provision of
this Agreement to the contrary, any payments made to the Executive pursuant to
this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1828(k)) and the regulations promulgated thereunder, including 12 C.F.R.
Part 359.
16. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Employers and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employers and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: INDEPENDENCE COMMUNITY BANK CORP.
By:
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Xxxx X. Xxxxxxx, Senior Vice President , Director
and Counsel ----------------------
Attest: INDEPENDENCE SAVINGS BANK
By:
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Xxxx X. Xxxxxxx, Senior Vice President , Director
and Counsel ----------------------
EXECUTIVE
By:
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