Exhibit 10.1
A MENDED AND R ESTATED E MPLOYMENT A GREEMENT
This A MENDED AND R ESTATED E MPLOYMENT A GREEMENT (the “Agreement”) is made and
entered into as of January 1, 2008 by and between CMS
B ANCORP
, I NC . , a
Delaware corporation having an office at 123 Main Street, White
Plains, New York 10601 (the “Company”) and
J OHN
R ITACCO (the “Executive”).
I NTRODUCTORY S TATEMENT
The Board of Directors of the
Company has concluded that it is in the best interests of the
Company and its shareholders to secure a continuity in management.
They also consider it desirable to establish a working environment
for the Executive which minimizes the personal distractions that
might result from possible business combinations in which the
Company might be involved. For these reasons, the Board of
Directors of the Company has decided to offer to enter into a
contract with the Executive for his future services. The Executive
has accepted this offer.
The terms and conditions which the
Company and the Executive have agreed to are as follows.
A GREEMENT
Section 1. Employment
.
The Company hereby continues to
employ the Executive, and the Executive hereby accepts 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 Company shall employ the
Executive during an initial period of three (3) years
beginning on January 1, 2008 (the “Employment
Commencement Date”) and ending on December 31, 2010, and
during the period of any additional extensions described in section
2(b) (the “Employment Period”).
(b) The Board of Directors of the
Company shall conduct an annual review of the Executive’s
performance during the first calendar quarter of each calendar year
beginning with the first annual anniversary of the Employment
Commencement Date (each, an “Anniversary Date”). The
Board may elect to extend the term of this Agreement for an
additional one (1) year period beyond the date on which it
would otherwise have expired, by providing a written notice of
renewal to the Executive during the year preceding the year in
which its term is scheduled to end.
(c) Except as otherwise expressly
provided in this Agreement, any reference in this Agreement to the
term “Remaining Unexpired Employment Period” as of any
date shall
mean the lesser of two (2) years and the
period beginning on such date and ending on the last day of the
Employment Period (determined by taking into account any extension
or extensions) pursuant to section 2(b) hereof).
(d) Nothing in this Agreement shall
be deemed to prohibit the Company from terminating the
Executive’s employment before the end of the Employment
Period with or without notice for any reason. This Agreement shall
determine the relative rights and obligations of the Company and
the Executive in the event of any such termination. In addition,
nothing in this Agreement shall require the termination of the
Executive’s employment at the expiration of the Employment
Period. Any continuation of the Executive’s employment beyond
the expiration of the Employment Period shall be on an
“at-will” basis unless the Company and the Executive
agree otherwise.
Section 3. Duties
.
The Executive shall serve as Chief
Executive Officer and President of the Company, having such power,
authority and responsibility and performing such duties as are
prescribed by or under the Company’s By-Laws and as are
customarily associated with such positions. 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 their
respective best interests. The Executive shall be entitled to four
(4) weeks vacation per year.
Section 4. Cash
Compensation .
In consideration for the services to
be rendered by the Executive hereunder, the Company shall pay to
him a salary at an initial annual rate of TWO HUNDRED NINETY
THOUSAND DOLLARS ($290,000), payable in approximately equal
installments in accordance with its customary payroll practices for
senior officers. The Company’s Board of Directors 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 (12) months, and may, at its
discretion, approve a salary increase. In addition to salary, the
Executive may receive other cash compensation from the Company for
services hereunder at such times, in such amounts and on such terms
and conditions as the Board of Directors of the Company may
determine.
Section 5. Employee Benefit
Plans and Programs .
During the Employment Period, the
Executive shall be treated as an employee of the Company 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,
in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and
consistent with the Company’s customary practices.
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Section 6. Indemnification
and Insurance .
(a) During the Employment Period and
for so long as the Executive is subject for suit on claims related
to his performance of the duties described in section 3 of this
Agreement, the Company shall cause the Executive to be covered by
and named as an insured under any policy or contract of insurance
obtained by them to insure their directors and officers against
personal liability for acts or omissions in connection with service
as an officer or director of the Company or the Community Savings
Bank (the “Bank”) or service in other capacities at
their request. 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.
(b) To the maximum extent permitted
under applicable law, during the Employment Period and for so long
as the Executive is subject to suits, claims or proceedings (other
than frivolous ones) related to his performance of the duties
described in section 3 of this Agreement, the Company shall defend
and indemnify the Executive against and hold him harmless from any
costs, damages, losses and exposures arising out of a action, suit
or proceeding (other than frivolous ones) in which he may be
involved by reason of his having been a director or officer of the
Company to the fullest extent and on the most favorable terms and
conditions that similar defense and indemnification is offered to
any director or officer of the Company or any subsidiary or
affiliate thereof.
(c) The Executive, the Company and
the Bank agree that the termination benefits described in this
section 6 are intended to be exempt from Section 409A
(“Section 409A”) of the Internal Revenue Code of 1986,
as amended (the “Code”), as certain indemnification and
liability insurance plans.
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 of Directors of the Company (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 nor shall it violate any applicable
laws or regulations. 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 and generally applicable to all similarly situated
executives and that such activities are not prohibited by any
applicable laws or regulations.
Section 8. Working
Facilities and Expenses .
Executive’s principal place of
employment shall be at the Company’s executive offices at the
address first above written or at such other location as the
Company and Executive may mutually agree upon. The Company shall
provide the Executive at his principal place of
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employment with a private office, secretarial
services, and other support services and facilities suitable to his
position with the Company and necessary or appropriate in
connection with the performance of his assigned duties under this
Agreement. The Company shall provide to the Executive for his
exclusive use an automobile owned or leased by the Company and
appropriate to his position, to be used in the performance of his
duties hereunder, including commuting to and from his personal
residence. The Company shall reimburse Executive for his ordinary
and necessary business expenses, including, without limitation, all
expenses associated with his business use of the aforementioned
automobile, fees for memberships in such clubs and organizations as
Executive and the Company shall mutually agree are necessary and
appropriate for business purposes, and his 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. The Company shall issue appropriate tax
reporting forms to the IRS for any personal use of the
Executive’s automobile.
Section 9. Termination Due
to Death .
The Executive’s employment
with the Company shall terminate, automatically and without any
further action on the part of any party to this Agreement, on the
date of the Executive’s death. In such event:
(a) The Company shall pay to the
Executive’s estate his earned but unpaid compensation
(including, without limitation, salary and all other items which
constitute wages under applicable law) as of the date of his
termination of employment as determined consistently with Treasury
Regulation Section 1.409A-1(h)(1)(ii). This payment shall be
made at the time and in the manner prescribed by law applicable to
the payment of wages but in no event later than thirty
(30) days after the date of the Executive’s termination
of employment.
(b) The Company shall provide the
benefits, if any, due to the Executive’s estate, surviving
dependents or his designated beneficiaries under the employee
benefit plans and programs and compensation plans and programs
maintained for the benefit of the officers and employees of the
Company. The time and manner of payment or other delivery of these
benefits and the recipients of such benefits shall be determined
according to the terms and conditions of the applicable plans and
programs.
The payments and benefits described
in sections 9(a) and (b) shall be referred to in this
Agreement as the “Standard Termination
Entitlements.”
Section 10. Termination Due
to Disability .
The Company may terminate the
Executive’s employment upon a determination that the
Executive is eligible for and shall receive long-term disability
benefits under the Bank’s long-term disability insurance
program. In such event, the Company shall pay and deliver to the
Executive (or in the event of his death before payment, to his
estate and surviving dependents and beneficiaries, as applicable)
the Standard Termination Entitlements. A termination of employment
due to disability under this section 10 shall be effected by notice
of termination given to the Executive by the Company and shall take
effect on the later of the effective date of termination specified
in such notice or the date on which the notice of termination is
deemed given to the Executive.
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Section 11. Discharge with
Cause .
(a) The Company may terminate the
Executive’s employment during the Employment Period, and such
termination shall be deemed to have occurred with
“Cause”, only if:
(i) The Board of Directors of the
Company, by majority vote of their entire membership, determine
that the Executive should be discharged because of fraud, willful
misconduct involving material job responsibilities, breach of
fiduciary duty involving personal profit, intentional failure to
perform his customary and standard duties under this Agreement,
conviction of a willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) which
materially and adversely affects the Company’s business or
the Executive’s ability to perform his customary and standard
duties under this Agreement or violation of a final cease and
desist order, or any material breach of this Agreement;
and
(ii) at least forty-five
(45) days prior to the votes contemplated by section 11(a)(i),
the Company has provided the Executive with written notice of its
intent to discharge the Executive for Cause, detailing with
particularity the facts and circumstances which are alleged to
constitute Cause (the “Notice of Intent to Discharge”);
and
(iii) after the giving of the Notice
of Intent to Discharge and before the taking of the votes
contemplated by section 11(a)(i), the Executive (together with his
legal counsel, if he so desires) is afforded a reasonable
opportunity to make both written and oral presentations before the
Board of Directors of the Company for the purpose of refuting the
alleged grounds for Cause for his discharge; and
(iv) after the votes contemplated by
section 11(a)(i), and after the Executive has received a reasonable
opportunity of at least fourteen (14) days to cure any conduct
reasonably capable of being cured, the Company have furnished to
the Executive a notice of termination which shall specify the
effective date of his termination of employment (which shall in no
event be earlier than the date on which such notice is deemed
given) and include a copy of a resolution or resolutions adopted by
the Board of Directors of the Company, certified by its corporate
secretary and signed by each member of the Board of Directors
voting in favor of adoption of the resolution(s), authorizing the
termination of the Executive’s employment with Cause and
stating with particularity the facts and circumstances found to
constitute Cause for his discharge (the “Final Discharge
Notice”).
(b) If the Executive is discharged
during the Employment Period with Cause, the Company shall pay and
provide to him (or, in the event of his death, to his estate,
his
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surviving beneficiaries and his dependents) the
Standard Termination Entitlements only. Following the giving of a
Notice of Intent to Discharge, the Company shall temporarily
suspend the Executive’s duties and authority and, in such
event, shall also suspend the payment of salary and other cash
compensation, but not the Executive’s participation in
retirement, insurance and other employee benefit plans. If the
Executive is not discharged, or is discharged without Cause, within
forty-five (45) days after the giving of a Notice of Intent to
Discharge, payments of salary and cash compensation shall resume,
and all payments withheld during the period of suspension shall be
promptly restored. If the Executive is discharged with Cause not
later than forty-five (45) days after the giving of the Notice
of Intent to Discharge, all payments withheld during the period of
suspension shall be deemed forfeited and shall not be included in
the Standard Termination Entitlements. If the Company does not give
a Final Discharge Notice to the Executive within ninety
(90) days after giving a Notice of Intent to Discharge, the
Notice of Intent to Discharge shall be deemed withdrawn and any
future action to discharge the Executive with Cause shall require
the giving of a new Notice of Intent to Discharge.
Section 12. Discharge
without Cause .
The Company may discharge the
Executive at any time during the Employment Period and, unless such
discharge constitutes a discharge with Cause, the Company shall,
subject to Employee’s execution of a general release of
claims in a form reasonably satisfactory to the Bank, pay and
deliver to the Executive (or in the event of his death before
payment, to his estate and surviving dependents and beneficiaries,
as applicable):
(a) the Standard Termination
Entitlements.
(b) continued group life, health
(including hospitalization, medical and major medical), dental,
accident and long-term disability coverage plans under the plans
and programs maintained by the Company for similarly situated
employees until the earlier to occur of:
(A) the date the Executive first
becomes eligible for such benefit coverage plans under the plans or
programs maintained by a subsequent employer; or
(B) the date the Remaining Unexpired
Employment Period terminates, as extended as applicable under
Section 2(a) above;
(c) an amount (the “Salary
Severance Payment”) equal to the greater of (1) the
Executive’s annual salary at the rate in effect immediately
prior to his termination of employment, or (2) the salary that
Executive would have earned if he had continued working for the
Company during the Remaining Unexpired Employment Period, as
extended as applicable under Section 2(a) above, at the
highest annual rate of salary achieved during that portion of the
Employment Period which is prior to Executive’s termination
of employment with the Company payable in a lump sum payment with
no reduction for present value applied, such Salary Severance
Payment 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; and
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(d) an amount equal to the value of
the annual bonuses that the Executive would have earned if he had
continued working for the Company during the Remaining Unexpired
Employment Period, as extended as applicable under
Section 2(a) above, at the highest annual rate of salary
achieved during the period of three (3) years ending
immediately prior to the date of termination (the “Bonus
Severance Payment”). The Bonus Severance Payment shall be
computed using the following formula:
BSP = SSP x (ABP / ASP)
where “BSP” is the
amount of the Bonus Severance Payment (before the deduction of
applicable federal, state and local withholding taxes);
“SSP” is the amount of the Salary Severance Payment
(before the deduction of applicable federal, state and local
withholding taxes); “ABP” is the aggregate of the
annual bonuses paid or declared (whether or not paid) for the most
recent period of three (3) calendar years to end on or before
the Executive’s termination of employment; and
“ASP” is the aggregate base salary actually paid to the
Executive during such period of three (3) calendar years. The
Bonus Severance Payment shall be in lieu of any claim to a
continuation of participation in annual bonus plans of the Company
which the Executive might otherwise have and shall be payable at
the times that such bonuses would have been paid to the Executive
had he remained employed by the Company.
For purposes of the
remainder of this Agreement, the payments and benefits (if any) due
under sections 12(b), 12(c), and 12(d) shall be referred to as the
“Additional Termination Entitlements.” In addition, the
payments described in sections 12(a), 12(c) and 12(d) shall be made
within 2 1 / 2 months following the end of the
taxable year of the Executive or the Company, whichever is longer,
in which the termination event occurs. To that end, the Executive,
the Company and the Bank agree that the termination benefits
described in sections 12(a), 12(c) and 12(d) are intended to be
exempt from Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(4) as short-term deferrals and the
termination benefits described in this section 12(b) are intended
to be exempt from Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(1) as non-taxable benefits.
Section 13. Resignation
.
(a) The Executive may resign from
his employment with the Company at any time. A resignation under
this section 13 shall be effected by written notice of resignation
given by the Executive to the Company and shall take effect on the
later of the effective date
