Exhibit 10.2
A MENDED AND R ESTATED E MPLOYMENT A GREEMENT
This A MENDED AND RESTATED E MPLOYMENT A GREEMENT (“Agreement”) is made and entered
into effective as of January 1, 2008, by and between
C OMMUNITY S AVINGS B ANK , a
New York savings bank having its executive offices at 123 Main
Street, White Plains, New York 10601 (“Bank”) and
J OHN
R ITACCO (the “Executive”).
W ITNESSETH :
W HEREAS , the Executive has been elected to serve the
Bank in the capacity of President and Chief Executive Officer;
and
W HEREAS , the Executive is willing to serve the Bank on
the terms and conditions hereinafter set forth;
N OW ,
T HEREFORE
, in consideration of the premises
and the mutual covenants and conditions hereinafter set forth, the
Bank and the Executive hereby agree as follows:
Section 1.
Employment.
The Bank agrees 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. The Employment Period
shall be for an initial term of three (3) years beginning on
January 1, 2008 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
Bank 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 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 Bank 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 Bank 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 Bank and the Executive agree otherwise.
Section 3. Duties
.
The Executive shall serve as
President and Chief Executive Officer of the Bank, having such
power, authority and responsibility and performing such duties as
are prescribed by or under the By-Laws of the Bank 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, periods of illness
or approved leaves of absence and the activities covered by section
7 of this Agreement) to the business and affairs of the Bank and
shall use his best efforts to advance the interests of the Bank.
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 Bank 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 the Bank’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 (12) months, and may, in its discretion, approve an
increase in the Executive’s annual rate of salary. In
addition to salary, the Executive may receive other cash
compensation from the Bank for services hereunder at such times, in
such amounts and on such terms and conditions as the Board, as
applicable, may determine from time to time; provided,
however, that the Executive shall be paid (i) a bonus of
FORTY-FIVE THOUSAND DOLLARS ($45,000) in January of each year
during the Employment Period provided the Executive is employed by
the Bank on such date; and (ii) an additional incentive bonus
pursuant to the Bank’s incentive bonus plan payable on or
before March 15 of each year during the Employment Period if
the Executive has, during the twelve (12) month period ending
on the preceding December 31st, achieved those performance
objectives set forth to the Executive by the Bank for such period.
The Board shall during the first calendar quarter of each year
after 2008 conduct a review of the Executive’s salary and
benefits then in effect and will make such adjustments as the Board
deems appropriate in order to ensure that such salary and benefits
are commensurate with those paid by publicly-traded peer
institutions and will provide to the Executive the best purchase
priority permissible under applicable law.
Section 5. Employee Benefit
Plans and Programs.
During the Employment Period, the
Executive shall be treated as an employee of the Bank and shall be
entitled to participate in and receive benefits under any and all
qualified or non-qualified retirement, pension, savings, or
profit-sharing 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 as may from time to time be
maintained by, or cover employees of, the Bank, in accordance with
the terms and
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conditions of such employee benefit plans and
programs and consistent with the Bank’s customary practices.
Nothing paid to the Executive under any such plan or arrangement
will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.
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 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 Bank or service in other
capacities at the request of the Bank. 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 provided to other
officers and directors of the Bank.
(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 Bank shall defend and
indemnify the Executive against and hold him harmless from any
costs, damages, losses and exposures associated with such suits,
claims and proceedings (other than frivolous ones) and shall
advance to him or for his benefit all expenses incurred by him in
any such suit, proceeding (other than frivolous ones) or claim,
including any investigation but any defense and indemnification
provided under this section 6 shall be limited by 12 CFR
Section 545.121.
(c) The Executive 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 (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 (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 Bank
and generally applicable to all similarly situated
executives.
Section 8. Working
Facilities and Expenses.
The Executive’s principal
place of employment shall be at the Bank’s executive offices
at the address first above written or at such other location as the
Bank and the Executive may mutually agree upon. The Bank shall
provide the Executive at his principal place of employment with a
private office, secretarial services, and other support services
and facilities suitable to his position with the Bank and necessary
or appropriate in connection with the performance of his assigned
duties under this Agreement. The Bank shall provide to
the
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Executive for his exclusive use an automobile
owned or leased by the Bank and appropriate to his position, to be
used in the performance of his duties hereunder, including
commuting to and from his personal residence. The Bank shall
reimburse the 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 the Executive and
the Bank 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 Bank of an
itemized account of such expenses in such form as the Bank may
reasonably require. The Bank shall issue appropriate tax reporting
forms to the IRS for any personal use of the Executive’s
automobile.
Section 9. Termination of
Employment with Severance Benefits.
(a) The Executive shall be entitled
to the severance benefits described in section 9(b) herein in the
event that his employment with the Bank terminates during the
Employment Period under any of the following
circumstances:
(i) the Executive’s
resignation for Good Reason from employment with the Bank within
six (6) months following any of the following events, provided
that Executive has given the Bank written notice of the event
alleged to be Good Reason within 90 days after its occurrence and
that the Bank has not fully and reasonably cured the occurrence
within thirty (30) days after receiving such written notice of
it from the Executive:
(A) the failure of the Board to
appoint or re-appoint or elect or re-elect the Executive to the
position stated in section 3 of this Agreement or the failure to
elect or re-elect him as trustee of the Bank;
(B) the expiration of a thirty
(30) day period following the date on which the Executive
gives written notice to the Bank of its material failure, whether
by amendment of the Bank’s organization certificate or
By-Laws, or the Bank’s state charter or By-Laws, action of
the Board or otherwise, to vest in the Executive, or continue to
allow the Executive to perform, without material change or
diminution, the functions, duties, or responsibilities prescribed
in section 3 of this Agreement; or
(C) 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
or 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
package);
(D) the relocation of the
Bank’s offices at which the Executive is principally employed
to a location more than forty (40) miles from such
offices;
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(E) any purported termination of the
Executive’s employment in a manner inconsistent with section
10 of this Agreement;
(ii) the termination by the Bank of
the Executive’s employment with the Bank for any other reason
not described in section 9(a) other than a termination of the
Executive’s employment for “cause” or disability
as discussion in section 10 hereto; or
(iii) subject to the provisions of
section 10, the termination of the Executive’s employment for
any other reason;
then, the Bank shall provide the
benefits and pay to the Executive the amounts described in section
9(b).
(b) Upon the termination of the
Executive’s employment with the Bank under circumstances
described in section 9(a) of this Agreement, the Bank shall,
subject to Employee’s execution of a general release of
claims in a form reasonably satisfactory to the Bank, pay and
provide to the Executive (or, in the event of his death, to his
estate):
(i) the portion, if any, of the
compensation earned by the Executive through the date of the
termination of his employment with the Bank which remains unpaid as
of such date, 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 thirty (30) days after the Executive’s
termination of employment as determined consistently with Treasury
Regulation Section 1.409A-1(h)(1)(ii);
(ii) the benefits, if any, to which
he is entitled as a former employee under the employee benefit
plans and programs maintained by the Bank for their officers and
employees;
(iii) 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 Bank 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;
(iv) 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
the Executive would have earned if he had continued working for the
Bank during the Remaining Unexpired Employment Period at the
highest annual rate of salary achieved during that portion of the
Employment Period which is prior to the Executive’s
termination of employment with the Bank payable in a lump sum
payment with no 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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(v) an amount equal to the value of
the annual bonuses that the Executive would have earned if he had
continued working for the Bank during the Remaining Unexpired
Employment Period 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 Bank
which the Executive might otherwise have and shall be payable in a
lump sum with no present value applied.
The payments
described in sections 9(b)(iv) and 9(b)(v) shall be made within
2 1
/
2 months following the end of the
taxable year of the Executive or the Bank, whichever is longer, in
which the termination event occurs.
The Bank 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 Bank and the Executive further agr
