AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") is made
effective as of September 30, 2008 (the "Effective Date"), by and between ESSA
Bank & Trust, a Pennsylvania chartered stock savings association with its
principal office in Stroudsburg, Pennsylvania (the "Bank"), and Xxxxx X. Xxxxxx
("Executive"). Any reference to the "Company" shall mean ESSA Bancorp, Inc., a
stock holding company which owns 100% of the common stock of the Bank.
WHEREAS, the Executive is currently employed as Vice President, Delivery
Systems Division of the Bank pursuant to an employment agreement that was
effective March 31, 2007 (the "Original Agreement"); and
WHEREAS, the Bank desires to amend and restate the Original Agreement in
order to make changes to comply with the final regulations issued under Section
409A of the Internal Revenue Code of 1986, as amended (the "Code"), in April,
2007; and
WHEREAS, Executive is willing to serve the Bank on the terms and conditions
hereinafter set forth and has agreed to such changes; and
WHEREAS, the Board of Directors of the Bank and the Executive believe it is
in the best interests of the Bank to enter into the Agreement in order to
reinforce and reward the Executive for her service and dedication to the
continued success of the Bank and incorporate the changes required by the final
regulations under Code Section 409A.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the period of her employment hereunder, Executive agrees to serve as
Vice President, Delivery Systems Division of the Bank (the "Executive
Position"). Executive shall be responsible for the overall management of the
Bank's administrative services functions, and shall be responsible for
establishing the business objectives, policies and strategic plans in
conjunction with the Chief Executive Officer (the "CEO").
2. TERM AND DUTIES.
(a) Two Year Contract; Annual Renewal. Executive's period of employment
with the Bank ("Employment Period") shall begin on the Effective Date and shall
renew on each anniversary date thereafter, until the date that the Bank gives
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 foregoing, all changes to the
Agreement intended to comply with Code Section 409A shall be retroactively
effective to March 31, 2007; then provided further that no retroactive change
shall affect the compensation or benefits previously provided to the Executive.
(b) Annual Performance Evaluation. On either a fiscal year or calendar year
basis, (consistently applied from year to year), the Bank shall conduct an
annual evaluation of Executive's performance. 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.
Nothing in this Agreement shall mandate or prohibit a continuation of
Executive's employment following the expiration of the Employment Period upon
such terms and conditions as the Bank and Executive may mutually agree.
(d) Duties; Membership on Other Boards. During the Employment Period,
except for periods of absence occasioned by illness, reasonable vacation
periods, and reasonable leaves of absence approved by the CEO, Executive shall
devote substantially all her business time, attention, skill, and efforts to the
faithful performance of her duties hereunder including activities and services
related to the organization, operation and management of the Bank; provided,
however, that, with the approval of the CEO, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or positions
in, business companies or business organizations, which, in the CEO's judgment,
will not present any conflict of interest with the Bank, or materially affect
the performance of Executive's duties pursuant to this Agreement it being
understood that membership in and service on boards or committees of social,
religious, charitable or similar organizations does not require CEO approval
pursuant to this Section 2(d). For purposes of this Section 2(d), CEO approval
shall be deemed to have been granted as to service with any such business
company or organization that Executive was serving as of the date of this
Agreement.
3. COMPENSATION, BENEFITS AND REIMBURSEMENT.
(a) Base Salary. The compensation specified under this Agreement shall
constitute the salary and benefits paid for the duties described in Section 2.
The Bank shall pay Executive as compensation a salary of not less than $108,227
per year ("Base Salary"). Such Base Salary shall be payable biweekly, or with
such other frequency as officers and employees are generally paid. During the
period of this Agreement, Executive's Base Salary shall be reviewed at least
annually. Such review may be conducted by the CEO, and the Bank may increase,
but not decrease (except a decrease that is generally applicable to all
employees) Executive's Base Salary (with any increase in Base Salary to become
"Base Salary" for purposes of this Agreement).
(b) Bonus and Incentive Compensation. Executive will be entitled to
incentive compensation and bonuses as provided in any plan of the Bank in which
Executive is eligible to participate. Nothing paid to Executive under any such
plan or arrangement will be deemed to be in lieu of other compensation to which
Executive is entitled under this Agreement.
(c) Employee Benefits. The Bank will provide Executive with employee
benefit plans, arrangements and perquisites substantially equivalent to those in
which Executive was participating or otherwise deriving benefit from immediately
prior to the beginning of the term of this Agreement, and the Bank will not,
without Executive's prior written consent, make any changes in such plans,
2
arrangements or perquisites which would adversely affect Executive's rights or
benefits thereunder, except as to any changes that are applicable to all
participating employees or as reasonably or customarily available. Without
limiting the generality of the foregoing provisions of this Section 3(c),
Executive will be entitled to participate in or receive benefits under any
employee benefit plans including, but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident insurance plans, medical coverage or any other employee
benefit plan or arrangement made available by the Bank in the future to its
senior executives, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.
(d) Paid Time Off. Executive shall be entitled to 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 be
treated in accordance with the Bank's personnel policies as in effect from time
to time.
(e) Expense Reimbursements. During the Employment Period, the Bank shall
pay or reimburse Executive for all reasonable travel, entertainment and other
reasonable expenses incurred by Executive during the course of performing her
obligations under this Agreement, upon presentation to the Bank of an itemized
account of such expenses in such form as the Bank may reasonably require. All
reimbursements under this Section 3(e) shall be paid as soon as practicable by
the Bank; provided, however, that no payment shall be made later than March 15
of the year immediately following the year in which the expense was incurred.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during Executive's term of employment under this Agreement, the provisions of
this section shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following:
(i) the termination by the Bank of Executive's full-time employment
hereunder for any reason other than a Termination for Cause, as defined in
Section 8 hereof, or a termination upon Retirement as defined in Section 7
hereof, or a termination for Disability as set forth in Section 6 hereof; and
(ii) Executive's resignation from the Bank's employ upon any of
the following (which shall be treated as termination of employment for "Good
Reason"), unless consented to by Executive:
(A) failure to appoint Executive to the Executive Position
set forth in Section 1 above, or a material change in Executive's function,
duties, or responsibilities, which change would cause Executive's position to
become one of lesser responsibility, importance, or scope from the position and
responsibilities described in Section 1 above, to which Executive has not agreed
in writing (and any such material change shall be deemed a continuing breach of
this Agreement);
3
(B) a relocation of Executive's principal place of
employment to a location that is more than 50 miles from the location of the
Bank's principal executive offices as of the date of this Agreement;
(C) a material reduction in the benefits and perquisites,
including Base Salary, to Executive from those being provided as of the
Effective Date (except for any reduction that is part of a reduction in pay or
benefits that is generally applicable to officers or employees);
(D) a liquidation or dissolution of the Bank other than
liquidations or dissolutions that are caused by reorganizations that do not
affect the status of the Executive; or
(E) a material breach of this Agreement by the Bank.
Upon the occurrence of any event described in clause (ii) above, Executive shall
have the right to elect to terminate her employment under this Agreement by
resignation within 90 days after the event giving rise to said right to elect,
which termination by Executive shall be an Event of Termination. The Bank shall
have at least 30 days to remedy any event set forth in clauses (ii)(A) through
(E) above; provided, however, that the Bank shall be entitled to waive such
period and make an immediate payment hereunder. If the Bank remedies the
condition within such 30 day cure period, then no Good Reason shall be deemed to
exist with respect to such event. If the Bank does not remedy the event within
such 30 days cure period, then the Executive may deliver a Notice of
Termination, as defined in Section 9(c), for Good Reason at any time within 60
days following the expiration of such cure period.
(iii) Executive's resignation from the Bank's employ following a
Change in Control (as defined below in Section 5).
No payments or benefits shall be due to Executive under this Agreement upon
the termination of Executive's employment except as provided in Section 4 or 5
hereof.
(b) Within 30 days following the occurrence of an Event of Termination, the
Bank shall pay Executive, or, in the event of her subsequent death, her
beneficiary or beneficiaries, or her estate, as the case may be, as severance
pay or liquidated damages, or both, a lump sum cash amount equal to two times
the sum of (i) the highest annual rate of Base Salary paid to Executive at any
time under the Agreement, plus (ii) the highest bonus paid to Executive with
respect to the two completed fiscal years prior to the Event of Termination.
Such payments shall not be reduced in the event Executive obtains other
employment following termination of employment.
(c) Within 30 days following the occurrence of an Event of Termination, the
Bank shall pay Executive, or in the event of her subsequent death, her
beneficiary or beneficiaries, or her estate, as the case may be, a lump sum
equal to the excess, if any, of the present value of the benefit that Executive
would have been entitled to under the Bank's defined benefit pension plan if
Executive had continued working for the Bank for twenty-four (24) months after
the effective date of such Event of Termination, over the present value of the
benefits to which Executive was actually entitled as of the effective date of
such Event of Termination.
(d) Upon the occurrence of an Event of Termination, the Bank will provide
at the Bank's expense, life insurance and non-taxable medical, dental and vision
coverage substantially comparable, as reasonably or customarily available, to
4
the coverage maintained by the Bank for Executive prior to her termination,
except to the extent such coverage may be changed in its application to all Bank
employees. Such coverage shall cease twenty-four (24) months following the Event
of Termination.
(e) Notwithstanding the foregoing, in the event the Executive is a
Specified Employee (as defined herein), solely to the extent necessary to avoid
penalties under Code Section 409A, payment of the Executive's benefit pursuant
to Sections 4(b), 4(c) and 4(d), if applicable, shall be made to the Executive
on the first day of the seventh month following the Executive's Event of
Termination. "Specified Employee" shall be interpreted to comply with Code
Section 409A and shall mean a key employee within the meaning of Code Section
416(i) (without regard to paragraph 5 thereof), but an individual shall be a
"Specified Employee" only if the Bank or any affiliate is a publicly traded
company.
(f) For purposes of this Agreement, Event of Termination shall be construed
to required a "Separation from Service" as defined in Code Section 409A and the
Treasury regulations promulgated thereunder, such that the Bank and Executive
reasonably anticipate that the level of bona fide services Executive would
perform after termination would permanently decrease to a level that is less
than 50% of the average level of bona fide services performed (whether as an
employee or an independent contractor) over the immediately preceding 36-month
period.
5. CHANGE IN CONTROL.
(a) 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 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
5
under an Incumbent Board, shall be, for purposes of this subsection (B),
considered as though she were a member of the Incumbent Board; or
(C) a sale of all or substantially all the assets of the Bank or
the Company, or a plan of reorganization, merger, consolidation, or similar
transaction occurs in which the security holders of the Company immediately
prior to the consummation of the transaction do not own at least 50.1% of the
securities of the surviving entity to be outstanding upon consummation of the
transaction; 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) Notwithstanding the preceding paragraphs of this Section, in the event
that the aggregate payments or benefits to be made or afforded to Executive in
the event of a Change in Control would be deemed to include an "excess parachute
payment" under Section 280G of the Code or any successor thereto, then the cash
severance payable under Section 4 shall be reduced by the minimum amount
necessary to result in no portion of the payments and benefits payable by the
Bank under Section 4 being non-deductible pursuant to Code Section 280G and
subject to an excise tax imposed under Code Section 4999.
6. TERMINATION FOR DISABILITY OR DEATH.
(a) Termination of Executive's employment based on "Disability" shall be
construed to comply with Code section 409A and shall be deemed to have occurred
if (i) the Executive 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 last for a continuous period of not less than 12
months; (ii) by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last for a continuous
period of not less than 12 months, the Executive is receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering employees of the Bank; or (iii) the Executive is determined to be
totally disabled by the Social Security Administration. The provisions of
paragraph 6(b) and (c) shall apply upon the termination of the Executive's
employment for Disability.
(b) The Executive shall be entitled to receive benefits under any short or
long term disability plan maintained by the Bank. To the extent such benefits
are less than the Executive's Base Salary, the Bank will pay Executive an amount
equal to the difference between such disability plan benefits and the amount of
Executive's Base Salary for the longer of (i) the remaining term of the
6
Agreement or (ii) one year following her termination of employment due to
Disability. Any payments required hereunder shall be payable in monthly
installments and shall commence within 30 days following the date on which
Executive is determined to be Disabled.
(c) The Bank will cause to be continued life insurance and non-taxable
medical, dental and vision coverage substantially comparable, as reasonable or
customarily available, to the coverage maintained by the Bank for Executive
prior to her termination for Disability, except to the extent such coverage may
be changed in its application to all Bank employees or not available on an
individual basis to an employee terminated for Disability. This coverage shall
cease upon the earlier of (i) the date Executive returns to the full-time
employment of the Bank; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive's death.
(d) In the event of Executive's death during the term of the Agreement, her
estate, legal representatives or named beneficiaries (as directed by executive
in writing) shall be paid Executive's Base Salary as defined in paragraph 3(a)
at the rate in effect at the time of Executive's death for a period of one (1)
year from the date of Executive's death, and the Bank will continue to provide
non-taxable medical, dental, vision and other insurance benefits normally
provided for Executive's family (in accordance with its customary co-pay
percentages) for one (1) year after Executive's death. Such payments are in
addition to any other life insurance benefits that the Executive's beneficiaries
may be entitled to receive under any employee benefit plan maintained by the
Bank for the benefit of the Executive, including, but not limited to, the Bank's
tax-qualified retirement plans and the Executive Salary Continuation Agreement
(SERP).
7. TERMINATION UPON RETIREMENT.
Termination of Executive's employment based on "Retirement" shall mean
termination of Executive's employment at age 65 or in accordance with any
retirement policy established by the Board with Executive's consent with respect
to her. Upon termination of Executive based on Retirement, no amounts or
benefits shall be due Executive under this Agreement, and Executive shall be
entitled to all benefits under any retirement plan of the Bank and other plans
to which Executive is a party.
8. TERMINATION FOR CAUSE.
(a) 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, material 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 CEO or the Board will likely cause substantial
7
financial harm or substantial injury to the reputation of the Bank, willfully
engaging in actions that in the reasonable opinion of the CEO or the Board will
likely cause substantial financial harm or substantial injury to the business
reputation of the 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 Agreement.
(b) For purposes of this Section 8, 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.
9. NOTICE.
(a) Any purported termination by the Bank for Cause shall be communicated
by Notice of Termination to Executive. If, within 30 days after any Notice of
Termination for Cause is given, Executive notifies the Bank that a dispute
exists concerning the termination, the parties shall promptly proceed to
arbitration. Notwithstanding the pendency of any such dispute, the Bank shall
discontinue paying Executive's compensation until the dispute is finally
resolved in accordance with this Agreement. If it is determined that Executive
is entitled to compensation and benefits under Section 4 of this Agreement, the
payment of such compensation and benefits by the Bank shall commence immediately
following the date of resolution by arbitration, with interest due Executive on
the cash amount that would have been paid pending arbitration (at the prime rate
as published in The Wall Street Journal from time to time).
(b) Any other purported termination by the Bank or by Executive shall be
communicated by a Notice of Termination to the other party. If, within 30 days
after any Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the parties shall promptly proceed to arbitration as provided in
Section 19 of this Agreement. Notwithstanding the pendency of any such dispute,
the Bank shall continue to pay Executive her Base Salary, and other compensation
and benefits in effect when the notice giving rise to the dispute was given
(except as to termination of Executive for Cause); provided, however, that such
payments and benefits shall not continue beyond the date that is 24 months from
the date the Notice of Termination is given. In the event the voluntary
termination by Executive of her employment is disputed by the Bank, and if it is
determined in arbitration that Executive is not entitled to termination benefits
pursuant to this Agreement, she shall return all cash payments made to her
pending resolution by arbitration, with interest thereon at the prime rate as
published in The Wall Street Journal from time to time if it is determined in
arbitration that Executive's voluntary termination of employment was not taken
in good faith and not in the reasonable belief that grounds existed for her
voluntary termination. If it is determined that the Executive is entitled to
receive severance benefits under this Agreement, then any continuation of Base
Salary and other compensation and benefits made to the Executive under this
Section 9 shall offset the amount of any severance benefits that are due to the
Executive under this Agreement.
(c) For purposes of this Agreement, a "Notice of Termination" shall mean a
written notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
8
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and "Date of Termination" shall mean
the date of the Notice of Termination.
10. POST-TERMINATION OBLIGATIONS.
(a) The Executive hereby covenants and agrees that, for a period of one
year following her termination of employment with the Bank, she shall not,
without the 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 or any of its
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 any
of its affiliates or has headquarters or offices within 50 miles of the
locations in which the Bank or its affiliates 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 the 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 its affiliates to terminate an existing business or commercial
relationship with the Bank or its affiliates.
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank and/or its affiliates, as may reasonably be required by
the Bank and/or its affiliates, 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, or
any of its 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
9
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 from pursuing any other remedies for such breach or
threatened breach, including the recovery of damages from the Executive.
11. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided. No provision of this Agreement shall be interpreted
to mean that Executive is subject to receiving fewer benefits than those
available to her without reference to this Agreement.
13. NO ATTACHMENT; BINDING ON SUCCESSORS.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
14. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
15. REQUIRED PROVISIONS.
(a) The Bank may terminate Executive's employment at any time, but any
termination by the Bank's Board other than Termination for Cause as defined in
Section 8 hereof shall not prejudice Executive's right to compensation or other
10
benefits under this Agreement. Executive shall have no right to receive
compensation or other benefits for any period after Termination for Cause.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) [12 U.S.C. ss.1818(e)(3)] or 8(g)(1) [12 U.S.C. ss.1818(g)(1)]
of the Federal Deposit Insurance Act, the Bank's obligations 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 Executive all or part of the compensation withheld
while its Agreement obligations were suspended and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.
(c) If 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) [12 U.S.C. ss.1818(e)(4)] or 8(g)(1) [12 U.S.C. ss.1818(g)(1)]
of the Federal Deposit Insurance Act, all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Bank is in default as defined in Section 3(x)(1) [12 U.S.C.
ss.1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank
under this Agreement shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of the Agreement is necessary for the
continued operation of the Bank, (i) by the Director of the OTS or his or her
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) [12
U.S.C. ss.1823(c)] of the Federal Deposit Insurance Act; or (ii) by the Director
or his or her designee at the time the Director or his or her 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.
(f) Notwithstanding anything herein contained to the contrary, any payments
to Executive, whether 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. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.
16. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
11
17. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania but only to the extent not superseded by federal law.
19. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a single
arbitrator sitting in a location selected by the Executive within twenty-five
miles of Stroudsburg, Pennsylvania in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of her right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
20. INDEMNIFICATION.
(a) The Executive shall be provided with coverage under a standard
directors' and officers' liability insurance policy. The Bank shall indemnify
Executive to the fullest extent permitted against all expenses and liabilities
reasonably incurred by her in connection with or arising out of any action, suit
or proceeding in which she may be involved by reason of her having been an
officer of the Bank (whether or not she continues to be an officer at the time
of the of incurring such expenses or liabilities) 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
Board), provided that the Bank shall not be required to indemnify or reimburse
Executive for legal expenses or liabilities incurred in connection with an
action, suit or proceeding arising from any illegal or fraudulent act committed
by Executive. Any such indemnification shall be made consistent with Section
545.121 of the 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.
21. NOTICE.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below:
12
To the Bank: ESSA Bank & Trust
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
To Executive: Xxxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
SIGNATURES
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed by
its duly authorized representative, and Executive has signed this Agreement, on
the date first above written.
ESSA BANK & TRUST
9/30/2008 By: /s/ Xxxx X. Xxxxx
------------------------- -----------------------------
Date Xxxx X. Xxxxx, President and
Chief Executive Officer
EXECUTIVE:
9/30/2008 /s/ Xxxxx X. Xxxxxx
------------------------- -----------------------------
Date Xxxxx X. Xxxxxx
