Exhibit 10.6
CHANGE-OF-CONTROL SEVERANCE
AGREEMENT
THIS CHANGE-OF-CONTROL SEVERANCE
AGREEMENT (the “Agreement”) made this 23rd day of
October, 2002 (the “Effective Date”) by and between
Baltimore County Savings Bank, F.S.B. (the “Bank”), and
Bonnie M. Klein (the “Executive”).
WHEREAS, the Executive has
heretofore been employed by the Bank as an executive officer, and
desires to continue to be so employed; and the Bank desires the
continuation of such employment by the Executive; and
WHEREAS, the Bank deems it to be in
its best interest to provide the Executive with security in the
event of a Change of Control (as defined herein), and thereby to
facilitate his retention and insure an orderly transition following
a Change of Control: and
WHEREAS, the parties desire by the
Agreement to set forth their understanding as to their respective
rights and obligations in the event the Executive’s
employment terminates or is changed under the circumstances set
forth herein,
NOW, THEREFORE, it is AGREED as
follows:
1 . Definitions. For purposes
of this Agreement, the following terms have the meaning set forth
below:
(a) “Change in Duties”
shall mean any one or more of the following:
(i) a significant adverse change in
the status, title, position(s), responsibilities, or scope of the
Executive’s authorities or duties from those applicable to
him immediately prior to the date on which a Change of Control
occurs;
(ii) assignment to the Executive of
any duties or responsibilities which are inconsistent with the
Executive’s status, title, or position(s) as in effect
immediately prior to the date on which a Change of Control
occurs;
(iii) a material reduction in the
Executive’s total compensation from that provided to him
immediately prior to the date on which a Change of Control
occurs:
(iv) a diminution in the
Executive’s eligibility to participate in bonus, incentive
award, and other compensation plans which provide opportunities to
receive compensation from the opportunities under any such plans in
which the Executive was participating immediately prior to the date
on which a Change of Control occurs;
(v) a change in the location of the
Executive’s principal place of employment by the Bank or its
subsidiaries and affiliates by more than 30 miles from the location
where he was principally employed immediately prior to the date on
which a Change of Control occurs; or
(vi) a reasonable determination by
the Board of Directors of the Bank that, as a result of a Change of
Control and change in circumstances thereafter significantly
affecting the Executive’s position, the Executive is unable
to exercise the authorities, powers, functions or duties attached
to his position immediately prior to the date on which a Change of
Control occurs.
(b) A “Change of
Control” shall be deemed to have occurred if:
(i) the acquisition of ownership,
holding or power to vote more than 25% of the Bank’s or the
Company’s voting stock;
(ii) the acquisition of the ability
to control the election of a majority of the Bank’s or the
Company’s directors;
(iii) the acquisition of a
controlling influence over the management or policies of the Bank
or the Company by any person or by persons acting as a
“group” (within the meaning of Section 13(d) of
the Securities Exchange Act of 1934); or
(iv) during any period of two
consecutive years, individuals (the “Continuing
Directors”) who at the beginning of such period constitute
the Board of Directors of the Bank or the Company (the
“Existing Board”) cease for any reason to constitute at
least two-thirds thereof, provided that any individual whose
election or nomination for election as a member of the Existing
Board was approved by a vote of at least two-thirds of the
Continuing Directors then in office shall be considered a
Continuing Director.
Notwithstanding the foregoing, in
the case of (i), (ii) and (iii) hereof, ownership or
control of the Bank by the Company itself shall not constitute a
Change of Control. For purposes of this paragraph only, the term
“person” refers to an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form
of entity not specifically listed herein. The decision of the
Bank’s non-employee directors as to whether or not a Change
of Control has occurred shall be conclusive and binding.
(c) “Company” shall mean
BCSB Bankcorp, Inc. or any holding company that becomes sole owner
of the Bank.
(d) “Covered Period”
shall mean a period equal to twelve (12) months before the
occurrence of a Change of Control and eighteen (18) months
after the occurrence of a Change of Control.
(e) “Involuntary
Termination” shall mean (i) any involuntary termination,
or (ii) a resignation by the Executive within thirty
(30) days following any Change in Duties; provided, however,
that an Involuntary Termination shall not include either a
Termination for Cause, or any termination as a result of death,
disability, or normal retirement on or after attainment of age
sixty-five (65) pursuant to a retirement plan in which the
Executive was participating prior to any Change of
Control.
(f) “Termination for
Cause” shall include termination because of the
officer or employee’s personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease and desist order, or
material breach of any provision of this Agreement or any other
Agreement between Executive and the Bank.
(g) The term “Bank”
refers to the Bank and/or any succession in interest or any
assignees or transferees thereof.
2. Term. This Agreement shall
remain in effect for the period commencing on the Effective Date
and ending on the earlier of (i) the date thirty-six
(36) months after the Effective Date, and (ii) the date
on which the Executive voluntarily terminates employment with the
Bank. Additionally, on each annual anniversary date from the
Effective Date. the term of this Agreement may be extended for an
additional one (1) year period beyond the then effective
expiration date provided the Board of Directors of the Bank
determines in a duly adopted resolution that the performance of the
Executive has met the Board’s requirements and standards,
that it is in the Bank’s best interests to extend this
Agreement, and that this Agreement shall be extended.
3. Severance Payment on Change of
Control. If there is a Change of Control and if within
the Covered Period as defined herein (i) a Change in Duties as
defined herein occurs, or (ii) an Involuntary Termination as
defined herein occurs, or (iii) the Executive voluntarily
terminates employment for any reason within the 30-day period
beginning on the date of a Change of Control, then in that event
the Executive shall
(a) be paid an amount equal to 2.99
times the annualized cash compensation being paid to the Executive
in the immediately preceding twelve (12)&n
