FORM OF BENEFICIAL MUTUAL SAVINGS BANK CHANGE IN CONTROL AGREEMENT
Exhibit10.7
FORM
OF
BENEFICIAL
MUTUAL SAVINGS BANK
This
AGREEMENT
(“Agreement”) is hereby entered into as of __________, 2007, by
and
between BENEFICIAL
MUTUAL SAVINGS BANK (the
“Bank”), a Pennsylvania-chartered savings bank, with its principal offices at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ________________ (“Executive”), and
BENEFICIAL
MUTUAL BANCORP, INC.
(the
“Company”), the holding company of the Bank, as guarantor.
WHEREAS,
the
Company and the Bank recognize the importance of Executive to their operations
and wish to protect Executive’s position in the event of a change in control for
the period provided for in this Agreement; and
WHEREAS,
Executive and the Boards of Directors of the Company and the Bank desire
to
enter into an agreement setting forth the terms and conditions of payments
due
to Executive in the event of a change in control and the related rights and
obligations of each of the parties.
NOW,
THEREFORE,
in
consideration of the promises and mutual covenants herein contained, it is
hereby agreed as follows:
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1.
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Term
of Agreement.
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a. The
term
of this Agreement shall be (i) the initial term, consisting of the period
commencing on the date of this Agreement (the “Effective Date”) and ending on
the date that is three (3) years after the Effective Date, plus (ii) any
and all
extensions of the initial term made pursuant to this Section 1. Notwithstanding
anything in this Section 1 to the contrary, the term of the Agreement shall
be fixed at twelve (12) months as of the effective date of a Change in
Control.
b. Commencing
on the first anniversary of the Effective Date and continuing each anniversary
date thereafter, the Board of Directors of the Bank (the “Board of Directors”)
may extend the term of this Agreement for an additional one (1) year period
beyond the then effective expiration date, provided that Executive shall
not
have given at least sixty (60) days’ written notice of Executive’s desire that
the term not be extended.
c. Notwithstanding
anything in this Section 1 to the contrary, this Agreement shall terminate
(i) if Executive or the Bank terminates Executive’s employment prior to a
Change in Control and (ii) on the first anniversary of the effective date
of a Change in Control.
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2.
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Change
in Control.
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a. Upon
the
occurrence of a Change in Control (as defined in Section 2c.) followed at
any
time during the remaining term of this Agreement by the termination of
Executive’s employment in accordance with the terms of this Agreement, other
than for Cause (as defined in Section 2d.), the provisions of Section 3 of
this
Agreement shall apply.
b. Upon
the
occurrence of a Change in Control, Executive shall have the right to elect
to
voluntarily terminate his employment at any time during the remaining term
of
this Agreement following the occurrence of an event constituting “Good Reason.”
“Good
Reason” means, unless Executive has consented in writing thereto, the occurrence
following a Change in Control, of any of the following:
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i.
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A
material reduction in Executive’s responsibilities or authority in
connection with his employment with the Company or the
Bank;
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ii.
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Assignment
to Executive of duties of a non-executive nature or duties for
which he is
not reasonably equipped by his skills and
experience;
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iii.
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A
reduction in salary or benefits contrary to the terms of this Agreement,
or, following a Change in Control as defined in Section 12 of this
Agreement, any reduction in salary or material reduction in benefits
below
the amounts to which Executive was entitled prior to the Change
in
Control;
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iv.
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Termination
of incentive and benefit plans (other than the Bank’s tax-qualified
plans), programs or arrangements, or reduction of Executive’s
participation to such an extent as to materially reduce their aggregate
value below their aggregate value as of the Effective Date;
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v.
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A
relocation of Executive’s principal business office by more than
thirty-five (35) miles from its current location;
or
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vi.
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Liquidation
or dissolution of the Company or the
Bank.
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Notwithstanding
the foregoing, a reduction or elimination of Executive’s benefits under one or
more benefit plans maintained by the Company or the Bank as part of a good
faith, overall reduction or elimination of such plans or benefits thereunder
applicable to all participants in a manner that does not discriminate against
Executive (except as such discrimination may be necessary to comply with
law)
shall not constitute an event of Good Reason or a material breach of this
Agreement, provided that benefits of the same type or to the same general
extent
as those offered under such plans are not available to other officers of
the
Company and the Bank, or any company that controls either of them, under
a plan
or plans in or under which Executive is not entitled to participate subsequent
to such reduction or elimination of benefits.
c. For
purposes of this Agreement, a “Change in Control” shall be deemed to occur on
the earliest of any of the following events:
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i.
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Merger:
The Company or the Bank merges into or consolidates with another
corporation, or merges another corporation into the Company or
the Bank,
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 or the Bank
immediately before the merger or
consolidation.
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ii.
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Acquisition
of Significant Share Ownership:
There is filed, or 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, 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 (b) 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 or the Bank’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 or the Bank’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
stockholders) 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 or the Bank sells to a third party all or substantially
all of
its assets.
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Notwithstanding
anything in this Agreement to the contrary, in no event shall the reorganization
of the Bank from the mutual holding company form of organization to the full
stock holding company form of organization (including the elimination of
the
mutual holding company) constitute a “Change in Control” for purposes of this
Agreement.
d. Executive
shall not have the right to receive termination benefits pursuant to Section
3
of this Agreement upon termination for Cause. Termination
for Cause shall mean termination of Executive’s employment because of, in the
good faith determination of the Board, Executive’s personal dishonesty,
incompetence, willful misconduct, any breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule, regulation (other than traffic violations or similar
offenses), final cease and desist order, or any material breach of any provision
of this Agreement. Notwithstanding the foregoing, Executive shall not be
deemed
to have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the affirmative vote
of
a majority of the entire membership of the Board of Directors at a meeting
of
the Board of Directors called and held for that purpose (after reasonable
notice
to Executive and an opportunity for him, together with counsel, to be heard
before the Board of Directors), finding that in the good faith opinion of
the
Board of Directors, Executive was guilty of conduct justifying termination
for
Cause and specifying the particulars thereof in detail. Executive shall not
have
the right to receive compensation or other benefits for any period after
termination for Cause. During the period beginning on the date of the Notice
of
Termination for Just Cause pursuant to Section 4 of this Agreement through
the
Date of Termination, stock options granted to Executive under any stock option
plan shall not be exercisable nor shall any unvested stock awards granted
to
Executive under any stock benefit plan of the Bank, the Company or any
subsidiary or affiliate thereof, vest. At the Date of Termination, such stock
options and any such unvested stock awards shall become null and void and
shall
not be exercisable by or delivered to Executive at any time subsequent to
such
termination for Cause.
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3.
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Termination
Benefits.
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a. If,
on or
after the effective date of a Change in Control, Executive’s employment is
voluntarily (in accordance with Section 2b.) or involuntarily terminated
(other
than for Cause) during the remaining term of this Agreement, Executive shall
receive:
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i.
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a
lump sum cash payment equal to 2.99 times the Executive’s “base amount,”
within the meaning of Section 280G(b)(3) of the Internal Revenue
Code of
1986, as amended (the “Code”). Such payment shall be made not later than
ten (10) calendar days following Executive’s termination of employment
under this Section 3.
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ii.
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Continued
benefit coverage under all Bank health and welfare plans which
Executive
participated in as of the date of the Change in Control (collectively,
the
“Employee Benefit Plans”) for a period of thirty-six (36) months following
Executive’s termination of employment. Said coverage shall be provided
under the same terms and conditions in effect on the date of Executive’s
termination of employment. Solely for purposes of benefits continuation
under the Employee Benefit Plans, Executive shall be deemed to
be an
active employee. To the extent that benefits required under this
Section
3a. cannot be provided under the terms of any Employee Benefit
Plan, the
Bank shall enter into alternative arrangements that will provide
Executive
with comparable benefits.
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b. Notwithstanding
any contrary provisions of this Section 3, in no event shall the aggregate
payments or benefits to be made or afforded to Executive (the “Termination
Benefits”) constitute an “excess parachute payment” under Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) or any successor thereto,
and to avoid such a result, the Termination Benefits will be reduced, if
necessary, to an amount that is one dollar ($1.00) less than an amount equal
to
three (3) times Executive’s “base amount,” as determined in accordance with said
Section 280G of the Code. The allocation of the reduction among the Termination
Benefits shall be determined by Executive.
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4.
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Notice
of Termination.
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a. Any
purported termination by the Bank or by Executive shall be communicated by
Notice of Termination to the other party hereto. For purposes of this Agreement,
a “Notice of Termination” shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth
in detail the facts and circumstances claimed to provide a basis for termination
of Executive’s employment.
b. “Date
of
Termination” shall mean the date specified in the Notice of Termination (which,
in the case of a termination for Cause, shall not be less than thirty (30)
days
from the date such Notice of Termination is given).
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5.
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Source
of Payments.
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All
payments provided for under this Agreement shall be timely paid in cash or
check
from the general funds of the Bank. The Company, however, unconditionally
guarantees payment and provision of all amounts and benefits due hereunder
to
Executive and, if such amounts and benefits due from the Bank are not timely
paid or provided by the Bank, such amounts and benefits shall be paid or
provided by the Company.
| 6. |
Effect
on Prior Agreements and Existing Benefit Plans.
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This
Agreement contains the entire understanding between the parties and supersedes
any prior agreement between the Bank or the Company and Executive, except
that
this Agreement shall not effectively reduce any benefit or compensation
otherwise inuring to Executive. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits
than
those available to him without reference to this Agreement. Nothing in this
Agreement shall confer upon Executive the right to continue in the employ
of the
Bank or the Company or shall impose on the Bank or the Company any obligation
to
retain Executive as an employee for any period.
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| 7. |
No
Attachment.
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a. Except
as
required by law, no right to receive payments under this Agreement shall
be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation or to execution, attachment, levy or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to do so shall be null, void and of no effect.
b. This
Agreement shall be binding upon, and inure to the benefit of, Executive,
the
Bank, the Company and their respective successors and assigns.
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Modification
and Waiver.
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a. This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties.
b. No
term
or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver
or
estoppel. No written waiver shall be deemed a continuing waiver unless
specifically stated as such, and each such waiver shall operate only as to
the
specific term or condition waived and shall not constitute a waiver of such
term
or condition for the future or as to any act other than that specifically
waived.
| 9. |
Severability.
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If,
for
any reason, any provision of this Agreement, or any part of any provision,
is
held invalid, such invalidity shall not affect the validity of any other
provision or part of this Agreement, and each such other provision and part
of
this Agreement shall continue in full force and effect.
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10.
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Headings
for Reference Only.
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The
headings of sections and paragraphs herein in this Agreement are included
solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement. In addition, any references to
the
masculine shall apply to both the masculine and the feminine.
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11.
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Governing
Law.
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Except
to
the extent preempted by federal law, the validity, interpretation, performance,
and enforcement of this Agreement shall be governed by the Commonwealth of
Pennsylvania, without regard to conflicts of law principles.
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12.
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Arbitration.
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Any
dispute or controversy arising under or in connection with this Agreement
shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in a location selected by Executive within fifty (50)
miles
from the location of the Bank, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of Executive’s right to
be paid until the Date of Termination during the pendency of any dispute
or
controversy arising under or in connection with this Agreement.
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13.
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Payment
of Legal Fees.
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All
reasonable legal fees and expenses paid or incurred by Executive pursuant
to any
dispute or question of interpretation relating to this Agreement shall be
paid
or reimbursed by the Bank or the Company, only if Executive is successful
pursuant to a legal judgment, arbitration or settlement.
| 14. |
Indemnification.
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The
Company or the Bank shall provide Executive (and Executive’s heirs, executors
and administrators) with coverage under a standard directors’ and officers’
liability insurance policy and shall indemnify Executive (and Executive’s heirs,
executors and administrators) to the fullest extent permitted under applicable
law against all expenses and liabilities reasonably incurred in connection
with
or arising out of any action, suit or proceeding in which Executive may be
involved by reason of having been a director or officer of the Company or
the
Bank (whether or not Executive continues to be a director or officer at the
time
of incurring such expenses or liabilities), such expenses and liabilities
to
include, but not be limited to, judgments, court costs, attorneys’ fees and the
costs of reasonable settlements.
| 15. |
Successors
to the Bank and the Company.
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The
Bank
and the Company shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all of the business or assets of the Bank or the Company,
expressly and unconditionally to assume and agree to perform the Bank’s and the
Company’s obligations under this Agreement, in the same manner and to the same
extent that the Bank and the Company would be required to perform if no such
succession or assignment had taken place.
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Required
Provisions.
In
the event any of the foregoing provisions of this Section 16 are
in
conflict with the terms of this Agreement, this Section 16 shall
prevail.
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a. The
Bank’s board of directors may terminate Executive’s employment at any time, but
any termination by the Bank, other than termination for Cause, shall not
prejudice Executive’s right to compensation or other benefits under this
Agreement. Executive shall not have the right to receive compensation or
other
benefits for any period after termination for Cause.
b. If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
§1818(e)(3) or (g)(1); the Bank’s obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may in its discretion:
(i)
pay Executive all or part of the compensation withheld while its contract
obligations were suspended; and (ii) reinstate (in whole or in part) any
of the
obligations which were suspended.
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c. If
Executive is removed and/or permanently prohibited from participating in
the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1),
all obligations of the Bank under this Agreement shall terminate as of the
effective date of the order, but vested rights of the contracting parties
shall
not be affected.
d. If
the
Bank is in default as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the Bank under this
Agreement shall terminate as of the date of default, but this paragraph shall
not affect any vested rights of the contracting parties.
e. All
obligations under this Agreement shall be terminated, except to the extent
determined that continuation of the contract is necessary for the continued
operation of the Bank: (i) by the Director of the OTS (or his or her designee),
at the time the Federal Deposit Insurance Corporation (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.
§1823(c); or (ii) by the Director of the OTS (or his or her 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.
f. Any
payments made to Executive pursuant to this Agreement, or otherwise, are
subject
to and conditioned upon their compliance with 12 U.S.C. §1828(k) and FDIC
regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification
Payments.
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SIGNATURES
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement effective as of the date first
set
forth above.
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ATTEST:
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BENEFICIAL
MUTUAL SAVINGS BANK
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| __________________________ |
By:
__________________________
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For
the Entire Board of Directors
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ATTEST:
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BENEFICIAL
MUTUAL BANCORP, INC.
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(Guarantor)
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| __________________________ |
By:
__________________________
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Corporate
Secretary
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For
the Entire Board of Directors
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[SEAL]
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WITNESS:
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EXECUTIVE
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| __________________________ | __________________________ |
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