EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into this 20th day of February, 1996 ("Effective
Date"), by and between Amsterdam Federal Savings and Loan Association (the
"Association") and Xxxx X. Xxxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by the Association as
President & Chief Executive Officer and is experienced in all phases of the
business of the Association; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Association and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as the President &
Chief Executive Officer of the Association. The Employee shall render such
administrative and management services to the Association and any parent or
HOLDING COMPANY or subsidiary as are currently rendered and as are customarily
performed by persons situated in a similar executive capacity. The Employee
shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Association and Parent. The Employee's
other duties shall be such as the Board of Directors for the Association may
from time to time reasonably direct, including normal duties as an officer of
the Association.
2. Base Compensation. The Association agrees to pay the Employee during
the term of this Agreement a salary at the rate of $115,000 per annum, payable
in cash not less frequently than monthly; provided, that the rate of such salary
shall be reviewed by the Board of Directors not less often than annually, and
Employee shall be entitled to receive annually an increase at such percentage or
in such an amount as the Board of Directors in its sole discretion may decide at
such time.
3. Discretionary Bonus. The Employee shall be entitled to participate in
an equitable manner with all other senior management employees of the
Association in discretionary bonuses that may be authorized and declared by the
Board of Directors to its senior management employees from time to time. No
other compensation provided for in this Agreement shall be deemed a substitute
for the Employee's right to participate in such discretionary bonuses when and
as declared by the Board of Directors.
Further, the Employee shall be entitled to receive the benefit of a
Deferred Compensation Agreement previously entered into between Employee and
Association, dated November 26, 1993, under the terms outlined in that
agreement.
4. (a) The Employee shall be entitled to participate in any plan of the
Association relating to pension, profit-sharing, or other retirement benefits
and medical coverage or reimbursement plans that the Association may adopt for
the benefit of its employees. Additionally, Employee's dependent family shall be
eligible to participate in medical and dental insurance plans sponsored by the
Association or Parent with the cost of such premiums paid by the Association.
(b) Employee Benefits; Expenses. The Employee shall be eligible to
participate in any fringe benefits which may be or may become applicable to the
Association's senior management employees, including by example, participation
in any stock option or incentive plans adopted by the Board of directors of
Association or Parent, club memberships, a reasonable expense account, use of a
company owned automobile, and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this
Agreement. The Association shall reimburse Employee for all reasonable
out-of-pocket expenses which Employee shall incur in connection with his service
for the Association.
5. Term. The term of employment of Employee under this Agreement shall be
for the period commencing of the Effective Date and ending thirty-six (36)
months (not to exceed thirty-six (36) months) thereafter. Additionally, on each
annual anniversary date from the Effective Date, the term of employment under
this Agreement shall be extended for an additional one year period beyond the
then effective expiration date upon a determination and resolution of the Board
of Directors that the performance of the Employee has met the requirements and
standards of the Board, and that the term of such Agreement shall be extended.
6. Loyalty; Noncompetition.
(a) The Employee shall devote his full time and attention to the
performance of this employment under this Agreement. During the term of
Employee's employment under this Agreement, the Employee shall not engage in any
business or activity contrary to the business or interests of the Association or
Parent.
(b) Nothing contained in this Paragraph 6 shall be deemed to prevent or
limit the right of Employee to invest in the capital stock or other securities
of any business dissimilar from that of the Association or parent, or, solely as
a passive or minority investor, in any business.
7. Standards. The Employee shall perform his duties under this Agreement in
accordance with such reasonable standards expected of employees with comparable
positions in comparable organization and as may be established from time to time
by the Board of Directors.
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8. Vacation and Sick Leave. At such reasonable times as the Board of
Directors shall in its discretion permit, the Employee shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of his
employment under this Agreement, with all such voluntary absences to count as
vacation time; provided that:
(a) The Employee shall be entitled to annual vacation leave in accordance
with the policies as are periodically established by the Board of Directors for
senior management employees of the Association, which in the case of Employee
shall be a minimum of four weeks.
(b) The Employee shall not be entitled to receive any additional
compensation from the Association on account of his failure to take vacation
leave and Employee shall not be entitled to accumulate unused vacation from one
fiscal year to the next, except in either case to the extent authorized by the
Board of Directors for senior management employees of the Association.
(c) In addition to the aforesaid paid vacations, the Employee shall be
entitled without loss of pay, to absent himself voluntarily from the performance
of his employment with the Association for such additional periods of time and
for such valid and legitimate reasons as the Board of Directors in its
discretion may determine. Further, the Board of Directors shall be entitled to
grant to the Employee a leave or leaves of absence with or without pay at such
time or times and upon such terms and conditions as the Board of Directors in
its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick leave
benefit as established by the Board of Directors for senior management employees
of the Association. In the event that any sick leave benefit shall not have been
used during any year, such leave shall accrue to subsequent years only to the
extent authorized by the Board of Directors for employees of the Association.
9. Termination and Termination Pay.
The Employee's employment under this Agreement shall be terminated upon
any of the following occurrences:
(a) The death of the Employee during the term of this Agreement, in which
event the Employee's estate shall be entitled to receive the compensation due
the Employee through the last day of the calendar month in which Employee's
death shall have occurred, and for three months thereafter.
(b) The Board of Directors may terminate the Employee's employment at any
time, but any termination by the Board of
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Directors other than termination for Just Cause, shall not prejudice the
Employee's right to compensation or other benefits under the Agreement. The
Employee shall have no right to receive compensation or other benefits for any
period after termination for Just Cause. Termination for "Just Cause" shall
include termination because of the Employee'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 the Agreement.
(c) Except as provided pursuant to Section 12 herein, in the event
Employee's employment under this Agreement is terminated by the Board of
Directors without Just Cause, the Association shall be obligated to continue to
pay the Employee the salary provided pursuant to Section 2 herein, up to the
date of termination of the term (including any renewal term) of this Agreement
and the cost of Employee obtaining all health, life, disability, and other
benefits which the Employee would be eligible to participate in through such
date based upon the benefit levels substantially equal to those being provided
Employee at the date of termination of employment.
(d) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order issued
under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA")
(12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Association under this
Agreement shall terminate, as of the effective date of the order, but the vested
rights of the parties shall not be affected.
(e) If the Association is in default (as defined in Section 3(x)(1) of
FDIA) all obligations under this Agreement shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of the
contracting parties.
(f) 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 Association: (i) by the Director of the Office of
Thrift Supervision ("Director of OTS"), or his or her designee, at the time that
the Federal Deposit Insurance Corporation ("FDIC") or the Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of
the Association under the authority contained in Section 13(c) of FDIA; or (ii)
by the Director of the OTS, or his or her designee, at the time that the
Director of the OTS, or his or her designee approves a supervisory merger to
resolve problems related to operation of the Association or when the Association
is determined by the Director of the OTS 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.
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(g) The voluntary termination by the Employee during the term of this
Agreement with the delivery of no less than 60 days written notice to the Board
of Directors, other than pursuant to Section 12(b), in which case the Employee
shall be entitled to receive only the compensation, vested rights, and all
employee benefits up to the date of such termination.
(h) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ss.1828(k) and any regulations
promulgated thereunder.
10. Suspension of Employment . If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Association's
affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) and (g)(1)), the Association's obligations under the Agreement
shall be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Association shall,
(i) pay the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.
11. Disability. If the Employee shall become disabled or incapacitated to
the extent that he is unable to perform his duties hereunder, by reason of
medically determinable physical or mental impairment, as determined by a doctor
engaged by the Board of Directors, Employee shall nevertheless continue to
receive the compensation and benefits provided under the terms of this Agreement
as follows: 100% of such compensation and benefits for a period of 12 months,
but not exceeding the remaining term of the Agreement, and 65% thereafter for
the remainder of the term of the Agreement. Such benefits noted herein shall be
reduced by any benefits otherwise provided to the Employee during such period
under the provisions of disability insurance coverage in effect for Association
employees. Thereafter, Employee shall be eligible to receive benefits provided
by the Association under the provisions of disability insurance coverage in
effect for Association employees. Upon returning to active full-time employment,
the Employee's full compensation as set forth in the Agreement shall be
reinstated as of the date of commencement of such activities. In the event that
the Employee returns to active employment on other than a full-time basis, then
his compensation (as set forth in Paragraph 2 of this Agreement) shall be
reduced in proportion to the time spent in said employment, or as shall
otherwise be agreed to by the parties.
12. Change in Control.
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or
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within twelve (12) months after, any change in control of the Association or
Parent, Employee shall be paid an amount equal to the product of 2.99 times the
Employee's "base amount" as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code") and regulations promulgated
thereunder. Said sum shall be paid, at the option of Employee, either in one (1)
lump sum within thirty (30) days of such termination discounted to the present
value of such payment using as the discount rate the "prime rate" as published
in the Wall Street Journal Eastern Edition as of the date of such payment, or in
periodic payments over the next 36 months or the remaining term of this
Agreement whichever is less, as if Employee's employment had not been
terminated, and such payments shall be in lieu of any other future payments
which the Employee would be otherwise entitled to receive under Section 9 of
this Agreement. Notwithstanding the forgoing, all sums payable hereunder shall
be reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments to be made to the Employee by
the Association or the Parent shall be deemed an "excess parachute payment" in
accordance with Section 280G of the Code and be subject to the excise tax
provided at Section 4999(a) of the Code. The term "control" shall refer to the
ownership, holding or power to vote more than 25% of the Parent's or
Association's voting stock, the control of the election of a majority of the
Parent's or Association's directors, or the exercise of a controlling influence
over the management or policies of the Parent or Association by any person or by
persons acting as a group within the meaning of Section 13(d) of the Securities
Exchange Act of 1934. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary,
Employee may voluntary terminate his employment under this Agreement within
twelve (12) months following a change in control of the Association or Parent,
and Employee shall thereupon be entitled to receive the payment described in
Section 12(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Association or
Parent, Employee would be required to report to a person or persons other than
the Board of the Association or Parent; (iii) if the Association or Parent
should fail to maintain Employee's base compensation in effect as of the date of
the Change in Control and the existing employee benefits plans, including
material fringe benefit, stock option and retirement plans; (iv) if Employee
would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein;
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(v) if Employee would not be elected or reelected to the Board of Directors of
the Association; or (vi) if Employee's responsibilities or authority have in any
way been materially diminished or reduced.
(c) Arbitration. Any controvery or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Association,
and judgment upon the award rendered may be entered in any court having
jurisdiction hereof, except to the extent that the parties may otherwise reach a
mutual settlement of such issue. The Association shall incur the cost of all
fees and expenses associated with filing a request for arbitration with the AAA,
whether such filing is made on behalf of the Association or the Employee, and
the costs and administrative fees associated with employing the arbitrator and
related administrative expenses assessed by the AAA. The Association shall
reimburse Employee for all costs and expenses, including reasonable attorney's
fees, arising from such dispute, proceedings or actions, notwithstanding the
ultimate outcome thereof, following the delivery of the decision of the
arbitrator or upon delivery of other legal judgment or settlement of the matter.
Such reimbursement shall be paid within ten (10) days of Employee furnishing to
the Association or Parent evidence, which may be in the form, among other
things, of a canceled check or receipt, of any costs or expenses incurred by the
Employee. Any such request for reimbursement by Employee shall be made no more
frequently than at sixty (60) day intervals.
13. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Association or Parent which shall acquire,
directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Association or Parent.
(b) Since the Association is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Association.
14. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
15. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of New York, except to the extent that Federal law shall be
deemed to apply.
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16. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
17. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
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