EXHIBIT 10.2
Employment Agreement
This Employment Agreement ("the Agreement") is made and entered into
as of ______________, 1999 by and between Rome Bancorp, Inc., a business
corporation organized and existing under the laws of the State of Delaware and
having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("the
Company") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W i t n e s s e t h :
Whereas, the Executive currently serves as President and Chief
Executive Officer of the Company and as President and Chief Executive Officer of
The Rome Savings Bank (the "Bank") and effective as of the date of this
Agreement (the "Effective Date"), the Bank has converted from a mutual savings
bank to a stock savings bank and has become the wholly owned subsidiary of the
Company; and
Whereas, the Company desires to assure for itself, the Bank and their
respective subsidiaries and affiliates the continued availability of the
Executive's services as provided in this Agreement and the ability of the
Executive to perform such services with a minimum of personal distraction in the
event of a pending or threatened Change of Control (as hereinafter defined); and
Whereas, the Executive is willing to continue to serve the Company,
the Bank and their respective subsidiaries and affiliates on the terms and
conditions hereinafter set forth;
Now, Therefore, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, the Company, the Bank and the
Executive hereby agree as follows:
Section 1. Employment.
----------
The Company and the Bank agree to continue to employ the Executive,
and the Executive hereby agrees to such continued employment, during the period
and upon the terms and conditions set forth in this Agreement.
Section 2. Employment Period; Remaining Unexpired Employment Period.
--------------------------------------------------------
(a) The terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this section 2
("Employment Period"). The Employment Period shall be for an initial term of
three years beginning on the Effective Date and ending on the third anniversary
date of this Agreement (each, an "Anniversary Date"), plus such extensions, if
any, as are provided pursuant to section 2(b).
(b) Except as provided in section 2(c) and subject to section 11(b),
beginning on the Effective Date, the Employment Period shall automatically be
extended for one additional day each day, unless either the Company or the
Executive elects not to extend the Agreement further by giving written notice
thereof to the other party, in which case the Employment Period shall end on
the third anniversary of the date on which such written notice is given. For all
purposes of this Agreement, the term "Remaining Unexpired Employment Period" as
of any date shall mean the period beginning on such date and ending on the last
day of the Employment Period taking into account any extensions under this
section 2(b). Upon termination of the Executive's employment with the Company
and the Bank for any reason whatsoever, any daily extensions provided pursuant
to this section 2(b), if not theretofore discontinued, shall automatically
cease.
(c) Nothing in this Agreement shall be deemed to prohibit the Company
or the Bank at any time from terminating the Executive's employment during the
Employment Period with or without notice for any reason; provided, however, that
the relative rights and obligations of the Company and the Executive in the
event of any such termination shall be determined under this Agreement.
Section 3. Duties.
------
The Executive shall serve as President and Chief Executive Officer of
the Company and as President and Chief Executive Officer the Bank, having such
power, authority and responsibility and performing such duties as are prescribed
by or under the By-Laws of the Company and as are customarily associated with
such position. The Executive shall devote his full business time and attention
(other than during weekends, holidays, approved vacation periods, and periods of
illness or approved leaves of absence) to the business and affairs of the
Company and shall use his best efforts to advance the interests of the Company.
Section 4. Cash Compensation.
-----------------
In consideration for the services to be rendered by the Executive
hereunder, the Company shall continue to pay to him a salary at an annual rate
of $250,000, payable in approximately equal installments in accordance with the
Company's customary payroll practices for senior officers. The Board shall
review the Executive's annual rate of salary at such times during the Employment
Period as it deems appropriate, but not less frequently than once every twelve
months, and may, in its discretion, approve an increase therein. In addition to
salary, the Executive may receive other cash compensation from the Company or
the Bank for services hereunder at such times, in such amounts and on such terms
and conditions as the Board may determine from time to time.
Section 5. Employee Benefit Plans and Programs.
-----------------------------------
During the Employment Period, the Executive shall be treated as an
employee of the Company and the Bank and shall be entitled to participate in and
receive benefits under any and all qualified or non-qualified retirement,
pension, savings, profit-sharing or stock bonus plans, any and all group life,
health (including hospitalization, medical and major medical), dental, accident
and long term disability insurance plans, and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Company or the Bank, in accordance with the terms and conditions of such
-2-
employee benefit plans and programs and compensation plans and programs and
consistent with the Company's and the Bank's customary practices.
Section 6. Indemnification and Insurance.
-----------------------------
(a) During the Employment Period and for a period of six years
thereafter, the Company or the Bank shall cause the Executive to be covered by
and named as an insured under any policy or contract of insurance obtained by it
to insure its directors and officers against personal liability for acts or
omissions in connection with service as an officer or director of the Company,
the Bank or service in other capacities at the request of the Company. The
coverage provided to the Executive pursuant to this section 6 shall be of the
same scope and on the same terms and conditions as the coverage (if any)
provided to other officers or directors of the Company and the Bank.
(b) To the maximum extent permitted under applicable law, during the
Employment Period and for a period of six years thereafter, the Company and the
Bank shall indemnify the Executive against and hold him harmless from any costs,
liabilities, losses and exposures to the fullest extent and on the most
favorable terms and conditions that similar indemnification is offered to any
director or officer of the Company and the Bank or any subsidiary or affiliate
thereof.
Section 7. Outside Activities.
------------------
The Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld); provided, however, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; provided, however, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Company or the Bank and generally
applicable to all similarly situated Executives. The Executive may also serve
as an officer or director of the Bank on such terms and conditions as the
Company and the Bank may mutually agree upon, and such service shall not be
deemed to materially interfere with the Executive's performance of his duties
hereunder or otherwise result in a material breach of this Agreement. If the
Executive is discharged or suspended, or is subject to any regulatory
prohibition or restriction with respect to participation in the affairs of the
Bank, he shall continue to perform services for the Company in accordance with
this Agreement but shall not directly or indirectly provide services to or
participate in the affairs of the Bank in a manner inconsistent with the terms
of such discharge or suspension or any applicable regulatory order.
Section 8. Working Facilities and Expenses.
-------------------------------
The Executive's principal place of employment shall be at the
Company's and the Bank's executive offices at the address first above written,
or at such other location within 50 miles of the address at which the Company
shall maintain its principal executive offices, or at such other location as the
Company and the executive may mutually agree upon. The Company shall provide
the Executive at his principal place of employment with a private office,
secretarial services and oth-
-3-
er support services and facilities suitable to his position with the Company and
the Bank and necessary or appropriate in connection with the performance of his
assigned duties under this Agreement. The Company shall reimburse the Executive
for his ordinary and necessary business expenses, including, without limitation,
the Executive's travel and entertainment expenses incurred in connection with
the performance of his duties under this Agreement, in each case upon
presentation to the Company of an itemized account of such expenses in such form
as the Company may reasonably require.
Section 9. Termination of Employment with Severance Benefits.
-------------------------------------------------
(a) The Executive shall be entitled to the severance benefits
described in section 9(b) in the event that:
(i) his employment with the Company and the Bank terminates during
the Employment Period as a result of the Executive's voluntary resignation
within 90 days following:
(A) the failure of the Board or the Board of Directors of the
Bank ("Bank Board") as the case may be, to appoint or re-appoint or
elect or re-elect the Executive to the position with the Company or
the Bank stated in section 3 of this Agreement (or a more senior
office);
(B) if the Executive is a member of the Board or the Bank Board
as the case may be, the failure of the shareholders of the Company or
the Bank to elect or re-elect the Executive to the Board or the Bank
Board or the failure of the Board or the Bank Board (or the nominating
committee thereof) to nominate the Executive for such election or re-
election;
(C) the expiration of a 30-day period following the date on
which the Executive gives written notice to the Company of its or the
Bank's material failure, whether by amendment of the Company's
Certificate of Incorporation, the Bank's Restated Organization
Certificate, the Company's By-Laws or the Bank's By-Laws, action of
the Board or the Bank Board or the Company's shareholders or the
Bank's shareholders or otherwise, to vest in the Executive the
functions, duties, or responsibilities prescribed in section 3 of this
Agreement, unless, during such 30-day period, the Company or the Bank
cures such failure; or
(D) the expiration of a 30-day period following the date on
which the Executive gives written notice to the Company of its or the
Bank's material breach of any term, condition or covenant contained in
this Agreement (including, without limitation any reduction of the
Executive's rate of base salary in effect from time to time and any
change in the terms and conditions of any compensation or benefit
program in which the Executive participates which, either individually
or together with other changes, has a material adverse effect on the
aggregate value of his total compensation
-4-
package), unless, during such 30-day period, the Company or the Bank
cures such failure; or
(E) a change in the Executive's principal place of employment
for a distance in excess of 50 miles from the Bank's principal office
in Rome, New York; or
(ii) the Executive's employment with the Company and the Bank is
terminated by the Company and the Bank for any reason other than for
"cause" as provided in section 11(a).
(b) Upon the occurrence of any of the events described in section
9(a) of this Agreement, the Company shall pay and provide to the Executive (or,
in the event of his death thereafter and prior to payment, to his estate):
(i) his earned but unpaid salary (including, without limitation, all
items which constitute wages under applicable law and the payment of which
is not otherwise provided for in this section 9(b)) as of the date of the
termination of his employment with the Company and the Bank, such payment
to be made at the time and in the manner prescribed by law applicable to
the payment of wages but in no event later than 30 days after termination
of employment;
(ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation
plans and programs maintained for the benefit of the Company's and the
Bank's officers and employees;
(iii) continued group life, health (including hospitalization, medical
and major medical), dental, accident and long term disability insurance
coverage in addition to that provided pursuant to section 9(b)(ii), for
the Remaining Unexpired Employment Period, equivalent to the coverage to
which he would have been entitled under such plans (as in effect on the
date of his termination of employment, or, if his termination of employment
occurs after a Change of Control, on the date of such Change of Control,
whichever benefits are greater), if he had continued working for the
Company and the Bank during the Remaining Unexpired Employment Period at
the highest annual rate of salary achieved during the Employment Period,
but taking into account any coverage provided from any subsequent employer;
(iv) within 30 days following the Executive's termination of
employment with the Company or the Bank, a lump sum payment, in an amount
equal to the present value of the salary (excluding any additional
payments made to the Executive in lieu of the use of an automobile) that
the Executive would have earned if he had continued working for the Company
and the Bank during the Remaining Unexpired Employment Period at the
highest annual rate of salary achieved during the Employment Period,
where such present value is to be determined using a discount rate equal to
the applicable short-term federal rate prescribed under section 1274(d) of
the Internal Revenue Code of 1986, as amended ("Code"), compounded using
the
-5-
compounding periods corresponding to the Company's regular payroll periods
for its officers, such lump sum to be paid in lieu of all other payments of
salary provided for under this Agreement in respect of the period following
any such termination;
(v) within 30 days following the Executive's termination of
employment with the Company or the Bank, a lump sum payment in an amount
equal to the excess, if any, of:
(A) the present value of the aggregate benefits to which he
would be entitled under any and all qualified and non-qualified
defined benefit pension plan maintained by the Company or the Bank in
which Executive participates, if he were 100% vested thereunder and
had continued working for the Company and the Bank during the
Remaining Unexpired Employment Period at the highest annual rate of
salary achieved during the Employment Period; over
(B) the present value of the benefits to which he is actually
entitled under such defined benefit pension plans as of the date of
his termination;
where such present values are to be determined using the mortality tables
prescribed under section 415(b)(2)(E)(v) of the Code and a discount rate,
compounded monthly, equal to the annualized rate of interest prescribed by
the Pension Benefit Guaranty Corporation for the valuation of immediate
annuities payable under terminating single-employer defined benefit plans
for the month in which the Executive's termination of employment occurs
("Applicable PBGC Rate");
(vi) within 30 days following the Executive's termination of
employment with the Company or the Bank, a lump sum payment in an amount
equal to the present value of the additional employer contributions to
which he would have been entitled under any and all qualified and non-
qualified defined contribution plans maintained by the Company or the Bank
in which Executive participates, as if he were 100% vested thereunder and
had continued working for the Company and the Bank during the Remaining
Unexpired Employment Period at the highest annual rate of salary achieved
during the Employment Period and making the maximum amount of employee
contributions, if any, required under such plan or plans, such present
value to be determined on the basis of a discount rate, compounded using
the compounding period that corresponds to the frequency with which
employer contributions are made to the relevant plan, equal to the
Applicable PBGC Rate;
(vii) the payments that would have been made to the Executive under
any cash or stock bonus or long-term or short-term cash incentive
compensation plan maintained by, or covering employees of, the Company or
the Bank if he had continued working for the Company and the Bank during
the Remaining Unexpired Employment Period and had earned the maximum bonus
or incentive award in each
-6-
calendar year that ends during the Remaining Unexpired Employment Period,
such payments to be equal to the product of:
(A) the maximum percentage rate at which an award was ever
available to the Executive under such incentive compensation plan;
multiplied by
(B) the salary that would have been paid to the Executive
during each such calendar year at the highest annual rate of salary
achieved during the Employment Period;
such payments to be made (without discounting for early payment) within 30
days following the Executive's termination of employment;
(viii) upon the surrender of options or appreciation rights issued
to the Executive under any stock option and appreciation rights plan or
program maintained by, or covering employees of, the Company or the Bank, a
lump sum payment in an amount equal to the product of:
(A) the excess of (I) the fair market value of a share of
stock of the same class as the stock subject to the option or
appreciation right, determined as of the date of termination of
employment, over (II) the exercise price per share for such option or
appreciation right, as specified in or under the relevant plan or
program; multiplied by
(B) the number of shares with respect to which options or
appreciation rights are being surrendered.
For purposes of this section 9(b)(viii), the Executive shall be deemed
fully vested in all options and appreciation rights under any stock option
or appreciation rights plan or program maintained by, or covering employees
of, the Company or the Bank, even if he is not vested under such plan or
program; and
(ix) upon the surrender of any shares awarded to the Executive under
any restricted stock plan maintained by, or covering employees of, the
Company or the Bank, a lump sum payment in an amount equal to the product
of:
(A) the fair market value of a share of stock of the same
class of stock granted under such plan, determined as of the date of
the Executive's termination of employment; multiplied by
(B) the number of shares which are being surrendered.
For purposes of this section 9(b)(ix), the Executive shall be deemed fully
vested in all shares awarded under any restricted stock plan maintained by,
or covering employees of, the Company or the Bank, even if he is not vested
under such plan.
-7-
The Company and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Executive's efforts, if any, to
mitigate damages. The Company and the Executive further agree that the Company
may condition the payments and benefits (if any) due under sections 9(b)(iii),
(iv), (v), (vi), (vii), (viii) and (ix) on the receipt of the Executive's
resignation from any and all positions which he holds as an officer, director or
committee member with respect to the Company, the Bank or any subsidiary or
affiliate of either of them.
Section 10. Death and Disability Benefits
-----------------------------
(a) In the event the Executive's employment with the Company
terminates during the Employment Period because of the Executive's death, then
the Company shall pay to the Executive's designated beneficiary for the one year
period following Executive's death, periodic payments equal in the aggregate to
the Executive's annual base salary as in effect on the date of his death. For
the one year period following Executive's death, Executive's dependents, as
defined under the group health (including hospitalization, medical and major
medical) and dental plans sponsored by the Company or the Bank from time to
time, shall be provided continued coverage under such plans, provided that they
continue to remit to the Company or Bank, as the case may be, any premium
payments Executive was required to pay for such coverage prior to his death.
The continued coverage provided under this section 10 shall be in addition to,
and shall not count as, coverage required to be provided under any applicable
law. For the purposes of this Agreement, Executives designated beneficiary shall
be the person designated as such by Executive in a writing submitted to the
Company. If no written designation is made, Executive's designated beneficiary
shall be his spouse or in the event he has no spouse, his estate.
(b) In the event that Executive's employment with the Company is
terminated because of his inability to perform his duties under this Agreement
by reason of illness or other physical or mental disability determined in the
discretion of the Board to be permanent, based on medical evidence the Board
finds acceptable, the Company shall continue to pay Executive his base salary in
effect as of the date he is determined to be permanently disabled, for the
Remaining Unexpired Employment Period, but reduced by any payments Executive
receives during such period under or pursuant to any short or long term
disability plan or policy sponsored by the Company or the Bank.
Section 11. Termination without Additional Company Liability. In the
------------------------------------------------
event that the Executive's employment with the Company shall terminate during
the Employment Period on account of:
(a) the discharge of the Executive for "cause," which, for purposes
of this Agreement, shall mean a discharge because the Board and the Bank
Board determine that the Executive: (i) has willfully and intentionally
failed to perform his assigned duties under this Agreement (including for
these purposes, the Executive's inability to perform such duties as a
result of drug or alcohol dependency); (ii) has willfully and intentionally
engaged in dishonest or illegal conduct in connection with his performance
of services for the Company
-8-
or the Bank or has been convicted of a felony; (iii) has willfully
violated, in any material respect, any law, rule, regulation, written
agreement or final cease-and-desist order with respect to his performance
of services for the Company or the Bank, as determined by the Board and the
Bank Board; or (iv) has willfully and intentionally breached the material
terms of this Agreement; provided, however, that, if the Executive engages
in any of the acts described in section 11(a)(i) or (a)(iv) above, the
Company shall provide the Executive with written notice of its intent to
discharge the Executive for cause, and the Executive shall have 30 days
from the date on which the Executive receives such notice to cure any such
acts; and provided, further, that on and after the date that a Change of
Control occurs, a determination under this section 11 shall require the
affirmative vote of at least three-fourths of the members of the Board and
the Bank Board acting in good faith and such vote shall not be made prior
to the expiration of a 60-day period following the date on which the Board
and the Bank Board shall, by written notice to the Executive, furnish to
him a statement of its grounds for proposing to make such determination,
during which period the Executive shall be afforded a reasonable
opportunity to make oral and written presentations to the members of the
Board and the Bank Board, and to be represented by his legal counsel at
such presentations, to refute the grounds for the proposed determination;
or
(b) the Executive's voluntary resignation from employment with the
Company and the Bank (including retirement) for reasons other than those
specified in section 9(a)(i) or Section 12;
then the Company shall have no further obligations under this Agreement, other
than the payment to the Executive of his earned but unpaid salary as of the date
of the termination of his employment and the provision of such other benefits,
if any, to which he is entitled as a former employee under the Company's and the
Bank's employee benefit plans and programs and compensation plans and programs.
For purposes of this section 11, 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 Company and the
Bank. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board and the Bank Board or based upon the
written advice of counsel for the Company or 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 Company and the Bank. The cessation of employment
of the Executive shall not be deemed to be for "cause" within the meaning of
section 11(a) unless and until there shall have been delivered to the Executive
a copy of a resolution duly adopted by the affirmative vote of three-fourths of
the members of the Board and the Bank Board at a meeting of the Board and the
Bank Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board and the Bank Board), finding that, in the
good faith opinion of the Board and the Bank Board, the Executive is guilty of
the conduct described in section 11(a) above, and specifying the particulars
thereof in detail.
-9-
Section 12. Termination Upon or Following a Change of Control.
-------------------------------------------------
(a) A Change of Control of the Company ("Change of Control") shall
be deemed to have occurred upon the happening of any of the following events:
(i) approval by the stockholders of the Company of a transaction
that would result in the reorganization, merger or consolidation of the
Company, respectively, with one or more other persons, other than a
transaction following which:
(A) at least 51% of the equity ownership interests of the
entity resulting from such transaction are beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended "Exchange Act") in substantially the same
relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the outstanding
equity ownership interests in the Company; and
(B) at least 51% of the securities entitled to vote generally
in the election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially the same relative
proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) at least 51% of the securities entitled to vote
generally in the election of directors of the Company;
(ii) the acquisition of all or substantially all of the assets of the
Company or beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of the outstanding
securities of the Company entitled to vote generally in the election of
directors by any person or by any persons acting in concert, or approval by
the stockholders of the Company of any transaction which would result in
such an acquisition;
(iii) a complete liquidation or dissolution of the Company, or
approval by the stockholders of the Company of a plan for such liquidation
or dissolution;
(iv) the occurrence of any event if, immediately following such
event, at least 50% of the members of the Board of the Company do not
belong to any of the following groups:
(A) individuals who were members of the Board of the Company on
the date of this Agreement; or
-10-
(B) individuals who first became members of the Board of the
Company after the date of this Agreement either:
(I) upon election to serve as a member of the Board of the
Company by affirmative vote of three-quarters of the members of
such Board, or of a nominating committee thereof, in office at
the time of such first election; or
(II) upon election by the stockholders of the Company to
serve as a member of the Board of the Company, but only if
nominated for election by affirmative vote of three-quarters of
the members of the Board of the Company, or of a nominating
committee thereof, in office at the time of such first
nomination;
provided, however, that such individual's election or nomination did
not result from an actual or threatened election contest (within the
meaning of Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of the
Board of the Company; or
(v) any event which would be described in section 12(a)(i), (ii),
(iii) or (iv) if the term "Bank" were substituted for the term "Company"
therein or any event that results in a "Change of Control of the Bank"
within the meaning of the "Change in Bank Control Act" and the rules and
regulations promulgated by the Federal Deposit Insurance Agency ("FDIC").
In no event, however, shall a Change of Control be deemed to have occurred as a
result of: (i) any acquisition of securities or assets of the Company, the Bank,
or a subsidiary of either of them, by the Company, the Bank, or a subsidiary of
either of them, or by any employee benefit plan maintained by any of them; or
(ii) the conversion of Rome MHC to a stock form company and the issuance of
additional shares of the Company in connection therewith. For purposes of this
section 12(a), the term "person" shall have the meaning assigned to it under
sections 13(d)(3) or 14(d)(2) of the Exchange Act.
(b) In the event of a Change of Control, Executive shall be entitled
to the payments and benefits described in Section 9(b) in the event of his
termination of employment with the Company under any of the following
circumstances:
(i) resignation, voluntary or otherwise, by Executive at any time
during the Employment Period following his demotion, loss of title, office
or significant authority or responsibility, or following any reduction in
any element of his package of compensation and benefits;
-11-
(ii) resignation, voluntary or otherwise, by Executive at any time
during the Employment Period following any relocation of his principal
place of employment or any change in working conditions at such principal
place of employment which Executive, in his reasonable discretion,
determines to be embarrassing, derogatory or otherwise adverse;
(iii) resignation, voluntary or otherwise, by Executive at any time
during the Employment Period following the failure of any successor to the
Company in the Change of Control to include Executive in any compensation
or benefit program maintained by it or covering any of its executive
officers, unless Executive is already covered by a substantially similar
plan of the Company which is at least as favorable to him;
(iv) resignation, voluntary or otherwise, for any reason whatsoever
following the effective date of the Change of Control; or
(v) termination by the Company for any reason other than "cause" as
defined under section 11.
(c) In the event Executive's employment with the Company terminates
after a Change of Control under any of the circumstances described in section
12(b), Executive shall be entitled to the payments and benefits described in
section 9(b).
Section 13. Tax Indemnification.
-------------------
(a) This section 13 shall apply if the Executive's employment is
terminated upon or following (i) a Change of Control (as defined in section 12
of this Agreement); or (ii) a change "in the ownership or effective control" of
the Company or the Bank or "in the ownership of a substantial portion of the
assets" of the Company or the Bank within the meaning of section 280G of the
Code. If this section 13 applies, then, if for any taxable year, the Executive
shall be liable for the payment of an excise tax under section 4999 of the Code
with respect to any payment in the nature of compensation made by the Company,
the Bank or any direct or indirect subsidiary or affiliate of the Company or the
Bank to (or for the benefit of) the Executive, the Company shall pay to the
Executive an amount equal to X determined under the following formula:
X = E x P
----------------------------------------
1 - [(FI x (1 - SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under section 4999
of the Code;
P = the amount with respect to which such excise tax is assessed,
determined without regard to this section 12;
FI = the highest marginal rate of income tax applicable to the
Executive under the Code for the taxable year in question;
-12-
SLI = the sum of the highest marginal rates of income tax applicable
to the Executive under all applicable state and local laws for
the taxable year in question; and
M = the highest marginal rate of Medicare tax applicable to the
Executive under the Code for the taxable year in question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) the Executive under the terms of this Agreement, or
otherwise, and on which an excise tax under section 4999 of the Code will be
assessed, the payment determined under this 12(a) shall be made to the
Executive on the earlier of (i) the date the Company, the Bank or any direct or
indirect subsidiary or affiliate of the Company or the Bank is required to
withhold such tax, or (ii) the date the tax is required to be paid by the
Executive.
(b) Notwithstanding anything in this section 13 to the contrary, in
the event that the Executive's liability for the excise tax under section 4999
of the Code for a taxable year is subsequently determined to be different than
the amount determined by the formula (X + P) x E, where X, P and E have the
meanings provided in section 13(a), the Executive or the Company, as the case
may be, shall pay to the other party at the time that the amount of such excise
tax is finally determined, an appropriate amount, plus interest, such that the
payment made under section 13(a), when increased by the amount of the payment
made to the Executive under this section 13(b) by the Company, or when reduced
by the amount of the payment made to the Company under this section 13(b) by the
Executive, equals the amount that should have properly been paid to the
Executive under section 13(a). The interest paid under this section 13(b) shall
be determined at the rate provided under section 1274(b)(2)(B) of the Code. To
confirm that the proper amount, if any, was paid to the Executive under this
section 13, the Executive shall furnish to the Company a copy of each tax return
which reflects a liability for an excise tax payment made by the Company, at
least 20 days before the date on which such return is required to be filed with
the Internal Revenue Service.
Section 14. Covenant Not To Compete.
-----------------------
The Executive hereby covenants and agrees that, in the event of his
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one year following the date of his
termination of employment with the Company and the Bank (or, if less, for the
Remaining Unexpired Employment Period), he shall not, without the written
consent of the Company, become an officer, employee, consultant, director or
trustee of any savings bank, savings and loan association, savings and loan
holding company, bank or bank holding company, or any direct or indirect
subsidiary or affiliate of any such entity, that entails working within Oneida
county or any other county in which the Company or the Bank maintains an office;
provided, however, that this section 14 shall not apply if the Executive's
employment is terminated for the reasons set forth in section 9(a).
-13-
Section 15. Confidentiality.
---------------
Unless he obtains the prior written consent of the Company, the
Executive shall keep confidential and shall refrain from using for the benefit
of himself, or any person or entity other than the Company or any entity which
is a subsidiary of the Company or of which the Company is a subsidiary, any
material document or information obtained from the Company, or from its parent
or subsidiaries, in the course of his employment with any of them concerning
their properties, operations or business (unless such document or information is
readily ascertainable from public or published information or trade sources or
has otherwise been made available to the public through no fault of his own)
until the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this section 15 shall prevent the Executive,
with or without the Company's consent, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding to the extent that such participation or
disclosure is required under applicable law.
Section 16. Solicitation.
------------
The Executive hereby covenants and agrees that, for a period of one
year following his termination of employment with the Company and the Bank, he
shall not, without the written consent of the Company and the Bank, either
directly or indirectly:
(a) 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 Company, the Bank
or any of their respective subsidiaries or affiliates to terminate his or
her employment and accept employment or become affiliated with, or provide
services for compensation in any capacity what soever to, any savings
bank, savings and loan association, bank, bank holding company, savings and
loan holding company, or other institution engaged in the business of
accepting deposits, making loans or doing business within the county
specified in section 14;
(b) provide any information, advice or recommendation with respect to
any such officer or employee of any savings bank, savings and loan Bank,
bank, bank holding company, savings and loan holding company, or other
institution engaged in the business of accepting deposits, making loans or
doing business within the counties specified in section 14; that is
intended, or that a reasonable person acting in like circumstances would
expect, to have the effect of causing any officer or employee of the
Company, the Bank, or any of their respective subsidiaries or affiliates to
terminate his employment and accept employment or become affiliated with,
or provide services for compensation in any capacity whatsoever to, any
savings bank, savings and loan association, bank, bank holding company,
savings and loan holding company, or other institution engaged in the
business of accepting deposits, making loans or doing business within the
county specified in section 14;
-14-
(c) 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 Company, the Bank or any of their perspective subsidiaries to terminate
an existing business or commercial relationship with any of them.
Section 17. No Effect on Employee Benefit Plans or Programs.
-----------------------------------------------
The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Company, by the Bank or by the
Executive, shall have no effect on the rights and obligations of the parties
hereto under the Company's or the Bank's qualified or non-qualified retirement,
pension, savings, thrift, profit-sharing or stock bonus plans, group life,
health (including hospitalization, medical and major medical), dental, accident
and long term disability in surance plans or such other employee benefit plans
or programs, or compensation plans or programs, as may be maintained by, or
cover employees of, the Company or the Bank from time to time; provided,
however, that nothing in this Agreement shall be deemed to duplicate any
compensation or benefits provided under any agreement, plan or program covering
the Executive to which the Company is a party and any duplicative amount payable
under any such agreement, plan or program shall be applied as an offset to
reduce the amounts otherwise payable hereunder.
Section 18. Successors and Assigns.
----------------------
This Agreement will inure to the benefit of and be binding upon the
Executive, his legal representatives and testate or intestate distributees, and
the Company and the Bank and their respective successors and assigns, including
any successor by merger or consolidation or a statutory receiver or any other
person or firm or corporation to which all or substantially all of the assets
and business of the Company may be sold or otherwise transferred. Failure of
the Company to obtain from any successor its express written assumption of the
Company's obligations hereunder at least 60 days in advance of the scheduled
effective date of any such succession shall be deemed a material breach of this
Agreement.
Section 19. Notices.
-------
Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
If to the Executive:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-15-
If to the Company or the Bank:
Rome Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chairman of the Board of Directors
----------------------------------
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: V. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
----------------------
Section 20. Indemnification for Attorneys' Fees.
-----------------------------------
(a) The Company shall indemnify, hold harmless and defend the
Executive against reasonable costs, including legal fees and expenses, incurred
by him in connection with or arising out of any action, suit or proceeding in
which he may be involved, as a result of his efforts, in good faith, to defend
or enforce the terms of this Agreement. For purposes of this Agreement, any
settlement agreement which provides for payment of any amounts in settlement of
the Company's or the Bank's obligations hereunder shall be conclusive evidence
of the Executive's entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
(b) The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.
Section 21. Severability.
------------
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
-16-
Section 22. Waiver.
------
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be
made in writing, designated as a waiver, and signed by the party against whom
its enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
Section 23. Counterparts.
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
Section 24. Governing Law.
-------------
Except to the extent preempted by federal law, this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of New York applicable to contracts entered into and to be performed entirely
within the State of New York.
Section 25. Headings and Construction.
-------------------------
The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.
Section 26. Entire Agreement; Modifications.
-------------------------------
This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
Section 27. Non-duplication.
---------------
In the event that the Executive shall perform services for the Bank or
any other direct or indirect subsidiary or affiliate of the Company or the Bank,
any compensation or benefits provided to the Executive by such other employer
shall be applied to offset the obligations of the Company hereunder, it being
intended that this Agreement set forth the aggregate compensation and benefits
payable to the Executive for all services to the Company, the Bank and all of
their respective direct or indirect subsidiaries and affiliates.
-17-
Section 28. Required Regulatory Provisions.
------------------------------
Notwithstanding anything herein contained to the contrary, any
payments to the Executive by the Company, 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. (S)1828(k), and any
regulations promulgated thereunder.
-18-
In Witness Whereof, the Company has caused this Agreement to be
executed and the Executive has hereunto set his hand, all as of the day and year
first above written.
Executive
___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
ATTEST: Rome Bancorp, Inc.
By_______________________
Secretary By_________________________________
Name:
Title:
[Seal]
-19-
