EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
effective this 24th day of November 2008, among WVS Financial Corp. (the
"Corporation"), a Pennsylvania-chartered corporation, West View Savings Bank
(the "Savings Bank"), a Pennsylvania-chartered savings bank and a wholly-owned
subsidiary of the Corporation, and Xxxxx X. Xxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and
the Savings Bank (together the "Employers");
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the
business of the Employers;
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;
WHEREAS, the Employers entered into a written agreement on October 1,
1998 with respect to the employment of the Executive (the "Prior Agreement");
WHEREAS, the Employers and the Executive believe certain revisions to
the Prior Agreement are appropriate, including amending and restating the Prior
Agreement in its entirety as hereinafter set forth in order to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code"); and
WHEREAS, this Agreement supersedes in its entirety the Prior Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, 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) Base Salary. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(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 or material breach of any provision of the Agreement. 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 Executive not in good faith and without
reasonable belief that the Executive's action or omission was in the best
interest of the Employers.
(c) Change in Control. "Change in Control" shall mean a change in the
ownership of the Corporation or the Savings Bank, a change in the effective
control of the Corporation or the Savings Bank or a change in the ownership of a
substantial portion of the assets of the Corporation or the Savings Bank, in
each case as provided under Section 409A of the Code and the regulations
thereunder.
(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. "Disability" shall mean the Executive (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months, or (ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Employers.
(g) Effective Date. The Effective Date of this Agreement shall mean the
date first written above.
(h) Good Reason. "Good Reason" means the occurrence of any of the
following events:
(i) any material breach of this Agreement by the Employers,
including without limitation any of the following: (A) a material
diminution in the Executive's base compensation, (B) a material
diminution in the Executive's authority, duties or responsibilities as
prescribed in Section 2, or (C) any requirement that the Executive
report to a corporate officer or employee of the Employers instead of
reporting directly to the Boards of Directors of the Employers, or
(ii) any material change in the geographic location at which
the Executive must perform his services under this Agreement;
provided, however, that prior to any termination of employment for Good
Reason, the Executive must first provide written notice to the
Employers within ninety (90) days of the initial existence of the
condition, describing the existence of such condition, and the
Employers shall thereafter have the right to remedy the condition
within thirty (30) days of the date the Employers received the written
notice from the Executive. If the Employers remedy the condition within
such thirty (30) day cure period, then no Good Reason shall be deemed
to exist with respect to such condition. If the Employers do not
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remedy the condition within such thirty (30) day cure period, then the
Executive may deliver a Notice of Termination for Good Reason at any
time within sixty (60) days following the expiration of such cure
period.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) 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 a 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 the 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
that any termination of the Executive's employment for Cause shall be effective
immediately, and (iv) is given in the manner specified in Section 10 hereof.
(k) Retirement. Termination of the Executive's employment based on
"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. Term of Employment.
(a) The Employers hereby employ the Executive as President and Chief
Executive Officer and the Executive hereby accepts said employment and agrees to
render such services to the Employers on the terms and conditions set forth in
this Agreement. The term of employment under this Agreement shall be for three
years from the Effective Date and, subject to the requirements of the succeeding
sentence, shall be deemed automatically, without further action, beginning on
the day following the Effective Date of this Agreement and on each day
thereafter, to extend for a period of one day in addition to the then-remaining
term, such that at any time the remaining term of this Agreement shall be three
years, absent notice to the contrary. Prior to the first annual anniversary of
the Effective Date of this Agreement and each annual anniversary thereafter, the
Board of Directors of the Employers shall consider and review (with appropriate
corporate documentation thereof, and after taking into account all relevant
factors, including the Executive's performance hereunder) extension of the term
under this Agreement, and the term shall continue to extend in the manner set
forth above unless either the Board of Directors of the Corporation or the
Savings Bank does not approve such extension and provides written notice to the
Executive of such event or the Executive gives written notice to the Employers
of the Executive's election not to extend the term, in each case with such
written notice to be given not less than thirty (30) days prior to any such
anniversary date. References herein to the term of this Agreement shall refer
both to the initial term and successive terms.
(b) During the term of this Agreement, the Executive shall manage the
operations of the Employers and oversee the officers that report to him. The
Executive shall also oversee the implementation of the policies adopted by the
Boards of Directors of the Employers and shall report directly to the Boards of
Directors. In addition, the Executive shall perform such
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executive services for the Employers as may be consistent with his titles and
from time to time assigned to him by the Employers' Board of Directors.
3. Compensation and Benefits.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $255,750
per year ("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Boards of Directors of the Employers and may
not be decreased without the Executive's express written consent. In addition to
his Base Salary, the Executive shall be entitled to receive during the term of
this Agreement such bonus payments as may be determined by the Boards of
Directors of the Employers.
(b) As President and Chief Executive Officer, the Executive shall be
entitled to participate in and receive the benefits of any pension or other
retirement benefit plan, profit sharing, stock option, employee stock ownership,
or other plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change in the rights of or
benefits to the Executive as compared with any other executive officer of the
Employers. Nothing paid to the Executive under any plan or arrangement presently
in effect or made available in the future shall be deemed to be in lieu of the
salary payable to the Executive pursuant to Section 3(a) hereof.
(c) During the term of this Agreement, the Executive shall be entitled
to paid annual vacation in accordance with the policies as established from time
to time by the Boards of Directors of the Employers, which shall in no event be
less than four weeks per annum. The Executive shall not be entitled to receive
any additional compensation from the Employers for failure to take a vacation,
nor shall the Executive be able to accumulate unused vacation time from one year
to the next, except to the extent authorized by the Boards of Directors of the
Employers.
(d) The Executive's compensation, benefits, severance and expenses
shall be paid by the Corporation and the Bank in the same proportion as the time
and services actually expended by the Executive on behalf of each respective
Employer.
4. Expenses. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of, or in connection with the business of the Employers, including,
but not by way of limitation, automobile and traveling expenses, and all
reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Boards of
Directors of the Employers. If such expenses are paid in the first instance by
the Executive, the Employers shall reimburse the Executive therefor. Such
reimbursement shall be paid promptly by the Employers and in any event no later
than March 15 of the year immediately following the year in which such expenses
were incurred.
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5. Termination.
(a) The Employers shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by
the Employers for Cause, Retirement or the Executive's death, or (ii) the
Executive terminates his employment hereunder for any reason other than
Disability or Good Reason, the Executive shall have no right pursuant to the
terms of this Agreement to compensation or other benefits for any period after
the applicable Date of Termination.
(c) In the event the Executive's employment hereunder is terminated due
to Disability, the Executive shall be entitled to receive any disability
benefits provided under any disability plan maintained by the Employers. Other
than as set forth above, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the termination
for Disability.
(d) If the Executive's employment by the Employers shall be terminated
concurrently with or subsequent to a Change in Control and during the term of
this Agreement 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, within thirty (30) days following
the Date of Termination, a lump sum cash severance amount equal to
three (3) times the Executive's Base Salary,
(B) maintain and provide for a period ending at the earlier of
(i) the expiration of the remaining term of employment as of the Date
of Termination before giving effect to the Notice 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 and disability insurance offered by the
Employers in which the Executive was participating immediately prior to
the Date of Termination; provided that any insurance premiums payable
by the Employers or any successors pursuant to this Section 5(d)(B)
shall be payable at such times and in such amounts (except that the
Employers shall also pay any employee portion of the premiums) as if
the Executive was still an employee of the Employers, subject to any
increases in such amounts imposed by the insurance company or COBRA,
and the amount of insurance premiums required to be paid by the
Employers in any taxable year shall not affect the amount of insurance
premiums required to be paid by the Employers in any other taxable
year; and provided further that if the Executive's participation in any
group insurance plan is barred, the Employers shall either arrange to
provide the Executive with insurance benefits substantially similar to
those which the Executive was entitled to receive under such group
insurance plan or, if such coverage cannot be
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obtained, pay a lump sum cash equivalency amount within thirty (30)
days following the Date of Termination based on the annualized rate of
premiums being paid by the Employers as of the Date of Termination; and
(C) pay to the Executive, in a lump sum within thirty (30)
days following the Date of Termination, a cash amount equal to the
projected cost to the Employers of providing benefits to the Executive
until the expiration of the remaining term of employment as of the Date
of Termination before giving effect to the Notice of Termination
pursuant to any other employee benefit plans, programs or arrangements
offered by the Employers in which the Executive was entitled to
participate immediately prior to the Date of Termination (other than
stock option plans and restricted stock plans of the Employers), with
the projected cost to the Employers to be based on the costs incurred
for the calendar year immediately preceding the year in which the Date
of Termination occurs and with any automobile-related costs to exclude
any depreciation on Employer-owned automobiles.
(e) If the Executive's employment shall be terminated prior to a Change
in Control 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, within thirty (30) days following
the Date of Termination, a lump sum cash severance amount equal to two
(2) times the Executive's Base Salary,
(B) maintain and provide for a period ending at the earlier of
(i) the expiration of eighteen (18) months from the Executive's 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 health insurance plans
offered by the Employers in which the Executive was participating
immediately prior to the Date of Termination; provided that any
insurance premiums payable by the Employers or any successors pursuant
to this Section 5(e)(B) shall be payable at such times and in such
amounts (except that the Employers shall also pay any employee portion
of the premiums) as if the Executive was still an employee of the
Employers, subject to any increases in such amounts imposed by the
insurance company or COBRA, and the amount of insurance premiums
required to be paid by the Employers in any taxable year shall not
affect the amount of insurance premiums required to be paid by the
Employers in any other taxable year; and provided further that if the
Executive's participation in any group insurance plan is barred, the
Employers shall either arrange to provide the Executive with insurance
benefits substantially similar to those which the Executive was
entitled to receive under such group insurance plan or, if such
coverage cannot be obtained, pay a lump sum cash equivalency amount
within thirty (30) days following the Date of Termination based on the
annualized rate of premiums being paid by the Employers as of the Date
of Termination. The Executive shall not be entitled to participate in
any other employee benefit plan, program or arrangement of the
Employers subsequent to his Date of Termination.
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6. Payment of Additional Benefits under Certain Circumstances.
(a) If the payments and benefits pursuant to Section 5 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 Corporation shall pay to the Executive, in a lump sum within thirty
(30) days following the Date of Termination, a cash amount equal to the sum of
the following:
(i) 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"; and
(ii) such additional amount (tax allowance) as may be necessary to
compensate the Executive for the payment by the Executive of federal, state and
local income and excise taxes on the payment provided under clause (i) above and
on any payments under this clause (ii). In computing such tax allowance, the
payment to be made under clause (i) above shall be multiplied by the "gross up
percentage" ("GUP"). The GUP shall be determined as follows:
GUP = Tax Rate
----------
1-Tax Rate
The Tax Rate for purposes of computing the GUP shall be the highest marginal
federal, state and local income and employment-related tax rate (including
Social Security and Medicare taxes), including any applicable excise tax rate,
applicable to the Executive in the year in which the payment under clause (i)
above is made, and shall also reflect the phase-out of deductions and the
ability to deduct certain of such taxes.
(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 Corporation's
independent tax counsel shall determine the amount (the "Adjustment Amount")
which either the Executive must pay to the Corporation or the Corporation must
pay to the Executive in order to put the Executive (or the Corporation, as the
case may be) in the same position the Executive (or the Corporation, 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 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, and in no event more than thirty
(30) days after the Adjustment Amount has been determined, the Corporation shall
pay the Adjustment Amount to the Executive or the Executive shall repay the
Adjustment Amount to the Corporation, as the case may be.
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(c) In each calendar year that the Executive receives payments of
benefits that constitute a parachute amount, the Executive shall report on his
federal, state and local income tax returns such information as is consistent
with the determination made by the independent tax counsel of the Corporation as
described above. The Corporation shall indemnify and hold 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, with such indemnification
to be paid by the Corporation to the Executive as soon as practicable and in any
event no later than March 15 of the year immediately following the year in which
the amount subject to indemnification was determined. The Executive shall
promptly notify the Corporation 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 6 is being reviewed or is in
dispute. The Corporation 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 6), and the Executive shall cooperate fully with the Corporation in any
such proceeding. The Executive shall not enter into any compromise or settlement
or otherwise prejudice any rights the Corporation may have in connection
therewith without the prior consent of the Corporation.
7. 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, except as set forth in Sections 5(d)(B) and 5(e)(B)
above.
(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.
8. 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.
9. 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 the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
their 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.
10. 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
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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:
To the Employers: Chairman of the Board
WVS Financial Corp.
West View Savings Bank
0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
To the Executive: Xxxxx X. Xxxxxx
At the address last appearing on the
personnel records of the Employers
11. Amendment; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing 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. In addition, notwithstanding anything in this Agreement to the
contrary, the Employers may amend in good faith any terms of this Agreement,
including retroactively, in order to comply with Section 409A of the Code.
12. 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 Commonwealth of
Pennsylvania.
13. Nature of Obligations. 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.
14. 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.
15. 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.
16. Changes in Statutes or Regulations. If any statutory or regulatory
provision referenced herein is subsequently changed or re-numbered, or is
replaced by a separate provision, then the references in this Agreement to such
statutory or regulatory provision shall be deemed to be a reference to such
section as amended, re-numbered or replaced.
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17. 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.
18. 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.
19. 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, including but not limited to the Prior Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
ATTEST: WVS FINANCIAL CORP.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxx Xxxxx X. Xxxxxxx
Title: Corporate Secretary Chairman of the Board
ATTEST: WEST VIEW SAVINGS BANK
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxx Xxxxx X. Xxxxxxx
Title: Corporate Secretary Chairman of the Board
EXECUTIVE
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
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