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Exhibit 10.2
EMPLOYMENT AGREEMENT WITH GEORGE STRAYTON
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement") is
made and entered into as of the 8 th day of December, 2008
("Effective Date"), by and between Provident Bank, a savings bank
organized and existing under the laws of the United States of
America and having its executive offices at 400 Rella Boulevard,
Montebello, New York 10901 ("Bank"), and George Strayton
("Executive"). The Bank is a wholly-owned subsidiary of Provident
New York Bancorp ("Company").
WITNESSETH:
WHEREAS , Executive currently serves as an executive officer of
the Bank pursuant to the Amended and Restated Employment Agreement
entered into as of October 31, 2006 (the "Prior Agreement");
and
WHEREAS , in order to comply with new Internal Revenue
Code Section 409A, the Prior Agreement is being restated and
is superseded in its entirety by this Agreement.
NOW, THEREFORE , in consideration of the premises and the
mutual covenants and obligations hereinafter set forth, the Bank
and Executive hereby agree as follows:
1. Employment. The Bank hereby agrees to
continue the employment of the Executive and the Executive hereby
agrees to continue such employment, during the period and upon the
terms and conditions set forth in this Agreement. All actions that
may be undertaken by the Bank with respect to the Executive’s
employment with the Bank pursuant to this Agreement shall be
undertaken by the Board of Directors of the Bank.
2. Employment Period .
(a) Three Year Contract; Daily Renewal . The
Executive’s period of employment with the Bank ("Employment
Period") shall begin on the Effective Date and shall renew daily,
such that the remaining unexpired term of the Agreement shall
always be thirty-six (36) months, until the date that the Bank
gives the Executive written notice of non-renewal ("Non-Renewal
Notice"). The Employment Period shall end on the date that is
thirty-six (36) months after the date of the Non-Renewal
Notice, unless the parties agree that the Employment Period shall
end on an earlier date. Notwithstanding the preceding provisions of
this Section 2(a), the Employment Period under this Agreement
shall automatically terminate on the last day of the calendar month
in which the Executive attains age 68.
(b) Annual Performance Evaluation . On either a fiscal
year or calendar year basis, (consistently applied from year to
year), the Bank shall conduct an annual evaluation of the
Executive’s performance. The annual performance evaluation
proceedings shall be included in the minutes of the Board meeting
that next follows such annual performance review.
(c) Continued Employment Following Termination
of Employment Period . Nothing in this Agreement shall mandate
or prohibit a continuation of the Executive’s employment
following the expiration of the Employment Period upon such terms
and conditions as the Bank and the Executive may mutually
agree.
3. Duties .
(a) Title; Reporting Responsibility . The Executive shall
serve as the President and Chief Executive Officer of the Bank,
with power, authority and responsibility commensurate with those of
a senior officer. As Chief Executive Officer, the Executive shall
directly report to the Board. The Executive shall also be nominated
as a member of the Board of Directors of the Bank, subject to
election by shareholders.
(b) Time Commitment . The Executive shall devote his full
business time and attention to the business and affairs of the Bank
and shall use his best efforts to advance the interests of the
Bank.
4. Annual Compensation .
(a) Base Salary .
(i) Annual Salary . In consideration for the services
performed by the Executive under this Agreement, the Bank shall pay
to the Executive an annual salary ("Base Salary"). The Base Salary
shall be paid in approximately equal installments in accordance
with the Bank’s customary payroll practices. The Bank shall
review the Executive’s Base Salary at least annually for
possible upward adjustment, but, the Executive’s Base Salary
shall not be reduced without the Executive’s consent. For the
fiscal year that began on October 1, 2005, the
Executive’s Base Salary is $450,000.
(ii) Automatic Adjustment Following a Change in Control .
For each calendar year that begins on or after the date on which a
Change in Control (as defined in Section 9) occurs, and
continuing through the remainder of the Employment Period, the
Executive’s Base Salary shall automatically increase by the
greater of (1) six percent (6%) or (2) the average
annual rate of base salary increases provided for the immediately
preceding calendar year to individuals employed by the Bank at the
level of assistant vice president or above (but excluding the
Executive from the determination of such average).
(b) Incentive Compensation . The Executive shall be
eligible to participate in any bonus and incentive compensation
programs (not including equity compensation programs, which are
covered by Section 4(c) of this Agreement) established by the
Bank from time to time for senior executive officers, including the
Bank’s Executive Officer Management Incentive Program.
Compensation payable pursuant to such programs shall be referred to
herein as "Incentive Compensation." For the fiscal year that ended
on September 30, 2005, the Executive received Incentive
Compensation of $100,800.
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(c) Equity Compensation . The Executive
shall be eligible to participate in any equity compensation
programs established by the Bank from time to time for senior
executive officers, including, but not limited to, the 2004 Stock
Incentive Plan.
(d) Employee Benefit Plans; Paid Time
Off
(i) Benefit Plans . During the Employment Period, the
Executive shall be an employee of the Bank and shall be entitled to
participate in the Bank’s (i) tax-qualified retirement
plans (i.e., the Bank’s Defined Benefit Pension Plan, 401(k)
Plan and Employee Stock Ownership Plan (including, for purposes of
this Agreement, any successor plans thereto));
(ii) nonqualified retirement plans (i.e., the Bank’s
2005 Supplemental Executive Retirement Plan (including any
predecessor or successor plan thereto, the "SERP"));
(iii) group life, health and disability insurance plans; and
(iv) any other employee benefit plans and programs in
accordance with the Bank’s customary practices, provided he
is a member of the class of employees authorized to participate in
such plans or programs.
(ii) Paid Time Off . The Executive shall be entitled to a
minimum of five (5) weeks of paid vacation time each year
during the Employment Period (measured on a fiscal or calendar year
basis, in accordance with the Bank’s usual practices), as
well as sick leave, holidays and other paid absences in accordance
with the Bank’s policies and procedures for senior
executives. Any unused paid time off during an annual period shall
be treated in accordance with the Bank’s personnel policies
as in effect from time to time.
5. Outside Activities and Board
Memberships
During the term of this Agreement, the Executive shall not,
directly or indirectly, provide services on behalf of any
competitive financial institutions, any insurance company or
agency, any mortgage or loan broker or any other competitive entity
or on behalf of any subsidiary or affiliate of any such competitive
entity, as an employee, consultant, independent contractor, agent,
sole proprietor, partner, joint venturer, corporate officer or
director; nor shall the Executive acquire by reason of purchase
during the term of this Agreement the ownership of more than 5% of
the outstanding equity interest in any such competitive entity. In
addition, during the term of this Agreement, the Executive shall
not, directly or indirectly, acquire a beneficial interest, or
engage in any joint venture in real estate with the Bank. Subject
to the foregoing, and to the Executive’s right to continue to
serve as an officer and/or director or trustee of any business
organization as to which he was so serving on the Effective Date of
this Agreement, the Executive may serve on boards of directors of
unaffiliated corporations, subject to Board approval, which shall
not be unreasonably withheld, and such services shall be presumed
for these purposes to be for the benefit of the Bank. Except as
specifically set forth herein, the Executive may engage in personal
business and investment activities, including real estate
investments and personal investments in the stocks, securities and
obligations of other financial institutions (or their holding
companies). Notwithstanding the foregoing, in no event shall the
Executive’s outside activities, services, personal business
and investments materially interfere with the performance of his
duties under this Agreement.
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6. Working Facilities and
Expenses
(a) Working Facilities . The Executive’s principal
place of employment shall be at the Bank’s principal
executive office or at such other location upon which the Bank and
the Executive may mutually agree.
(b) Expenses .
(i) Ordinary Expenses . The Bank shall reimburse the
Executive for his ordinary and necessary business expenses,
incurred in connection with the performance of his duties under
this Agreement, upon presentation to the Bank of an itemized
account of such expenses in such form as the Bank may reasonably
require and subject to the following conditions: (A) the
expenses reimbursed by the Bank in one calendar year shall not
affect the expenses paid or reimbursed by the Bank in another
calendar year, (B) reimbursement for an expense shall be made
within a reasonable period of time following the date on which the
Bank receives the Executive’s documentation of the expense,
provided that no reimbursement for an expense shall be made after
the last day of the calendar year following the calendar year in
which the expense was incurred.
(ii) Automobile . The Bank shall provide the Executive
with an automobile suitable to the Executive’s position and
such automobile may be used by the Executive in carrying out his
duties under this Agreement, including commuting between his
residence and his principal place of employment and other personal
use. The Bank shall be responsible for the cost of maintenance and
servicing such automobile and for insurance, gasoline and oil for
such automobile. The Executive shall be responsible for the payment
of any taxes on account of his personal use of such automobile.
7. Termination of Employment with Bank
Liability
(a) Reasons for Termination . In the event that the
Executive’s employment with the Bank shall terminate during
the Employment Period on account of:
(i) The Executive’s voluntary resignation from employment
with the Bank within one year after any event constituting "Good
Reason", where "Good Reason" means any of the following events
(provided that, in the case of (A), (B), (D) and (F), no such
event shall constitute "Good Reason" unless the Executive shall
have given written notice of such event to the Bank within ninety
(90) days after the initial occurrence thereof and the Bank
shall have failed to cure the situation within thirty
(30) days following the delivery of such notice (or such
longer cure period as may be agreed upon by the parties)):
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(A)
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the failure to re-appoint the
Executive to the officer position set forth under Section 3
and, with respect to the Executive’s service as a director,
the failure to re-nominate the Executive for election to the
Board;
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(B)
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a material change in
Executive’s functions, duties, or responsibilities, including
those with respect to the Company, which change would cause
Executive’s position to become one of lesser responsibility,
importance, or scope;
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(C)
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liquidation or dissolution of the
Bank or the Company other than liquidations or dissolutions that
are caused by reorganizations that do not affect the status of the
Executive;
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(D)
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a material breach of this Agreement
by the Bank; or
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(E)
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a Change in Control Date of the Bank
as defined in Section 9, except to the extent that
Section 7(c) hereof would apply to the Executive’s
termination of employment, in which event Executive will be deemed
to have terminated his employment pursuant to the provisions of
Section 7(c) instead;
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(F)
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the effective date of a Non-Renewal
Notice, delivered by the Bank to the Executive pursuant to
Section 2(a); or
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(ii)
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the discharge of the Executive by
the Bank for any reason other than for "Cause" as defined in
Section 8(a); or
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(iii)
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the termination of the
Executive’s employment with the Bank as a result of the
Executive’s "total and permanent disability" which, for
purposes of this Agreement, shall be determined by the Bank, based
upon competent and independent medical evidence that the
Executive’s physical or mental condition is such that he is
totally and permanently incapable of performing the essential tasks
of his position hereunder, and, to the extent that any payments
hereunder on account of disability are subject to Section 409A
of the Internal Revenue Code of 1986 ("Code"), "disability" shall
have the meaning set forth in Code Section 409A and the
regulations thereunder;
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then the Bank shall provide the benefits and pay
to the Executive the amounts provided for under
Section 7(b).
(b) Severance Pay . Subject to the limitations set forth
in Sections 7(e) and (f) below, upon the termination of the
Executive’s employment with the Bank under circumstances
described in Section 7(a) of this Agreement, the Bank shall
pay to the Executive (or, in the event of the Executive’s
death after the event described in Section 7(a) has occurred,
the Bank shall pay to the Executive’s surviving spouse,
beneficiary or estate) an amount equal to the following, provided
that, in each case where an amount to be paid below is the "present
value" of an amount, such "present value" shall be determined using
a discount rate that is equal to the short-term "applicable federal
rate" with monthly compounding published by the Internal Revenue
Service for the month preceding the Executive’s termination
of employment:
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(i)
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within 60 days following his
termination of employment, his earned but unpaid Base Salary as of
the date of his termination of employment with the Bank;
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(ii)
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the benefits, if any, to which he is
entitled as a former employee under the Bank’s employee
benefit plans, payable in accordance with the terms of such
plans;
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(iii)
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continued life insurance coverage
and non-taxable health insurance benefits which will provide the
Executive with coverage for the remaining unexpired Employment
Period equivalent to the coverage to which he would have been
entitled if he had continued working for the Bank during the
remaining unexpired Employment Period with the same Base Salary as
was in effect on the date of his termination of employment
and life insurance coverage and non-taxable
health insurance benefits for the remainder of the
Executive’s lifetime and the lifetime of the
Executive’s spouse, equal to the greater of (A) the
insurance coverage provided to retirees of the Bank as of the
Effective Date of this Agreement or (B) the insurance coverage
provided to retirees of the Bank as of the effective date of the
Executive’s termination of employment with the
Bank;
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(iv)
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within 60 days following his
termination of employment, a lump sum payment, as liquidated
damages, in an amount equal to the present value of the Base Salary
that the Executive would have earned (but offset by any payments
made under any short-term or long-term disability plan or program
maintained by the Bank) if he had continued working for the Bank
and serving as a director for the remaining unexpired Employment
Period at his final rate of Base Salary;
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(v)
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within 60 days following his
termination of employment with the Bank, a lump sum payment in an
amount equal to the excess, if any, of: (A) the present value
of the benefits to which the Executive would be entitled under the
Bank’s Defined Benefit Pension Plan if he had the additional
years of service that he would have had accrued if he had continued
working for the Bank during the remaining unexpired Employment
Period earning his final rate of Base Salary during that period,
over (B) the present value of the benefits to which he is
actually entitled under the Bank’s Defined Benefit Pension
Plan as of the date of his termination;
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(vi)
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within 60 days following his
termination of employment with the Bank, a lump sum payment in an
amount equal to the present value of the Bank’s contributions
that would have been made on his behalf under the Bank’s
401(k) Plan and Employee Stock Ownership Plan if the Executive had
continued working for the Bank for the remaining unexpired
Employment
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Period assuming (A) the
Executive earned his final rate of Base Salary during that period;
(B) the Executive made the maximum amount of employee
contributions permitted, if any, under such plans; and (C) the
Bank’s contributions are at least equal to the rate of
contributions made to the Plan during the plan year immediately
preceding his termination of employment;
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(vii)
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within 60 days following his
termination of employment with the Bank, a lump sum payment in an
amount equal to the excess, if any, of (A) the present value
of the benefits to which he would be entitled under the SERP (and
any other deferred compensation plan for management or highly
compensated employees that are maintained by the Bank), if he had
continued working for the Bank for the remaining unexpired
Employment Period following his termination of employment earning
his final rate of Base Salary during the remaining unexpired
Employment Period, over (B) the present value of the benefits
to which he is actually entitled under any such plan, as of the
date of his termination of employment with the Bank;
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(viii)
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within 60 days following his
termination of employment with the Bank, a lump sum payment in an
amount equal to three (3) times the average of the prior three
(3) years Incentive Compensation earned or received by him
under all incentive compensation plans or programs adopted and
maintained by the Bank; and
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(ix)
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stock options shall vest in
accordance with the terms of the stock plan under which they were
granted.
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(c) Change in Control . Notwithstanding
the foregoing, upon the termination of the Executive’s
employment with the Bank following a Change in Control, the Bank:
(1) shall provide the employee benefits described in
Section 7(b)(iii) for a period of thirty-six (36) months
following the termination of employment date; (2) shall pay
the Executive (or in the event of his death, to his surviving
spouse or such other beneficiary as the Executive may designate in
writing, or if there is neither, to his estate), the amounts
described in Sections 7(b)(iv) through 7(b)(viii) above as if the
"remaining unexpired Employment Period" under the Agreement is
thirty-six (36) months from the termination of employment
date; and (3) shall credit the Executive with full vesting of
all stock or stock-based awards granted to the Executive under any
plan adopted by the Bank or the Company. The Company and the
Executive have entered into a separate agreement with respect to
reimbur
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