Exhibit 10.10
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is made and entered into as of
the _____ day of August, 2006 ("Effective Date"), by and between Provident Bank,
a savings bank organized and existing under the laws of the United States of
America and having its executive offices at 000 Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxx
Xxxx 00000 ("Bank"), and Xxxx X. Xxxxxx ("Executive"). The Bank is the
wholly-owned subsidiary of Provident New York Bancorp ("Company").
WITNESSETH:
WHEREAS, Executive currently serves as an executive officer of the
Bank; and
WHEREAS, the Bank considers the continued availability of Executive's
services to be important to the successful management and conduct of the Bank's
business and desires to secure for itself the continued availability of his
services; and
WHEREAS, Executive is willing to continue to make his services
available to the Bank on the terms and conditions set forth herein, such that
both the Bank and the Executive agree that the prior employment agreement among
the Bank, the Company and the Executive dated January 1, 2004 is superseded in
its entirety by this Agreement and the execution of this Agreement will not
entitle the Executive to any payments under such prior agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and obligations hereinafter set forth, the Bank and Executive hereby
agree as follows:
1. Employment. The Bank hereby agrees to continue the employment of the
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Executive and the Executive hereby agrees to continue such employment, during
the period and upon the terms and conditions set forth in this Agreement. All
actions that may be undertaken by the Bank with respect to the Executive's
employment with the Bank pursuant to this Agreement may be undertaken by the
Chief Executive Officer of the Bank ("CEO"), provided that the CEO shall report
such actions to the Bank's Board of Directors ("Board") and such actions shall
be subject to ratification by the Board in accordance with the Bank's by-laws.
2. Employment Period.
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(a) Two Year Contract; Daily Renewal. The Executive's period of
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employment with the Bank ("Employment Period") shall begin on the Effective Date
and shall renew daily such that the remaining unexpired term of the Agreement
shall be twenty-four (24) months, until the date that the Bank gives the
Executive written notice of non-renewal ("Non-Renewal Notice"). The Employment
Period shall end on the date that is twenty-four (24) months after the date of
the Non-Renewal Notice, unless the parties agree that the Employment Period
shall end on an earlier date. Notwithstanding the preceding provisions of this
Section 2(a), the Employment Period under this Agreement shall automatically
terminate on the last day of the calendar month in which the Executive attains
age 65.
(b) Annual Performance Evaluation. On either a fiscal year or calendar
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year basis, (consistently applied from year to year), the Bank shall conduct an
annual evaluation of the Executive's performance , unless notice of non-renewal
has been given. The annual performance evaluation proceedings shall be included
in the minutes of the Board meeting that next follows such annual performance
review.
(c) Continued Employment Following Termination of Employment Period.
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Nothing in this Agreement shall mandate or prohibit a continuation of the
Executive's employment following the expiration of the Employment Period upon
such terms and conditions as the Bank and the Executive may mutually agree.
3. Duties.
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(a) Title; Reporting Responsibility. The Executive shall serve as the
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Executive Vice President, Chief Financial Officer of the Bank, with power,
authority and responsibility commensurate with those of a senior officer. The
Executive shall directly report to the CEO.
(b) Time Commitment. The Executive shall devote his full business time
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and attention to the business and affairs of the Bank and shall use his best
efforts to advance the interests of the Bank.
4. Annual Compensation.
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(a) Base Salary.
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(i) Annual Salary. In consideration for the services performed
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by the Executive under this Agreement, the Bank shall pay to the Executive an
annual salary ("Base Salary"). The Base Salary shall be paid in approximately
equal installments in accordance with the Bank's customary payroll practices.
The Bank shall review the Executive's Base Salary at least annually for possible
upward adjustment, but the Executive's Base Salary shall not be reduced without
the Executive's consent. For the fiscal year that began on October 1, 2005, the
Executive's Base Salary is $200,000.
(ii) Automatic Adjustment Following a Change in Control. For
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each calendar year that begins on or after the date on which a Change in Control
(as defined in Section 9) occurs, and continuing through the remainder of the
Employment Period, the Executive's Base Salary shall automatically increase by
the greater of (1) six percent (6%) or (2) the average annual rate of base
salary increases provided for the immediately preceding calendar year to
individuals employed by the Bank at the level of assistant vice president or
above (but excluding the Executive from the determination of such average).
(b) Incentive Compensation. The Executive shall be eligible to
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participate in any bonus and incentive compensation programs established by the
Bank from time to time for senior executive officers, including the Bank's
Executive Officer Management Incentive Program. Such compensation shall be
referred to herein as "Incentive Compensation". For the fiscal year that ended
on September 30, 2005, the Executive received Incentive Compensation of $27,700.
(c) Equity Compensation. The Executive shall be eligible to participate
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in any equity compensation programs established by the Bank from time to time
for senior executive officers, including, but not limited to, the 2004 Stock
Incentive Plan.
(d) Employee Benefit Plans; Paid Time Off
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(i) Benefit Plans. During the Employment Period, the Executive
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shall be an employee of the Bank and shall be entitled to participate in the
Bank's (i) tax-qualified retirement plans, (i.e., the defined benefit plan,
401(k) plan and ESOP); (ii) nonqualified retirement plans (i.e., the
Supplemental Executive Retirement Plan); (iii) group life, health and disability
insurance plans; and (iv) any other employee benefit plans and programs in
accordance with the Bank's customary practices, provided he is a member of the
class of employees authorized to participate in such plans or programs.
(ii) Paid Time Off. The Executive shall be entitled to a
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minimum of four (4) weeks of paid vacation time each year during the Employment
Period (measured on a fiscal or calendar year basis, in accordance with the
Bank's usual practices), as well as sick leave, holidays and other paid absences
in accordance with the Bank's policies and procedures for senior executives. Any
unused paid time off during an annual period shall expire at the end of that
period, such that unused paid time off shall not be carried forward into the
following year and the Executive shall not be compensated for unused paid time
off.
5. Outside Activities and Board Memberships
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During the term of this Agreement, the Executive shall not, directly or
indirectly, provide services on behalf of any competitive financial
institutions, any insurance company or agency, any mortgage or loan broker or
any other competitive entity or on behalf of any subsidiary or affiliate of any
such competitive entity, as an employee, consultant, independent contractor,
agent, sole proprietor, partner, joint venturer, corporate officer or director;
nor shall the Executive acquire by reason of purchase during the term of this
Agreement the ownership of more than 5% of the outstanding equity interest in
any such competitive entity. In addition, during the term of this Agreement, the
Executive shall not, directly or indirectly, acquire a beneficial interest, or
engage in any joint venture in real estate with the Bank. Subject to the
foregoing, and to the Executive's right to continue to serve as an officer
and/or director or trustee of any business organization as to which he was so
serving on the Effective Date of this Agreement, the Executive may serve on
boards of directors of unaffiliated corporations, subject to Board approval,
which shall not be unreasonably withheld, and such services shall be presumed
for these purposes to be for the benefit of the Bank. Except as specifically set
forth herein, the Executive may engage in personal business and investment
activities, including real estate investments and personal investments in the
stocks, securities and obligations of other financial institutions (or their
holding companies). Notwithstanding the foregoing, in no event shall the
Executive's outside activities, services, personal business and investments
materially interfere with the performance of his duties under this Agreement.
6. Working Facilities and Expenses
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(a) Working Facilities. The Executive's principal place of employment
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shall be at the Bank's principal executive office or at such other location upon
which the Bank and the Executive may mutually agree.
(b) Expenses. The Bank shall reimburse the Executive for his ordinary
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and necessary business expenses and 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.
7. Termination of Employment with Bank Liability
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(a) Reasons for Termination. In the event that the Executive's
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employment with the Bank shall terminate during the Employment Period on account
of:
(i) The Executive's voluntary resignation from employment
with the Bank within one year after any of the
following events, such that the Executive's
resignation shall be treated as a resignation for
"Good Reason":
(A) the failure to re-appoint the Executive to
the position set forth under Section 3;
(B) a material change in Executive's functions,
duties, or responsibilities, including those
with respect to the Company, which change
would cause Executive's position to become
one of lesser responsibility, importance, or
scope, which the Bank fails to cure within
30 days following written notice thereof
from the Executive;
(C) liquidation or dissolution of the Bank or
the Company other than liquidations or
dissolutions that are caused by
reorganizations that do not affect the
status of the Executive;
(D) a material breach of this Agreement by the
Bank, which the Bank fails to cure within 30
days following written notice thereof from
the Executive; or
(E) a Change in Control Date of the Bank as
defined in Section 9; or
(ii) the discharge of the Executive by the Bank for any
reason other than for "Cause" as defined in Section
8(a); or
(iii) the termination of the Executive's employment with
the Bank as a result of the Executive's "total and
permanent disability" which, for purposes of this
Agreement, shall be determined by the Bank, based
upon competent and independent medical evidence that
the Executive's physical or mental condition is such
that he is totally and permanently incapable of
performing the essential tasks of his position
hereunder, and, to the extent that any payments
hereunder on account of disability are subject to
Section 409A of the Internal Revenue Code of 1986
("Code"), "disability" shall have the meaning set
forth in Code Section 409A and the regulations
thereunder;
then the Bank shall provide the benefits and pay to the Executive the amounts
provided for under Section 7(b).
(b) Severance Pay. Subject to the limitations set forth in
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Sections 7(f) and (g) below, upon the termination of the Executive's employment
with the Bank under circumstances described in Section 7(a) of this Agreement,
the Bank shall pay to the Executive (or, in the event of the Executive's death
after the event described in Section 7(a) has occurred, the Bank shall pay to
the Executive's surviving spouse, beneficiary or estate) an amount equal to the
following, provided that, in each case where an amount to be paid below is the
"present value" of an amount, such "present value" shall be determined using a
discount rate that is equal to the "applicable federal rate" published by the
Internal Revenue Service for the month preceding the Executive's termination of
employment:
(i) his earned but unpaid salary as of the date of his
termination of employment with the Bank;
(ii) the benefits, if any, to which he is entitled as a
former employee under the Bank's employee benefit
plans;
(iii) continued group life and health insurance benefits
which will provide the Executive with coverage for
the remaining unexpired Employment Period equivalent
to the coverage to which he would have been entitled
if he had continued working for the Bank during the
remaining unexpired Employment Period with the same
Base Salary as was in effect on the date of his
termination of employment;
(iv) within 60 days following his termination of
employment, a lump sum payment, as liquidated
damages, in an amount equal to the present value of
the Base Salary that the Executive would have earned
(but offset by any payments made under any short-term
or long-term disability plan or program maintained by
the Bank) if he had continued working for the Bank
for the remaining unexpired Employment Period at his
final rate of Base Salary;
(v) within 60 days following his termination of
employment with the Bank, a lump sum payment in an
amount equal to the excess, if any, of: (A) the
present value of the benefits to which the Executive
would be entitled under the Bank's Defined Benefit
Pension Plan if he had the additional years of
service that he would have had accrued if he had
continued working for the Bank during the remaining
unexpired Employment Period earning his final rate of
Base Salary during that period, over (B) the present
value of the benefits to which he is actually
entitled under the Bank's Defined Benefit Pension
Plan as of the date of his termination;
(vi) within 60 days following his termination of
employment with the Bank, 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 the Bank's 401(k) Plan and Employee Stock
Ownership Plan if the Executive had continued working
for the Bank for the remaining unexpired Employment
Period assuming (A) the Executive earned his final
rate of Base Salary during that period; (B) made the
maximum amount of employee contributions permitted,
if any, under such plans; and (C) the Bank's
contributions are at least equal to the rate of
contributions made in to the Plan during the plan
year immediately preceding his termination of
employment;
(vii) within 60 days following his termination of
employment with the Bank, a lump sum payment in an
amount equal to the excess, if any, of (A) the
present value of the benefits to which he would be
entitled under the Supplemental Executive Retirement
Plan (and any other deferred compensation plan for
management or highly compensated employees that are
maintained by the Bank), if he had continued working
for the Bank for the remaining unexpired Employment
Period following his termination or employment
earning his final rate of Base Salary during the
remaining unexpired Employment Period, over (B) the
present value of the benefits to which he is actually
entitled under any such plan, as of the date of his
termination of employment with the Bank;
(viii) within 60 days following his termination of
employment with the Bank, a lump sum payment in an
amount equal to two (2) times the average of the
prior two (2) years Incentive Compensation earned or
received by him under all incentive compensation
plans or programs adopted and maintained by the Bank;
and
(ix) stock options shall vest in accordance with the terms
of the stock plan under which they were granted.
(c) Change in Control. Notwithstanding the foregoing, upon the
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termination of the Executive's employment with the Bank following a Change in
Control, the Bank: (1) shall provide the employee benefits described in Section
7(b)(iii) for a period of thirty-six (36) months following the termination of
employment date; (2) shall pay the Executive (or in the event of his death, to
his surviving spouse or such other beneficiary as the Executive may designate in
writing, or if there is neither, to his estate), the amounts described in
Sections 7(b)(iv) through 7(b)(viii) above as if the "remaining unexpired
Employment Period" under the Agreement is thirty-six (36) months from the
termination of employment date; and (3) shall credit the Executive with full
vesting of all stock or stock-based awards granted to the Executive under any
plan adopted by the Bank or the Company.
(d) Damages. The Bank and the Executive hereby stipulate that the
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damages which may be incurred by the Executive following any such termination of
employment are not capable of accurate measurement as of the effective date of
this Agreement and that such liquidated damages constitute reasonable damages
under the circumstances.
(e) OTS Limitation on Severance Pay. Notwithstanding the foregoing, to
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the extent required by regulations or interpretations of the Office of Thrift
Supervision, all severance payments under the Agreement shall be reduced not to
exceed three (3) times the Executive's average annual compensation (as defined
in such regulations or interpretations) over the most recent five (5) taxable
years.
(f) Section 409A Limitation on Severance Pay. Notwithstanding the
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foregoing, to the extent required by Internal Revenue Code section 409A and the
regulations thereunder, if the Executive is a "specified employee" (i.e., a "key
employee" within the meaning of Code Section 416(i) without regard to paragraph
5 thereof), the severance payments described in 7(b)(iv) through (viii) shall be
made to him immediately following the expiration of six (6) months following his
"separation from service" (as defined in Code Section 409A and the regulations
thereunder) with interest determined using the "applicable federal rate"
published by the Internal Revenue Service for the month preceding the
Executive's termination of employment.
8. Termination without Bank Liability
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(a) Termination for Cause.
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(i) The Bank may terminate the Executive's employment at any
time, but any termination other than termination for "cause," as defined herein,
shall not prejudice the Executive's right to compensation or other benefits
under the Agreement. The Executive shall have no right to receive compensation
or other benefits for any period after termination for "cause." Termination for
"cause" shall include termination because of the Executive's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, breach of the Bank's Code of Ethics, material violation of the
Xxxxxxxx-Xxxxx requirements for officers of public companies that in the
reasonable opinion of the Board will likely cause substantial financial harm or
substantial injury to the reputation of the Company or the Bank, willfully
engaging in actions that in the reasonable opinion of the Board will likely
cause substantial financial harm or substantial injury to the business
reputation of the Company or Bank, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than routine traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of the contract. The Bank shall furnish the Executive
with a statement of the grounds for termination for cause and shall afford the
Executive a reasonable opportunity to refute the grounds for the proposed
termination.
(ii) For purposes of this Section, no act or failure to act,
on the part of the Executive, shall be considered "willful" unless it is done,
or omitted to be done, by the Executive in bad faith or without reasonable
belief that the Executive's action or omission was in the best interests of the
Bank. Any act, or failure to act, based upon the direction of the CEO or based
upon the advice of counsel for the Bank shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Bank.
(b) Death; Voluntary Resignation Without Good Reason; Retirement. In
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the event that the Executive's employment with the Bank shall terminate during
the Employment Period on account of any of the reasons set forth in this Section
8(b), then the Bank shall have no further obligations under this Agreement,
other than the payment to the Executive of his earned but unpaid salary as of
the date of the termination of his employment, and the provision of such
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.
Termination of employment under this Section 8(b) shall mean termination of
employment due to the following events:
(i) The Executive's death;
(ii) The Executive's voluntary resignation from employment
with the Bank for any reason other than the "Good
Reasons" specified in Section 7(a)(i); or
(iii) The Executive's "retirement" (i.e., "retirement" is
not a "Good Reason" termination as described in
Section 7(a)(i) that would entitle the Executive to
severance benefits under Section 7(b)).
9. Change in Control
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(a) Except for payments that are subject to Code Section 409A, for
purposes of this Agreement, the term "Change in Control" shall mean:
(i) a change in control of a nature that would be
required to be reported in response to Item 5.01(a)
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 0000 (xxx "Xxxxxxxx
Xxx"); or
(ii) a change in control of the Bank or the Company within
the meaning of the Home Owners Loan Act, as amended
("HOLA"), and applicable rules and regulations
promulgated thereunder, as in effect at the time of
the Change in Control; or
(iii) any of the following events, upon which a Change in
Control shall be deemed to have occurred:
(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 subsection (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 occurs in which the Bank or Company is
not the surviving institution; or
(D) a proxy statement is issued soliciting
proxies from stockholders of the Company by someone
other than the current management of the Company,
seeking stockholder approval of a plan of
reorganization, merger or consolidation of the
Company or similar transaction with one or more
corporations as a result of which the outstanding
shares of the class of securities then subject to the
plan are to be exchanged for or converted into cash
or property or securities not issued by the Company;
or
(E) 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.
(b) With respect to any payments hereunder that are subject to Code
Section 409A, "Change in Control" shall mean (i) a change in the ownership of
the Bank or the Company, (ii) a change in the effective control of the Bank or
Company, or (iii) a change in the ownership of a substantial portion of the
assets of the Bank or Company, as described below.
(1) A change in ownership occurs on the date that any one
person, or more than one person acting as a group (as defined in Proposed
Treasury Regulations section 1.409A-3(g)(5)(v)(B)), acquires ownership of stock
of the Bank or Company that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting power
of the stock of such corporation.
(2) A change in the effective control of the Bank or Company
occurs on the date that either (i) any one person, or more than one person
acting as a group (as defined in Proposed Treasury Regulations section
1.409A-3(g)(5)(vi)(B)) acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Bank or Company possessing 35% or more of the total
voting power of the stock of the Bank or Company, or (ii) a majority of the
members of the Bank's or Company's board of directors is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Bank's or Company's board of directors prior to
the date of the appointment or election, provided that this subsection 9(b)(2)
is inapplicable where a majority shareholder of the Bank or Company is another
corporation.
(3) A change in a substantial portion of the Bank's or
Company's assets occurs on the date that any one person or more than one person
acting as a group (as defined in Proposed Treasury Regulations section
1.409A-3(g)(5)(vii)(C)) acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the Bank or Company that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of (i) all of the
assets of the Bank or Company, or (ii) the value of the assets being disposed
of, either of which is determined without regard to any liabilities associated
with such assets. For all purposes of this subsection 9(b), the definition of
Change in Control shall be construed to be consistent with the requirements of
Proposed Treasury Regulations section 1.409A-3(g)(5), except to the extent that
such proposed regulations are superseded by subsequent guidance.
(c) For purposes of this Agreement, the term "Change in Control Date"
shall mean the first date during the Employment Period on which a Change in
Control occurs. Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with the Bank is terminated and if it is reasonably
demonstrated by the Executive that such termination of Employment (i) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change in Control or (ii) otherwise arose in connection with or anticipation of
a Change in Control, then for all purposes of this Agreement the "Change in
Control Date" shall mean the date immediately prior to the date of such
termination of employment.
10. Confidentiality. Unless he obtains prior written consent from the
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Bank, the Executive shall keep confidential and shall refrain from using for the
benefit of himself, or any person or entity other than the Bank, the Company or
any entity which is a subsidiary or affiliate of the Bank or the Company or of
which the Bank or the Company is a subsidiary or affiliate, any material
document or information obtained from the Bank, the Company or from any of their
respective parents, subsidiaries or affiliates, in the course of his employment
with any of them concerning their properties, operations or business (unless
such document or information is readily ascertainable from public or published
information or trade sources or has otherwise been made available to the public
through no fault of his own) until the same ceases to be material (or becomes so
ascertainable or available); provided, however, that nothing in this Section
shall prevent the Executive, with or without the Bank's or the Company's
consent, from participating in or disclosing documents or information in
connection with any judicial or administrative investigation, inquiry or
proceeding to the extent that such participation or disclosure is required under
applicable law.
11. Non-Solicitation; Non-Competition; Post-Termination Cooperation.
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(a) The Executive hereby covenants and agrees that, for a period of one
year following his termination of employment with the Bank, he shall not,
without the prior 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, the Company
or any of their respective subsidiaries or affiliates to terminate his or her
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 the
counties in which the Bank or the Company has business operations or has filed
an application for regulatory approval to establish an office;
(ii) become an officer, employee, consultant, director,
independent contractor, agent, sole proprietor, joint venturer, greater than 5%
equity-owner or stockholder, partner or trustee of any savings bank, savings and
loan association, savings and loan holding company, credit union, bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other entity competing with the Bank or its affiliates in the same geographic
locations where Provident Bank or its affiliates has material business
interests; provided, however, that this restriction shall not apply if the
Executive's employment is terminated following a Change in Control ; or
(iii) 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 or the Company to terminate an existing business or
commercial relationship with the Bank or the Company.
(b) Executive shall, upon reasonable notice, furnish such information
and assistance to the Bank and/or the Company, as may reasonably be required by
the Bank and/or the Company, in connection with any litigation in which it or
any of its subsidiaries or affiliates is, or may become, a party; provided,
however, that Executive shall not be required to provide information or
assistance with respect to any litigation between the Executive and the Bank,
the Company or any of its subsidiaries or affiliates.
(c) All payments and benefits to the Executive under this Agreement
shall be subject to the Executive's compliance with this Section. The parties
hereto, recognizing that irreparable injury will result to the Bank, its
business and property in the event of the Executive's breach of this Section,
agree that, in the event of any such breach by the Executive, the Bank will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by the Executive and all persons
acting for or with the Executive. The Executive represents and admits that the
Executive's experience and capabilities are such that the Executive can obtain
employment in a business engaged in other lines and/or of a different nature
than the Bank, and that the enforcement of a remedy by way of injunction will
not prevent the Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Bank and the Company from pursuing any other
remedies available to them for such breach or threatened breach, including the
recovery of damages from the Executive.
12. Additional Termination and Suspension Provisions
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(a) If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, as amended (12
U.S.C. 1818(e)(3) and (g)(1)), all obligations of the Bank 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 the Executive all of the compensation withheld while the
Bank's obligations under this Agreement were suspended and (ii) reinstate (in
whole) any of the Bank's obligations which were suspended, and in exercising
such discretion, the Bank shall consider the facts and make a decision promptly
following such dismissal of charges and act in good faith in deciding whether to
pay any withheld compensation to the Executive and to reinstate any suspended
obligations of the Bank.
(b) If the 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) or (g)(1) of the Federal Deposit Insurance Act, as amended (12
U.S.C. 1818 (e)(4) or (g)(1)), all obligations of the bank under this Agreement
shall terminate as of the effective date of the order, but vested rights of the
parties shall not be affected.
(c) If the Bank is in default, as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, as amended (12 U.S.C. 1813 (x)(1)), all
obligations under this Agreement shall terminate as of the date of default, but
this provision shall not affect any vested rights of the 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 the OTS (the "Director")
or his 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) of the Federal Deposit Insurance Act, as amended; or (ii) by the Director
or his designee, at the time the Director or his designee 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. Any rights of the parties that
have already vested, however, shall not be affected by such action.
(e) If any regulation applicable to the Bank shall hereafter be
adopted, amended or modified or if any new regulation applicable to the Bank and
effective after the date of this Agreement:
(i) shall require the inclusion in this Agreement of a
provision not presently included in this Agreement,
then the foregoing provisions of this Section shall
be deemed amended to the extent necessary to give
effect in this Agreement to any such amended,
modified or new regulation; and
(ii) shall permit the exclusion of a limitation in this
Agreement on the payment to the Executive of an
amount or benefit provided for presently in this
Agreement, then the foregoing provisions of this
Section shall be deemed amended to the extent
permissible to exclude from this Agreement any such
limitation previously required to be included in this
Agreement by a regulation prior to its amendment,
modification or repeal.
13. Arbitration. Any dispute or controversy arising out of, under, in
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connection with, or relating to this Agreement and any amendment hereof shall be
submitted to binding arbitration before one arbitrator in Rockland County in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association for expedited arbitration, and any judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof.
14. Indemnification and Insurance.
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(a) The Bank shall provide the Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at the Bank's expense, and shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable 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 an officer
of the Bank (whether or not he continues to be an officer at the time of
incurring such expenses or liabilities and for a period of six years following
his termination of employment with the Bank), 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
CEO). Any such indemnification shall be made consistent with OTS Regulations and
Section 18(K) of the Federal Deposit Insurance Act, 12 U.S.C. ss.1828(K), and
the regulations issued thereunder in 12 C.F.R. Part 359.
(b) Notwithstanding the foregoing, no indemnification shall be made by
the Bank unless the Bank gives the OTS at least 60 days' notice of its intention
to make such indemnification. Such notice shall state the facts on which the
action arose, the terms of any settlement, and any disposition of the action by
a court. Such notice, a copy thereof, and a certified copy of the resolution
containing the required determination by the Board shall be sent to the Regional
Director of the OTS, who shall promptly acknowledge receipt thereof. The notice
period shall run from the date of such receipt. No such indemnification shall be
made if the OTS advises the Bank in writing within such notice period, of its
objection thereto.
15. Notices. The persons or addresses to which mailings or deliveries
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shall be made may change from time to time by notice given pursuant to the
provisions of this Section. Any notice or other communication given pursuant to
the provisions of this Section shall be deemed to have been given (i) if sent by
messenger, upon personal delivery to the party to whom the notice is directed;
(ii) if sent by reputable overnight courier, one business day after delivery to
such courier; (iii) if sent by facsimile, upon electronic or telephonic
confirmation of receipt from the receiving facsimile machine and (iv) if sent by
mail, three business days following deposit in the United States mail, properly
addressed, postage prepaid, certified or registered mail with return receipt
requested. All notices required or permitted to be given hereunder shall be
addressed as follows:
If to the Executive:
------------------------
------------------------
------------------------
If to the Bank: Provident Bank
000 Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx,
President & Chief Executive Officer
With a copy to:
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, PC
0000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
16. Amendment. No modifications of this Agreement shall be valid unless
---------
made in writing and signed by the parties hereto.
17. Miscellaneous.
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(a) Successors and Assigns. This Agreement will inure to the benefit of
----------------------
and be binding upon the Executive, his legal representatives and estate and
intestate distributees, and the Bank, 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. Any such successor of
the Bank shall be deemed to have assumed this Agreement and to have become
obligated hereunder to the same extent as the Bank, and the Executive's
obligations hereunder shall continue in favor of such successor.
(b) 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.
(c) Waiver. Failure to insist upon strict compliance with any 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 or 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.
(d) 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.
(e) Governing Law. This Agreement shall be governed by and construed
--------------
and enforced in accordance with the laws of the State of New York, without
reference to conflicts of law principles, except to the extent governed by
federal law in which case federal law shall govern. Any payments made to the
Executive pursuant to this Agreement or otherwise are subject to all applicable
banking laws and regulations, including, without limitation, 12 USC 1828 (i) and
any regulations promulgated thereunder.
(f) Headings and Construction. 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 specified.
(g) Entire Agreement. 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, including without limitation, the
employment agreement dated as of January 31, 1999 between the Executive and the
Bank and the Company.
(h) Source of Payments. All payments provided in this Agreement shall
------------------
be timely paid in cash or check from the general funds of the Bank.
[Signatures on next page]
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
and the Executive has hereunto set his hand, all as of the Effective Date
specified above.
EXECUTIVE
/s/ Xxxx X. Xxxxxx
------------------- -----------------
Date Xxxx X. Xxxxxx
PROVIDENT BANK
By: /s/ Xxxxxx Xxxxxxxx
------------------- ------------------------------
Date Xxxxxx Xxxxxxxx, President and
Chief Executive Officer
