Exhibit 10.1
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
This Amended and Restated Employment
Agreement (“Agreement”) is made and entered into as of
the 15th 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 Richard O. Jones
(“Executive”). The Bank is the wholly-owned subsidiary
of Provident New York Bancorp (“Company”).
WITNESSETH:
WHEREAS , Executive currently serves as an executive
officer of the Bank pursuant to the 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 amended and
restated in its entirety as herein set forth.
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 may be undertaken by the Chief Executive Officer
of the Bank (“CEO”), provided that the CEO shall report
such actions to the Bank’s Board of Directors
(“Board”) and such actions shall be subject to
ratification by the Board in accordance with the Bank’s
by-laws.
2. Employment Period
.
Two 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 be twenty-four (24) 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 twenty-four (24) months after the date of
the Non-Renewal Notice, unless that 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
65.
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(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 performance evaluation of the Executive’s performance,
unless notice of non-renewal has been given. 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 Executive
Vice President, Business Services of the Bank, with power,
authority and responsibility commensurate with those of a senior
officer. The Executive shall directly report to the CEO.
(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 $212,000.
(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 $25,100.
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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 four (4) 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 expire at the end of that period,
such that unused paid time off shall not be carried forward into
the following year and the Executive shall not be compensated for
unused paid time off.
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).
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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.
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 . The Bank shall
reimburse the Executive for his ordinary and necessary business
expenses and travel and entertainment 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.
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:
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(i)
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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) and
(D), 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 position set forth under
Section 3;
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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 provision of Section 7(c) instead; 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;
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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 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 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 two (2) times the average of the
prior two (2) 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.
Notwithstanding anything to the contrary herein, to the extent that
payments and benefits are payable pursuant to this
Section 7(c), no payments or benefits shall be paid to
Executive under Sections 7(b)(iii) through 7(b)(viii).
(d) Damages . The Bank and
the Executive hereby stipulate that the damages which may be
incurred by the Executiv
