PAUL D. RUTKOWSKI COMPANY EMPLOYMENT AGREEMENT
Exhibit 10.3
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 BANCORP, a federally
chartered corporation (the “Company”), 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 Company 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 Company 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 Company 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 Company (the “Board”) delegates to
Executive. During the term of this Agreement, Executive also agrees
to serve, if elected, as an officer and/or director of any subsidiary or
affiliate of the Company and to carry out the duties and responsibilities
reasonably appropriate to those offices.
2. Location
and Facilities. The Company will
furnish Executive with the working facilities and staff customary for executive
officers with the titles 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 Company and 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 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
prior to 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 term and
Executive’s performance annually for purposes of determining whether to
extend the Agreement 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
Company 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 Company may 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 Company may sponsor or maintain.
7. Vacations and
Leave.
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(a)
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Executive
may take vacations and other leave in accordance with 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 Company 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 Company.
9. Automobile
Allowance. During the
term of this Agreement, the Company 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 Company, the Company will
provide Executive with an automobile allowance which would approximate the
expense of a Company-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 Company may establish
from time to time, and the Company 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 Company 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 Company 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 Company, 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 Company and its
affiliates; the names or addresses of any borrowers, depositors and other
customers; any information concerning or obtained from such customers; and
any other information concerning the Company or its 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
Company.
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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 Company
(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 Company 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 Company 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 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 Company 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
Company. In addition, during any period of Executive’s
Disability, the Company 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
dependents participated prior to Executive’s Disability on the same terms
as if he remained actively employed by the
Company.
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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 include 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 Company 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 as 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
his 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 up 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 Company 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 Company during the same
period. If the Company cannot provide such coverage because
Executive is no longer an employee, the Company 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 Company 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 Company or its subsidiaries
or affiliates from any office within thirty-five (35) miles from the main
office of the Company or any branch of the Bank and, further, Executive
will not interfere with the relationship of the Company, 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, Executive will resign from the Board immediately following
such termination of employment. 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: 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
Company terminates Executive’s employment Without Cause, or (ii) Executive
voluntarily terminates his employment With Good Reason, the Company 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 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 that provide medical, dental and life insurance coverage upon terms
no less favorable than the most favorable terms provided to senior
executives. 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 27, 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 Company, including, but not limited to, a mutual to
stock conversion, provided that the Board of Directors of the Company
immediately preceding such transaction constitutes at least a majority of
the Board of Directors of the Company after such
transaction.
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13. Indemnification and
Liability Insurance.
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(a)
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Indemnification. The
Company 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 Company 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 Company 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 Company will not be required to
provide indemnification prohibited by applicable law or
regulation. The obligations of this Section 13 shall 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 Company must indemnify Executive under this
Section, the Company will provide Executive (and his heirs, executors, and
administrators) with coverage under a directors’ and officers’ liability
policy, at the Company’s expense, that is at least equivalent to the
coverage provided to directors and senior executives of the
Company.
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14. Reimbursement
of Executive’s Expenses to Enforce this Agreement. The Company will
reimburse Executive for all out-of-pocket expenses, including, without
limitation, reasonable attorney fees, incurred by Executive in connection with
his successful enforcement of the Company’s obligations under this
Agreement. Successful enforcement means the grant of an award of
money or the requirement that the Company take some specified action: (i) as a
result of court order; or (ii) otherwise following an initial failure of the
Company to pay money or take action promptly following receipt of a written
demand from Executive stating the reason that the Company must pay money 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
Company, 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 Company 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 Company will pay for the
accountant’s opinion. If the Company and/or Executive do not agree
with the accountant’s opinion, the Company 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
payments and benefits to be non-deductible to the Company and subject to the
imposition of the excise tax imposed under Section 4999 of the
Code. The Company may also request, and Executive has the right to
demand that the Company request, a ruling from the IRS as to whether the
disputed payments and benefits pursuant to Section 12 have such tax
consequences. The Company will promptly prepare and file the
request for a ruling from the IRS, but in no event 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 Company 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 Company 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
Company 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 Company which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the
Company.
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(b)
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Since
the Company 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
Company.
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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
Company at its principal business offices and to Executive at his home address
as maintained in the records of the Company.
20. No Plan
Created by this Agreement. Executive and the
Company 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.
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26. Source of
Payments. Notwithstanding
any provision in this Agreement to the contrary, to the extent payments and
benefits, as provided for under this Agreement, are paid or received by
Executive under the Employment Agreement in effect between Executive and the
Bank, the payments and benefits paid by the Bank will be subtracted from any
amount or benefit due simultaneously to Executive under similar provisions of
this Agreement. Payments will be allocated in proportion to the level
of activity and the time expended by Executive on activities related to the
Company and the Bank, respectively, as determined by the Company and the
Bank.
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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/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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