PAUL D. RUTKOWSKI BANK EMPLOYMENT AGREEMENT
Exhibit 10.4
AMENDED AND RESTATED
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THIS AGREEMENT originally
entered into on the 11th day of
January, 2007 (the “Agreement”), (the “Effective Date”), by and between POLONIA BANK, a federally
chartered savings bank (the “Bank”), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the
“Executive”), is amended and restated in its entirety as of December 16,
2008.
WHEREAS, Executive continues
to serve in a position of substantial responsibility; and
WHEREAS, the Bank wishes to
continue to assure Executive’s services for the term of this Agreement;
and
WHEREAS, Executive is willing
to continue to serve in the employ of the Bank during the term of this
Agreement; and
WHEREAS, the parties of this
Agreement desire to amend and restate the Agreement in order to bring it into
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”).
NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement, and upon the
other terms and conditions provided for in this Agreement, the parties hereby
agree as follows:
1. Employment. The Bank will
employ Executive as Chief Financial Officer and Treasurer. Executive
will perform all duties and shall have all powers commonly incident to the
offices of Chief Financial Officer and Treasurer or which, consistent with those
offices, the Board of Directors of the Bank (the “Board”) delegates to
Executive. Executive also agrees to serve, if elected, as an officer
and/or director of any subsidiary or affiliate of the Bank and to carry out the
duties and responsibilities reasonably appropriate to those
offices.
2. Location
and Facilities. The Bank will
furnish Executive with the working facilities and staff customary for executive
officers with the title and duties set forth in Section 1 and as are necessary
for him to perform his duties. The location of such facilities and
staff shall be at the principal administrative offices of the Bank, or at such
other site or sites customary for such offices.
3. Term.
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(a)
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The
term of this Agreement shall include: (i) the initial term, consisting of
the period commencing on the Effective Date and ending on January 11,
2010, plus (ii) any and all extensions of the initial term made pursuant
to Section 3 of this Agreement.
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(b)
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Commencing
on the first anniversary of the Effective Date and continuing on each
anniversary of the Effective Date thereafter, the disinterested members of
the Board may extend the Agreement term for an additional year, so that
the remaining term of the Agreement again becomes thirty-six (36) months,
unless Executive elects not to extend the term of this Agreement by giving
written notice in accordance with Section 19 of this
Agreement. The Board will review the Agreement and Executive’s
performance annually for purposes of determining whether to extend the
Agreement term and will include the rationale and results of its review in
the minutes of the meeting. The Board will notify Executive as
soon as possible after its annual review whether the Board has determined
to extend the Agreement.
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4. Base
Compensation.
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(a)
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The
Bank agrees to pay Executive during the term of this Agreement a base
salary at the rate of $164,500 per year, payable in accordance with
customary payroll practices.
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(b)
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Each
year, the Board will review the level of Executive’s base salary, based
upon factors they deem relevant, in order to determine whether to maintain
or increase his base salary.
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5. Bonuses. Executive will
participate in discretionary bonuses or other incentive compensation programs
that the Bank may sponsor or award from time to time to senior management
employees.
6. Benefit
Plans. Executive will
participate in life insurance, medical, dental, pension, profit sharing,
retirement and stock-based compensation plans and other programs and
arrangements that the Bank may sponsor or maintain for the benefit of its
employees.
7. Vacations and
Leave.
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(a)
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Executive
may take vacations and other leave in accordance with the Bank’s policy
for senior executives, or otherwise as approved by the
Board.
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(b)
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In
addition to paid vacations and other leave, the Board may grant Executive
a leave or leaves of absence, with or without pay, at such time or times
and upon such terms and conditions as the Board, in its discretion, may
determine.
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8. Expense
Payments and Reimbursements. The Bank will
reimburse Executive for all reasonable out-of-pocket business expenses incurred
in connection with his services under this Agreement upon substantiation of such
expenses in accordance with applicable policies of the Bank.
9. Automobile
Allowance. During the term
of this Agreement, the Bank will provide Executive with the use of an
automobile, including insurance, maintenance and work-related fuel expenses, or,
in the alternative and the sole discretion of the Bank, the Bank will provide
Executive with an automobile allowance that approximates the expense of a
Bank-provided automobile and related insurance, maintenance and fuel
costs. Executive will comply with reasonable reporting and expense
limitations on the use of such automobile as the Bank may establish from time to
time, and the Bank shall annually include on Executive’s Form W-2 any income
attributable to Executive’s personal use of the automobile.
10. Loyalty and
Confidentiality.
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(a)
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During
the term of this Agreement, Executive will devote all his business time,
attention, skill, and efforts to the faithful performance of his duties
under this Agreement; provided, however, that from time to time, Executive
may serve on the boards of directors of, and hold any other offices or
positions in, companies or organizations that will not present any
conflict of interest with the Bank or any of its subsidiaries or
affiliates, unfavorably affect the performance of Executive’s duties
pursuant to this Agreement, or violate any applicable statute or
regulation. Executive will not engage in any business or
activity contrary to the business affairs or interests of the Bank or any
of its subsidiaries or
affiliates.
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(b)
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Nothing
contained in this Agreement will prevent or limit Executive’s right to
invest in the capital stock or other securities or interests of any
business dissimilar from that of the Bank, or, solely as a passive,
minority investor, in any business.
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(c)
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Executive
agrees to maintain the confidentiality of any and all information
concerning the operation or financial status of the Bank; the names or
addresses of any of its borrowers, depositors and other customers; any
information concerning or obtained from such customers; and any other
information concerning the Bank or its subsidiaries or affiliates to which
he may be exposed during the course of his
employment. Executive further agrees that, unless required by
law or specifically permitted by the Board in writing, he will not
disclose to any person or entity, either during or subsequent to his
employment, any of the above-mentioned information which is not generally
known to the public, nor will he use the information in any way other than
for the benefit of the Bank.
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11. Termination
and Termination Pay. Subject to
Section 12 of this Agreement, Executive’s employment under this Agreement may be
terminated in the following circumstances:
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(a)
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Death. Executive’s
employment under this Agreement will terminate upon his death during the
term of this Agreement, in which event Executive’s estate will receive the
compensation due to Executive through the last day of the calendar month
in which his death occurred.
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(b)
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Retirement. This
Agreement will terminate upon Executive’s retirement under the retirement
benefit plan or plans in which he participates pursuant to Section 6 of
this Agreement or otherwise.
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(c) Disability.
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(i)
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The
Board or Executive may terminate Executive’s employment after having
determined Executive has a Disability. For purposes of this
Agreement, “Disability” means a physical or mental infirmity that impairs
Executive’s ability to substantially perform his duties under this
Agreement and results in Executive becoming eligible for long-term
disability benefits under any long-term disability plans of the Bank (or,
if no such plans exists, that impairs Executive’s ability to substantially
perform his duties under this Agreement for a period of one hundred eighty
(180) consecutive days). The Board will determine whether or
not Executive is and continues to be permanently disabled for purposes of
this Agreement in good faith, based upon competent medical advice and
other factors that the Board reasonably believes to be
relevant. As a condition to any benefits, the Board may require
Executive to submit to physical or mental evaluations and tests as the
Board or its medical experts deem reasonably
appropriate.
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(ii)
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In
the event of his Disability, Executive will no longer be obligated to
perform services under this Agreement. The Bank will pay
Executive, as Disability pay, an amount equal to seventy-five percent
(75%) of Executive’s rate of base salary in effect as of the date of his
termination of employment due to Disability. The Bank will make Disability
payments on a monthly basis commencing on the first day of the month
following the effective date of Executive’s termination of employment due
to Disability and ending on the earlier of: (A) the date he returns to
full-time employment at the Bank in the same capacity as he was employed
prior to his termination for Disability; (B) his death; (C) his attainment
of age 65; or (D) the date this Agreement would have expired had
Executive’s employment not terminated by reason of
Disability. The Bank will reduce Disability payments by the
amount of any short- or long-term disability benefits payable to Executive
under any other disability programs sponsored by the Bank. In
addition, during any period of Executive’s Disability, the Bank will
continue to provide Executive and his dependents, to the greatest extent
possible, with continued coverage under all benefit plans (including,
without limitation, retirement plans and medical, dental and life
insurance plans) in which Executive and/or his dependent participated
prior to his Disability on the same terms as if he remained actively
employed by the Bank.
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(d)
Termination for
Cause.
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(i)
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The
Board may, by written notice to Executive in the form and manner specified
in this paragraph, immediately terminate his employment at any time for
“Cause.” Executive shall have no right to receive compensation
or other benefits for any period after termination for
Cause. Termination for Cause shall mean termination because of
Executive’s:
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(1)
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Personal
dishonesty;
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(2)
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Incompetence;
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(3)
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Willful
misconduct;
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(4)
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Breach
of fiduciary duty involving personal
profit;
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(5)
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Intentional
failure to perform stated duties;
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(6)
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Willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease and desist order;
or
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(7)
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Material
breach by Executive of any provision of this
Agreement.
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(ii)
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Notwithstanding
the foregoing, Executive’s termination for Cause will not become effective
unless the Bank has delivered to Executive a copy of a resolution duly
adopted by the affirmative vote of a majority of the entire membership of
the Board, at a meeting of the Board called and held for the purpose of
finding (after reasonable notice to Executive and an opportunity for
Executive to be heard before the Board with counsel) that Executive was
guilty of the conduct described above and specifying the particulars of
this conduct.
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(e)
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Voluntary Termination
by Executive. In addition to his other rights to
terminate under this Agreement, Executive may voluntarily terminate
employment during the term of this Agreement upon at least sixty (60) days
prior written notice to the Board. Upon Executive’s voluntary
termination, he will receive only his compensation and vested rights and
benefits to the date of his termination. Following his
voluntary termination of employment under this Section 11(e), Executive
will be subject to the restrictions set forth in Sections 11(g)(i) and
11(g)(ii) of this Agreement for a period of one (1) year from his
termination date.
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(f)
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Without Cause or With
Good Reason.
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(i)
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In
addition to termination pursuant to Sections 11(a) through 11(e), the
Board may, by written notice to Executive, immediately terminate his
employment at any time for a reason other than Cause (a termination
“Without Cause”) and Executive may, by written notice to the
Board, terminate his employment under this Agreement for “Good
Reason,” as defined below (a termination “With Good
Reason”).
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(ii)
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Subject
to Section 12 of this Agreement, in the event of termination under this
Section 11(f), Executive will receive his base salary and the value of
employer contributions to benefit plans in which the Executive
participated upon termination for the remaining term of the Agreement,
paid in one lump sum within ten (10) calendar days of his
termination. Executive will also continue to participate in any
benefit plans of the Bank that provide medical, dental and life insurance
coverage for the remaining term of the Agreement, under terms and
conditions no less favorable than the most favorable terms and conditions
provided to senior executives of the Bank during the same
period. If the Bank cannot provide such coverage because
Executive is no longer an employee, the Bank will provide Executive with
comparable coverage on an individual policy basis or the cash
equivalent.
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(iii)
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For
purposes of this Agreement “Good Reason” shall mean the occurrence of any
of the following events without the Executive’s
consent:
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(1)
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The
assignment to Executive of duties that constitute a material diminution of
Executive’s authority, duties, or responsibilities (including reporting
requirements);
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(2)
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A
material diminution in Executive’s base
salary;
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(3)
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Relocation
of Executive to a location outside a radius of twenty-five (25) miles from
the Company’s corporate office; or
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(4)
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Any
other action or inaction by the Bank or the Company that constitutes a
material breach of this Agreement;
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provided,
that within ninety (90) days after the initial existence of such event, the Bank
shall be given notice and an opportunity, not less than thirty (30) days, to
effectuate a cure for such asserted “Good Reason” by
Executive. Executive’s resignation hereunder for Good Reason shall
not occur later than one hundred fifty (150) days following the initial date on
which the event Executive claims constitutes Good Reason occurred.
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(g)
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Continuing Covenant
Not to Compete or Interfere with
Relationships. Regardless of anything herein to the
contrary, following a termination by the Bank or Executive pursuant to
Section 11(e) or 11(f):
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(i)
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Executive’s
obligations under Section 10(c) of this Agreement will continue in effect;
and
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(ii)
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During
the period ending on the first anniversary of such termination, Executive
will not serve as an officer, director or employee of any bank holding
company, bank, savings association, savings and loan holding company,
mortgage company or other financial institution that offers products or
services competing with those offered by the Bank from any office within
thirty-five (35) miles from the main office or any branch of the Bank and,
further, Executive will not interfere with the relationship of the Bank,
its subsidiaries or affiliates and any of their employees, agents, or
representatives.
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(h)
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To
the extent Executive is a member of the Board on the date of termination
of employment with the Bank, Executive will resign from the Board
immediately following such termination of employment with the
Bank. Executive will be obligated to tender this resignation
regardless of the method or manner of termination, and such resignation
will not be conditioned upon any event or
payment.
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12. Termination in Connection
with a Change in Control.
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(a)
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For
purposes of this Agreement, a “Change in Control” means any of the
following events:
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(i)
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Merger: Polonia
Bancorp (the “Company”) merges into or consolidates with another entity,
or merges another corporation into the Company, and as a result, less than
a majority of the combined voting power of the resulting corporation
immediately after the merger or consolidation is held by persons who were
stockholders of the Company immediately before the merger or
consolidation;
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(ii)
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Acquisition of
Significant Share Ownership: There is filed, or is
required to be filed, a report on Schedule 13D or another form or schedule
(other than Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended, if the schedule discloses
that the filing person or persons acting in concert has or have become the
beneficial owner of 25% or more of a class of the Company’s voting
securities, but this clause (ii) shall not apply to beneficial ownership
of Company voting shares held in a fiduciary capacity by an entity of
which the Company directly or indirectly beneficially owns 50% or more of
its outstanding voting securities;
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(iii)
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Change in Board
Composition: During any period of two consecutive years,
individuals who constitute the Company’s Board of Directors at the
beginning of the two-year period cease for any reason to constitute at
least a majority of the Company’s Board of Directors; provided, however,
that for purposes of this clause (iii), each director who is first elected
by the board (or first nominated by the board for election by the members)
by a vote of at least two-thirds (2/3) of the directors who were directors
at the beginning of the two-year period shall be deemed to have also been
a director at the beginning of such period;
or
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(iv)
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Sale of
Assets: The Company sells to a third party all or
substantially all of its
assets.
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(b)
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Termination. If
within the period ending one year after a Change in Control, (i) the Bank
terminates Executive’s employment Without Cause, or (ii) Executive
voluntarily terminates his employment With Good Reason, the Bank will,
within ten calendar days of the termination of Executive’s employment,
make a lump-sum cash payment to him equal to three times Executive’s
average “Annual Compensation” over the five (5) most recently completed
calendar years, ending with the year immediately preceding the effective
date of the Change in Control. “Annual Compensation” will
include base salary and any other taxable income, including, but not
limited to, amounts related to the granting, vesting or exercise of
restricted stock or stock option awards, commissions, bonuses, retirement
benefits, director or committee fees and fringe benefits paid to Executive
or accrued for Executive’s benefit. Annual Compensation will
also include, profit sharing, employee stock ownership plan and other
retirement contributions or benefits, including to any tax-qualified plan
or arrangement (whether or not taxable) made or accrued on behalf of
Executive for such year. The cash payment made under this
Section 12(b) shall be made in lieu of any payment also required under
Section 11(f) of this Agreement because of Executive’s termination of
employment, however, Executive’s rights under Section 11(f) are not
otherwise affected by this Section 12. Following termination of
employment, executive will also continue to participate in any benefit
plans of the Bank that provide medical, dental and life insurance coverage
upon terms no less favorable than the most favorable terms provided to
senior executives. If the Bank cannot provide such coverage
because Executive is no longer an employee, the Bank will provide
Executive with comparable coverage on an individual basis or the cash
equivalent. The medical, dental and life insurance coverage
provided under this Section 12(b) shall cease upon the earlier
of: (i) the Executive’s death; (ii) Executive’s employment by
another employer other than one of which he is the majority owner; or
(iii) thirty-six (36) months after his termination of
employment.
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(c)
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The
provisions of Section 12 and Sections 14 through 26, including the defined
terms used in such sections, shall continue in effect until the later of
the expiration of this Agreement or one year following a Change in
Control.
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(d)
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Notwithstanding
anything in this Section 12 to the contrary, a “Change in Control” for
purposes of this Agreement shall not include any corporate restructuring
transaction by the Bank, including, but not limited to, a mutual to stock
conversion, provided that the Board of Directors of the Bank immediately
preceding such transaction constitutes at least a majority of the Board of
Directors of the Bank after such
transaction.
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13.
Indemnification and
Liability Insurance.
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(a)
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Indemnification. The
Bank agrees to indemnify Executive (and his heirs, executors, and
administrators), and to advance expenses related to this indemnification,
to the fullest extent permitted under applicable law and regulations
against any and all expenses and liabilities that Executive reasonably
incurs in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his service as a
director or Executive of the Bank or any of its affiliates (whether or not
he continues to be a director or Executive at the time of incurring any
such expenses or liabilities). Covered expenses and liabilities
include, but are not limited to, judgments, court costs, and attorneys’
fees and the costs of reasonable settlements, subject to Board approval,
if the action is brought against Executive in his capacity as an Executive
or director of the Bank or any of its
affiliates. Indemnification for expenses will not extend to
matters related to Executive’s termination for
Cause. Notwithstanding anything in this Section 13(a) to the
contrary, the Bank will not be required to provide indemnification
prohibited by applicable law or regulation. The obligations of
this Section 13 will survive the term of this Agreement by a period of six
(6) years.
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(b)
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Insurance. During
the period for which the Bank must indemnify Executive, the Bank will
provide Executive (and his heirs, executors, and administrators) with
coverage under a directors’ and officers’ liability policy at the Bank’s
expense, that is at least equivalent to the coverage provided to directors
and senior executives of the Bank.
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14.
Reimbursement
of Executive’s Expenses to Enforce this Agreement. The Bank will
reimburse Executive for all out-of-pocket expenses, including, without
limitation, reasonable attorneys’ fees, incurred by Executive in connection with
his successful enforcement of the Bank’s obligations under this
Agreement. Successful enforcement means the grant of an award of
money or the requirement that the Bank take some specified action: (i) as a
result of court order; or (ii) otherwise following an initial failure of the
Bank to pay money or take action promptly following receipt of a written demand
from Executive stating the reason that the Bank must make payment or take action
under this Agreement.
15.
Limitation
of Benefits under Certain Circumstances. If the payments
and benefits pursuant to Section 12 of this Agreement, either alone or together
with other payments and benefits Executive has the right to receive from the
Bank, would constitute a “parachute payment” under Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), the payments and benefits
pursuant to Section 12 shall be reduced or revised, in the manner determined by
Executive, by the amount, if any, which is the minimum necessary to result in no
portion of the payments and benefits under Section 12 being non-deductible to
the Bank pursuant to Section 280G of the Code and subject to the excise tax
imposed under Section 4999 of the Code. The Bank’s independent public
accountants will determine any reduction in the payments and benefits to be made
pursuant to Section 12; the Bank will pay for the accountant’s
opinion. If the Bank and/or Executive do not agree with the
accountant’s opinion, the Bank will pay to Executive the maximum amount of
payments and benefits pursuant to Section 12, as selected by Executive, that the
opinion indicates have a high probability of not causing any of the payments and
benefits to be non-deductible to the Bank and subject to the imposition of the
excise tax imposed under Section 4999 of the Code. The Bank may also
request, and Executive has the right to demand that the Bank request, a ruling
from the IRS as to whether the disputed payments and benefits pursuant to
Section 12 have such tax consequences. The Bank will promptly
prepare and file the request for a ruling from the IRS, but in no event will the
Bank make this filing later than thirty (30) days from the date of the
accountant’s opinion referred to above. The request will be subject
to Executive’s approval prior to filing; Executive shall not unreasonably
withhold his approval. The Bank and Executive agree to be bound by
any ruling received from the IRS and to make appropriate payments to each other
to reflect any IRS rulings, together with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code. Nothing
contained in this Agreement shall result in a reduction of any payments or
benefits to which Executive may be entitled upon termination of employment other
than pursuant to Section 12 hereof, or a reduction in the payments and benefits
specified in Section 12, below zero.
16. Injunctive
Relief. Upon a breach or
threatened breach of Section 11(g) of this Agreement or the prohibitions upon
disclosure contained in Section 10(c) of this Agreement, the parties agree that
there is no adequate remedy at law for such breach, and the Bank shall be
entitled to injunctive relief restraining Executive from such breach or
threatened breach, but such relief shall not be the exclusive remedy for a
breach of this Agreement. The parties further agree that Executive,
without limitation, may seek injunctive relief to enforce the obligations of the
Bank under this Agreement.
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17. Successors and
Assigns.
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(a)
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This
Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the
Bank.
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(b)
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Since
the Bank is contracting for the unique and personal skills of Executive,
Executive shall not assign or delegate his rights or duties under this
Agreement without first obtaining the written consent of the
Bank.
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18. No
Mitigation. Executive shall
not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no such payment shall be
offset or reduced by the amount of any compensation or benefits provided to
Executive in any subsequent employment.
19. Notices. All notices,
requests, demands and other communications in connection with this Agreement
shall be made in writing and shall be deemed to have been given when delivered
by hand or 48 hours after mailing at any general or branch United States Post
Office, by registered or certified mail, postage prepaid, addressed to the Bank
at their principal business offices and to Executive at his home address as
maintained in the records of the Bank.
20. No Plan
Created by this Agreement. Executive and the
Bank expressly declare and agree that this Agreement was negotiated among them
and that no provision or provisions of this Agreement are intended to, or shall
be deemed to, create any plan for purposes of the Employee Retirement Income
Security Act of 1974 (“ERISA”) or any other law or regulation, and each party
expressly waives any right to assert the contrary. Any assertion in
any judicial or administrative filing, hearing, or process that an ERISA plan
was created by this Agreement shall be deemed a material breach of this
Agreement by the party making the assertion.
21. Amendments. No amendments or
additions to this Agreement shall be binding unless made in writing and signed
by all of the parties, except as herein otherwise specifically
provided.
22. Applicable
Law. Except to the
extent preempted by federal law, the laws of the Commonwealth of Pennsylvania
shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
23. Severability. The provisions of
this Agreement shall be deemed severable and the invalidity or unenforceability
of any one provision shall not affect the validity or enforceability of the
other provision of this Agreement.
24. Headings. Headings
contained in this Agreement are for convenience of reference only.
25. Entire
Agreement. This Agreement,
together with any modifications subsequently agreed to in writing by the
parties, shall constitute the entire agreement among the parties with respect to
the foregoing subject matter, other than written agreements applicable to
specific plans, programs or arrangements described in Sections 5 and
6.
26. Required
Provisions. In the event any
of the foregoing provisions of this Agreement conflict with the terms of this
Section 26, this Section 26 shall prevail.
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(a)
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The
Bank’s Board of Directors may terminate Executive’s employment at any
time, but any termination by the Bank’s Board of Directors, other than
termination for Cause, shall not prejudice Executive’s right to
compensation or other benefits under this Agreement. Executive
shall have no right to receive compensation or other benefits
for any period after termination for Cause as defined in Section 11(d) of
this Agreement.
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(b)
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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) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. Section 1818(e)(3) or (g)(1), the Bank’s obligations under this
contract 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 contract obligations
were suspended; and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
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(c)
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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)
or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section
1818(e)(4) or (g)(1), all obligations of the Bank under this contract
shall terminate as of the effective date of the order, but vested rights
of the contracting parties shall not be
affected.
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(d)
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If
the Bank is in default as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1), all obligations of
the Bank under this contract shall terminate as of the date of default,
but this paragraph shall not affect any vested rights of the contracting
parties.
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(e)
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All
obligations of the Bank under this contract shall be terminated, except to
the extent determined that continuation of the contract is necessary for
the continued operation of the Bank: (i) by the Director of the
OTS (or his designee), at the time the FDIC enters into an agreement to
provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1823(c), or (ii) by the Director of the OTS (or his designee) at
the time the Director (or his designee) approves a supervisory merger to
resolve problems related to the operations 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.
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(f)
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Any
payments made to Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k)
and 12 C.F.R. Section 545.121 and any rules and regulations promulgated
thereunder.
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10
27. Section 409A of the
Code.
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(a)
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This
Agreement is intended to comply with the requirements of Section 409A of
the Code, and specifically, with the “short-term deferral exception” under
Treasury Regulation Section 1.409A-1(b)(4) and the “separation pay
exception” under Treasury Regulation Section 1.409A-1(b)(9)(iii), and
shall in all respects be administered in accordance with Section 409A of
the Code. If any payment or benefit hereunder cannot be
provided or made at the time specified herein without incurring sanctions
on Executive under Section 409A of the Code, then such payment or benefit
shall be provided in full at the earliest time thereafter when such
sanctions will not be imposed. For purposes of Section 409A of
the Code, all payments to be made upon a termination of employment under
this Agreement may only be made upon a “separation from service” (within
the meaning of such term under Section 409A of the Code), each payment
made under this Agreement shall be treated as a separate payment, the
right to a series of installment payments under this Agreement (if any) is
to be treated as a right to a series of separate payments, and if a
payment is not made by the designated payment date under this Agreement,
the payment shall be made by December 31 of the calendar year in which the
designated date occurs. To the extent that any payment provided
for hereunder would be subject to additional tax under Section 409A of the
Code, or would cause the administration of this Agreement to fail to
satisfy the requirements of Section 409A of the Code, such provision shall
be deemed null and void to the extent permitted by applicable law, and any
such amount shall be payable in accordance with subsection (b)
below. In no event shall Executive, directly or indirectly,
designate the calendar year of
payment.
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(b)
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If
when separation from service occurs Executive is a “specified employee”
within the meaning of Section 409A of the Code, and if the cash severance
payment under Section 11(f)(ii) or 12(b) of this Agreement would be
considered deferred compensation under Section 409A of the Code, and,
finally, if an exemption from the six-month delay requirement of Section
409A(a)(2)(B)(i) of the Code is not available (i.e., the “short-term
deferral exception” under Treasury Regulations Section 1.409A-1(b)(4) or
the “separation pay exception” under Treasury Section
1.409A-1(b)(9)(iii)), the Bank or the Company will make the maximum
severance payment possible in order to comply with an exception from the
six month requirement and make any remaining severance payment under
Section 11(f)(ii) or 12(b) of this Agreement to Executive in a single lump
sum without interest on the first payroll date that occurs after the date
that is six (6) months after the date on which Executive separates from
service.
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(c)
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If
(x) under the terms of the applicable policy or policies for the insurance
or other benefits specified in Section 11(f)(ii) or 12(b) of this
Agreement it is not possible to continue coverage for Executive and his
dependents, or (y) when a separation from service occurs Executive is a
“specified employee” within the meaning of Section 409A of the Code, and
if any of the continued insurance coverage or other benefits specified in
Section 11(f)(ii) or 12(b) of this Agreement would be considered deferred
compensation under Section 409A of the Code, and, finally, if an exemption
from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the
Code is not available for that particular insurance or other benefit, the
Bank or the Company shall pay to Executive in a single lump sum an amount
in cash equal to the present value of the Bank’s projected cost to
maintain that particular insurance benefit (and associated income tax
gross-up benefit, if applicable) had Executive’s employment not
terminated, assuming continued coverage for 36 months. The
lump-sum payment shall be made thirty (30) days after employment
termination or, if Section 27(b) of this Agreement applies, on the first
payroll date that occurs after the date that is six (6) months after the
date on which Executive separates from
service.
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(d)
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References
in this Agreement to Section 409A of the Code include rules, regulations,
and guidance of general application issued by the Department of the
Treasury under Internal Revenue Section 409A of the
Code.
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11
IN WITNESS WHEREOF, the
parties hereto have executed this amended and restated Agreement on December 16,
2008.
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ATTEST:
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POLONIA
BANK
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/s/ ▇▇▇▇ ▇▇▇▇▇
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By:
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/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇
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Witness
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For
the Entire Board of Directors
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WITNESS:
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EXECUTIVE
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/s/ ▇▇▇▇ ▇▇▇▇▇
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By:
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
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