AMENDMENT #1 TO MANAGEMENT CONTINUITY AGREEMENT
Exhibit 10.13
AMENDMENT #1 TO
MANAGEMENT CONTINUITY AGREEMENT
MANAGEMENT CONTINUITY AGREEMENT
This Amendment #1 to Management Continuity Agreement (the “Amendment”) is entered into as of
the 31st day of December, 2008 between Monarch Community Bancorp, Inc., a Maryland corporation (the
“Company”), and Xxxxxxx X. Xxxxxxx (“Executive”).
WHEREAS, the Executive is currently employed by the Company’s affiliate, Monarch Community
Bank (the “Bank”), as its Senior Vice President and Chief Financial Officer; and
WHEREAS, the Company and Executive have previously entered into a Management Continuity
Agreement dated February 21, 2008 (the “Agreement”) to provide certain security to Executive in
connection with a change in control of the Company or the Bank and hereby wish to amend the
Agreement to satisfy the requirements of Section 409A of the Internal Revenue Code (“Section
409A”); and
WHEREAS, except as otherwise provided in this Amendment, the Agreement shall continue in full
force and effect.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and
other good and valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
| 1. | The last sentence of Section 3.3 of the Agreement is amended to provide as follows: |
The preceding events shall only provide the basis for “Good Reason” if Executive provides
notice of such events within one hundred twenty (120) days of their occurrence in the manner
required by Section 5.1 of this Agreement and, within 30 days after receiving notice, the
Company fails to remedy the condition.
| 2. | Section 4.2 is amended to provide as follows: |
4.2 Section 162(m). Should payments be precluded from deduction by the Company under Section
162(m) of the Code, the Company may defer until the first day, in no event later than March 15,
of the tax year following the year in which determination is made that payments will be
non-deductible under 162(m) (the “Determination Year”) only those amounts necessary to maintain
the tax deductibility of compensation paid to Executive in the Determination Year.
| 3. | A new Section 14 is added to the Agreement to provide as follows: |
14. Compliance with Section 409A. Notwithstanding any provision of this Agreement to the
contrary, if the Executive is considered a Specified Employee as of
his employment termination as determined pursuant to Section 409A of the Internal Revenue
Code (“Section 409A”), payments under this Agreement that are made upon
such termination of employment may not, to the extent required by Section 409A, commence to Executive until the six
month anniversary of the date that Executive’s employment with the Company terminates and the
first payment to Executive shall be a lump sum payment of the amount that would have otherwise
been payable to Executive had a delay in payment not been required pursuant to Section 409A.
The remainder of the payments to Executive will be made in accordance with the Company’s or its
successor’s regular payroll practices then in effect. The parties intend, however, that this
Agreement shall be exempt from Section 409A as either a separation pay arrangement under Treas.
Reg. 1.409A-1(b)(9) or a short term deferral of compensation under 1.409A-1(b)(4).
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above
written.
| MONARCH COMMUNITY BANCORP, INC. | EXECUTIVE | |||||||||
By: |
/s/ Xxxxxx X. Xxxxxx | /s/ Xxxxxxx X. Xxxxxxx | ||||||||
| Xxxxxx X. Xxxxxx | Xxxxxxx X. Xxxxxxx | |||||||||
| Its: | President and Chief Executive Officer | |||||||||
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