EXHIBIT 10.7
FLUSHING SAVINGS BANK, FSB
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
22nd day of January, 2001, by and between Flushing Savings Bank, FSB, a savings
bank organized and existing under Federal law and having its executive offices
at 000-00 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Bank"), and Xxxx X.
Xxxxx residing at [ADDRESS ON FILE] ("Officer").
WITNESSETH:
WHEREAS, the Bank considers the availability of the Officer's services to
be important to the successful management and conduct of the Bank's business and
desires to secure for itself the availability of his services; and
WHEREAS, for purposes of securing for the Bank the Officer's services, the
Board of Directors of the Bank ("Board") has authorized the proper officers of
the Bank to enter into an employment agreement with the Officer on the terms and
conditions set forth herein; and
WHEREAS, the Officer is willing to make his services available to the Bank
on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and obligations hereinafter set forth, the Bank and the Officer hereby agree as
follows:
Section 1. Employment.
The Bank hereby agrees to employ the Officer, and the Officer hereby agrees
to accept such employment, during the period and upon the terms and conditions
set forth in this Agreement.
Section 2. Employment Period.
(a) Except as otherwise provided in this Agreement to the contrary, the
terms and conditions of this Agreement shall be and remain in effect during the
period of employment ("Employment Period") established under this section 2. The
Employment Period under this Amended and Restated Employment Agreement shall be
for a term commencing on January 22, 2001 and ending on November 21, 2002, plus
such extensions as are provided pursuant to section 2(b) of this Agreement.
(b) On or as of July 1, 2001, and on or as of each July 1 thereafter, the
Employment Period shall be extended for one additional year if and only if the
Board shall have authorized the extension of the Employment Period prior to July
1 of such year and the Officer shall not have notified the Bank prior to July 1
of such year that the Employment Period shall not be so extended. If the Board
shall not have authorized the extension of the Employment Period prior to July 1
of any such year, or if the Officer shall have given notice of nonextension to
the Bank prior to July 1 of such year, then the Employment Period shall not be
extended pursuant to this section 2(b) at any time thereafter and shall end on
the last day of its term as then in effect.
(c) Upon the termination of the Officer's employment with the Bank, the
extensions provided pursuant to section 2(b) shall cease (if such extensions
have not previously ceased).
Section 3. Title and Duties.
On the date on which the Employment Period commences, the Officer shall
hold the position of Executive Vice President/Chief Operating Officer of the
Bank. During the Employment Period, the Officer shall: (a) devote his full
business time and attention (other than during weekends, holidays, vacation
periods and periods of illness or approved leaves of absence) to the business
and affairs of the Bank and use his best efforts to advance the Bank's
interests, including reasonable periods of service as an officer and/or board
member of trade associations, their related entities and charitable
organizations; and (b) perform such reasonable additional duties as may be
assigned to him by or under the authority of the Board. The Officer shall have
such authority as is necessary or appropriate to carry out his duties under this
Agreement.
Section 4. Compensation.
In consideration for services rendered by the Officer under this Agreement:
(a) The Bank shall pay to the Officer a salary at an annual rate equal to
the greater of (i) $210,000 or (ii) such higher annual rate as may be prescribed
by or under the authority of the Board (the "Current Salary"). The Officer will
undergo an annual salary and performance review on or about June 30 of each year
commencing in 2001. The Current Salary payable under this section 4 shall be
paid in approximately equal installments in accordance with the Bank's customary
payroll practices.
(b) The Officer shall be eligible to participate in any bonus plan
maintained by the Bank for its officers and employees.
Section 5. Employee Benefits and Other Compensation.
(a) Except as otherwise provided in this Agreement, the Officer shall,
during the Employment Period, be treated as an employee of the Bank and be
entitled to participate in and receive benefits under the Bank's employee
benefit plans and programs, as well as such other compensation plans or programs
(whether or not employee benefit plans or programs), as the Bank may maintain
from time to time, in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and with the
Bank's customary practices.
(b) The Bank shall provide the Officer with a suitable automobile for use
in the performance of the Officer's duties hereunder and shall reimburse the
Officer for all expenses incurred in connection therewith.
(c) The Officer shall be entitled, without loss of pay, to vacation time in
accordance with the policies periodically established by the Board for senior
management officials of the Bank, which shall in no event be less than four
weeks in each calendar year. Except as provided in section 7(b), the Officer
shall not be entitled to receive any additional compensation from the Bank on
account of his failure to take a vacation, nor shall he be entitled to
accumulate unused vacation from one calendar year to the next except to the
extent authorized by the Board for senior management officials of the Bank.
Section 6. Working Facilities and Expenses.
The Officer's principal place of employment shall be at the offices of the
Bank in Queens County, New York or at such other location upon which the Bank
and the Officer may mutually agree. The Bank shall provide the Officer, at his
principal place of employment, with a private office, stenographic services and
other support services and facilities consistent with his position with the Bank
and necessary or appropriate in connection with the performance of his duties
under this Agreement. The Bank shall reimburse the Officer for his ordinary and
necessary business expenses, including, without limitation, travel and
entertainment expenses, incurred in connection with the performance of his
duties under this Agreement, upon presentation to the Bank of an itemized
account of such expenses in such form as the Bank may reasonably require.
Section 7. Termination with Bank Liability.
(a) In the event that the Officer's employment with the Bank shall
terminate during the Employment Period on account of:
(i) the Officer's voluntary resignation from employment with the
Bank within one year following an event that constitutes "Good
Reason," which is defined as:
(A) the failure of the Bank to elect or to reelect the
Officer to serve as its Executive Vice President/Chief Operating
Officer or such other position as the Officer consents to hold;
(B) the failure of the Bank to cure a material adverse
change made by the Bank in the Officer's functions, duties, or
responsibilities in his position with the Bank within sixty days
following written notice thereof from the Officer;
(C) the failure of the Bank to maintain the Officer's
principal place of employment at its offices in Queens County,
New York or at such other location upon which the Bank and the
Officer may mutually agree;
(D) the failure of the Board to extend the Employment Period
within the times provided in section 2(b); provided, however,
that such failure shall not constitute Good Reason until the
earlier of 30 days after any determination by the Board that the
Employment Period shall not be so extended or August 1 of such
year;
(E) the failure of the Bank to cure a material breach of
this Agreement by the Bank within sixty days following written
notice thereof from the Officer; or
(F) after a Change of Control (as defined in Section 10),
the failure of any successor company to the Bank to assume this
Agreement.
(ii) the discharge of the Officer by the Bank for any reason
other than (A) for "Cause" as defined in section 8(b) or (B) the
Officer's death or "Disability" as defined in section 9(a); or
(iii) the Officer's voluntary resignation from employment with
the Bank for any reason within the sixty-day period commencing six
months following a Change of Control as defined in section 10;
then the Bank shall provide the benefits and pay to the Officer as liquidated
damages the amounts provided for under section 7(b).
(b) Upon the termination of the Officer's employment with the Bank under
circumstances described in section 7(a), the Bank shall pay and provide to the
Officer:
(i) his earned but unpaid Current Salary as of the date of
termination, plus an amount representing any accrued but unpaid
vacation time and floating holidays;
(ii) if the Officer's termination of employment occurs after a
Change of Control, a pro rata portion of his bonus for the year of
termination, determined by multiplying the amount of the bonus earned
by the Officer for the preceding calendar year by the number of full
months of employment during the year of termination, and dividing by
12. If the Officer's termination of employment occurs prior to a
Change of Control, the Compensation Committee of the Bank may, in its
sole discretion, award the Officer a bonus for the year of
termination, in an amount determined by such Committee either at the
time of
termination of employment or at the time bonuses to active employees
are awarded, which the Bank shall pay to the Officer promptly after it
has been awarded;
(iii) the benefits, if any, to which he is entitled as a former
employee under the Bank's employee benefit plans and programs and
compensation plans and programs;
(iv) continued health and welfare benefits (including group life,
disability, medical and dental benefits), in addition to that provided
pursuant to section 7(b)(iii), to the extent necessary to provide
coverage for the Officer for the Severance Period (as defined in
section 7(c)). Such benefits shall be provided through the purchase of
insurance, and shall be equivalent to the health and welfare benefits
(including cost-sharing percentages) provided to active employees of
the Bank (or any successor thereof) as from time to time in effect
during the Severance Period. Where the amount of such benefits is
based on salary, they shall be provided to the Officer based on the
highest annual rate of Current Salary achieved by the Officer during
the Employment Period. If the Officer had dependent coverage in effect
at the time of his termination of employment, he shall have the right
to elect to continue such dependent coverage for the Severance Period.
The benefits to be provided under this paragraph (iv) shall cease to
the extent that substantially equivalent benefits are provided to the
Officer (and/or his dependents) by a subsequent employer of the
Officer;
(v) if the Officer is age 55 or older at the end of the Severance
Period, he shall be entitled to elect coverage for himself and his
dependents under the Bank's retiree medical and retiree life insurance
programs. Such coverage, if elected, shall commence upon the
expiration of the Severance Period, without regard to whether the
Officer commences his pension benefit at such time, and shall continue
for the life of each of the Officer and his spouse and for so long as
any of his other covered dependents remain eligible. The coverage and
cost-sharing percentage of the Officer and his dependents under such
programs shall be those in effect under such programs on the date of
the Officer's termination of employment with the Bank, and shall not
be adversely modified without the Officer's written consent; and
(vi) within thirty days following his termination of employment
with the Bank, a cash lump sum payment in an amount equal to the
Current Salary and bonus that the Officer would have earned pursuant
to sections 4(a) and 4(b), respectively, if he had continued working
for the Bank for the Severance Period (basing such bonus on the
highest bonus, if any, paid to the Officer by the Bank under section
4(b) within the three-year period prior to the date of termination),
provided, however, that the lump sum payable pursuant to this clause
(vi) of this section 7(b) shall not exceed three times the Officer's
average annual compensation based on the most recent five taxable
years (or such lesser number of taxable years the Officer was employed
by the Bank).
The lump sum payable pursuant to clause (vi) of this section 7(b) is to be paid
in lieu of all other payments of Current Salary and bonus provided for under
this Agreement relating to the period following any such termination and shall
be payable without proof of damages and without regard to the Officer's efforts,
if any, to mitigate damages. The Bank and the Officer hereby stipulate that the
damages which may be incurred by the Officer following any such termination of
employment are not capable of accurate measurement as of the date first above
written and that the payments and benefits provided under this section 7(b) are
reasonable under the circumstances as a combination of liquidated damages and
severance benefits.
(c) For purposes of section 7, the Severance Period means:
(i) in the case of termination of employment prior to July 22,
2001, period of 6 months;
(ii) in the case of termination of employment on or after July
22, 2001, but prior to the second anniversary of this Agreement, a
period of 12 months;
(iii) in the case of termination of employment on or after the
second anniversary of this Agreement, a period of 24 months; and
(iv) notwithstanding clauses (i), (ii), and (iii) of this section
7(c), in the case of termination of employment after a Change of
Control, a period of 24 months, without regard to the date of such
termination of employment.
Section 8. Termination for Cause or Voluntary Resignation Without Good
Reason.
(a) In the event that the Officer's employment with the Bank shall
terminate during the Employment Period on account of:
(i) the discharge of the Officer by the Bank for Cause; or
(ii) the Officer's voluntary resignation from employment with the
Bank for reasons other than those constituting a Good Reason;
then the Bank shall have no further obligations under this Agreement, other than
(A) the payment to the Officer of his earned but unpaid Current Salary as of the
date of the termination of his employment; and (B) the provision of such other
benefits, if any, to which he is entitled as a former employee under the Bank's
employee benefit plans and programs and compensation plans and programs.
(b) For purposes of this Agreement, the term "Cause" means the Officer's
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, or material breach of any
provision of this Agreement.
Section 9. Disability or Death.
(a) The Officer's employment with the Bank may be terminated for
"Disability" if the Officer shall become disabled or incapacitated during the
Employment Period to the extent that he has been unable to perform the essential
functions of his employment for 270 consecutive days, subject to the Officer's
right to receive from the Bank following his termination due to Disability the
following percentages of his Current Salary under section 4 of this Agreement:
100% for the first six months, 75% for the next six months and 60% thereafter
for the remaining term of the Employment Period (less in each case any benefits
which may be payable to the Officer under the provisions of disability insurance
coverage in effect for Bank employees).
(b) In the event that the Officer's employment with the Bank shall
terminate during the Employment Period on account of death, the Bank shall
promptly pay the Officer's designated beneficiaries or, failing any designation,
his estate a cash lump sum payment equal to his earned but unpaid Current
Salary.
(c) In the event of the Officer's termination of employment on account of
death or Disability prior to a Change of Control, the Compensation Committee of
the Bank may, in its sole discretion, award the Officer a bonus for the year of
termination, in an amount determined by such Committee either at the time of
termination of employment or at the time bonuses to active employees are
awarded, in which case the Bank shall pay such bonus to the Officer or, in the
event of death, his designated beneficiaries or estate, as the case may be,
promptly after it is awarded. In the event of the Officer's termination of
employment on account of death or Disability after a Change of Control, the Bank
shall promptly pay the Officer or, in the event of death, his designated
beneficiaries or estate, as the case may be, a pro rata portion of his bonus for
the year of termination, determined by multiplying the amount of the bonus
earned by the Officer for the preceding calendar year by the number of full
months of employment during the year of termination, and dividing by 12.
Section 10. Change of Control.
For purposes of this Agreement, the term "Change of Control" means:
(a) the acquisition of all or substantially all of the assets of the Bank
or Flushing Financial Corporation ("Holding Company") by any person or entity,
or by any persons or entities acting in concert;
(b) the occurrence of any event if, immediately following such event, a
majority of the members of the Board of Directors of the Bank or the Holding
Company or of any successor corporation shall consist of persons other than
Current Members (for these purposes, a "Current Member" shall mean any member of
the Board of Directors of the Bank or the Holding Company as of July 18, 2000
and any successor of a Current Member whose nomination or election has been
approved by a majority of the Current Members then on the Board of Directors);
(c) the acquisition of beneficial ownership, directly or indirectly (as
provided in Rule 13d-3 of the Securities Exchange Act of 1934 (the "Act"), or
any successor rule), of 25% or more of the total combined voting power of all
classes of stock of the Bank or the Holding Company by any person or group
deemed a person under Section 13(d)(3) of the Act; or
(d) approval by the stockholders of the Bank or the Holding Company of an
agreement providing for the merger or consolidation of the Bank or the Holding
Company with another corporation where the stockholders of the Bank or the
Holding Company, immediately prior to the merger or consolidation, would not
beneficially own, directly or indirectly, immediately after the merger or
consolidation, shares entitling such stockholders to 50% or more of the total
combined voting power of all classes of stock of the surviving corporation.
Section 11. No Effect on Employee Benefit Plans or Compensation Programs.
Except as expressly provided in this Agreement, the termination of the
Officer's employment during the term of this Agreement or thereafter, whether by
the Bank or by the Officer, shall have no effect on the rights and obligations
of the parties hereto under the Bank's employee benefit plans or programs or
compensation plans or programs (whether or not employee benefit plans or
programs) that the Bank may maintain from time to time.
Section 12. Successors and Assigns.
This Agreement will inure to the benefit of and be binding upon the
Officer, his legal representatives and estate or intestate distributees, and the
Bank and its successors and assigns, including any successor by merger or
consolidation or a statutory receiver or any other person or firm or corporation
to which all or substantially all of the assets and business of the Bank may be
sold or otherwise transferred.
Section 13. Notices.
Any communication to a party required or permitted under this Agreement,
including any notice, direction, designation, consent, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally, or five days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below or at such other address as one such
party may by written notice specify to the to the other party:
If to the Officer:
Xxxx X. Xxxxx
[ADDRESS ON FILE]
If to the Bank:
Flushing Savings Bank, FSB
000-00 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Secretary of the Bank
Section 14. Severability.
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
Section 15. Waiver.
Failure to insist upon strict compliance with any of the terms, covenants
or conditions hereof shall not be deemed a waiver of such term, covenant, or
condition. A waiver of any provision of this Agreement must be made in writing,
designated as a waiver, and signed by the party against whom its enforcement is
sought. Any waiver or relinquishment of any right or power hereunder at any one
or more times shall not be deemed a waiver or relinquishment of such right or
power at any other time or times.
Section 16. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and all of which shall constitute one and the same
Agreement.
Section 17. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with (i) the laws of the State of New York, without reference to
conflicts of law principles, and (ii) Federal law, to the extent such law
preempts New York law.
Section 18. Headings.
The headings of sections in this Agreement are for convenience of reference
only and are not intended to qualify the meaning of any section. Any reference
to a section number shall refer to a section of this Agreement, unless otherwise
stated.
Section 19. Entire Agreement; Modifications.
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. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.
Section 20. Funding.
The Bank may elect in its sole discretion to fund all or part of its
obligations to the Officer under this Agreement; provided, however, that should
it elect to do so, all assets acquired by the Bank to fund its obligations shall
be part of the general assets of the Bank and shall be subject to all claims of
the Bank's creditors.
Section 21. Regulatory Action.
(a) Notwithstanding any other provision of this Agreement to the contrary,
this Section 21 shall apply at all times during the Employment Period.
(b) If the Officer is suspended and/or temporarily prohibited from
participating in the conduct of the affairs of the Bank by a notice served under
12 U.S.C. 1818(e)(3) and (g)(1), the Bank's obligations to the Officer under
this Agreement shall be suspended as of the date of such service unless such
service is stayed by appropriate proceedings. If the charges in such notice are
dismissed, the Bank shall (i) pay the Officer all of the compensation withheld
while the Bank's obligations under this Agreement were so suspended, and (ii)
reinstate in whole any of its obligations to the Officer which were suspended.
(c) If the Officer is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under 12
U.S.C. 1818(e)(4) or (g)(1), all obligations of the Bank to the Officer under
this Agreement shall terminate as of the effective date of the order, other than
vested rights of the parties accrued as of such effective date, which shall not
be affected.
(d) If the Bank is in default (as defined in section 3(x)(1) of the Federal
Deposit Insurance Act), all obligations of the Bank under this Agreement shall
terminate as of the date of such default, but this Section 21(d) shall not
affect any vested rights of the Officer accrued as of such date of default.
(e) All obligations of the Bank under this Agreement shall be terminated,
except to the extent it is determined that continuation of the Agreement is
necessary to the continued operation of the Bank, (i) by the Regional Director
of the Office of Thrift Supervision or his or her designee ("Director") at the
time the Federal Deposit Insurance Corporation or Resolution Trust Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under
the authority contained in Section 13(c) of the Federal Deposit Insurance Act;
or (ii) by the Director at the time the Director approves a supervisory merger
to resolve problems related to operation of the Bank or when the Bank is
determined by the Director to be in an unsafe or unsound condition; provided,
however, that this Section 21(e) shall not affect any vested rights of the
Officer accrued as of such date of termination.
(f) Any payments made to the Officer pursuant to this Agreement or
otherwise are subject to and conditioned upon their compliance with 12
U.S.C.ss.1828(k) and any regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the day
and year first above written.
FLUSHING SAVINGS BANK, FSB
By: /S/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: President & C.E.O.
/S/ XXXX X. XXXXX
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Xxxx X. Xxxxx
