Astoria
Federal Savings and Loan Association
Amended
and Restated
Employment Agreement
with Executive Officer
This Amended and Restated Employment
Agreement (the "Agreement") is made and entered into as
of January 1, 2009 by and between Astoria Federal Savings and Loan
Association , a savings association organized and
operating under the federal laws of the United States and having an
office at One Astoria Federal Plaza, Lake Success, New York
11042-1085 (the "Association") and, Alan P. Eggleston , an
individual residing at 28 Croft Place, Huntington, New York
11743, (the "Executive").
Whereas,
the Executive currently serves the Association
in the capacity of Executive Vice President, Secretary and General
Counsel and as Executive Vice President, Secretary and General
Counsel of the Association's savings and loan holding company,
Astoria Financial
Corporation, a publicly held business corporation
organized and operating pursuant to the laws of the State of
Delaware (the "Company"); and
Whereas,
the Association desires to assure for itself the
continued availability of the Executive's services and the ability
of the Executive to perform such services with a minimum of
personal distraction in the event of a pending or threatened Change
of Control (as hereinafter defined); and
Whereas,
the Executive is willing to continue to serve
the Association on the terms and conditions hereinafter set forth;
and
Whereas,
the Executive currently has an
employment contract with the Association entered into on January 1,
1996 (the “Initial Effective Date”), amended and
restated on January 1, 2000, and further amended as of August 15,
2007 (such agreement, as amended, the “Prior
Agreement”); and
Whereas
, the Executive and the Association
wish to further amend and modify the Prior Agreement pursuant to
Section 24 thereof for the purpose, among others, of compliance
with the applicable requirements of Section 409A of the Internal
Revenue Code of 1986 (the “Code”);
Now,
Therefore, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, the Association and
the Executive amend and restate in its entirety the Employment
Agreement by and between the Association and the Executive as
amended through August 15, 2007 so as to provide as follows from
and after the date hereof:
The Association 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"). The
Employment Period shall be for an initial term of three years
beginning on the Initial Effective Date and ending on the third
anniversary date of the Effective Date, plus such extensions, if
any, as are provided by the Board of Directors of the Association
(the “Board”) as provided below. Prior to the first
anniversary of the date of this Agreement and on each anniversary
date thereafter (each an "Anniversary Date) the Board shall review
the terms of this Agreement and the Executive's performance of
services hereunder and may, in the absence of objection from the
Executive, approve an extension of the Employment Period. In such
event, the Employment Period shall be extended to the third
anniversary of the relevant Anniversary Date.
(b) For all purposes of this Agreement, the term
"Remaining Unexpired Employment Period" as of any date shall mean
the period beginning on such date and ending on the Anniversary
Date on which the Employment Period (as extended pursuant to
Section 2(a) of this Agreement) is then scheduled to
expire.
(c) Nothing in this Agreement shall be deemed to
prohibit the Association from terminating the Executive's
employment at any time during the Employment Period with or without
notice for any reason; provided, however, that the relative rights
and obligations of the Association and the Executive in the event
of any such termination shall be determined pursuant to this
Agreement.
The Executive shall serve as Executive Vice
President, Secretary and General Counsel of the Association, having
such power, authority and responsibility and performing such duties
as are prescribed by or pursuant to the By-Laws of the Association
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, and periods
of illness or approved leaves of absence) to the business and
affairs of the Association and shall use his best efforts to
advance the interests of the Association.
Section 4.
Cash Compensation .
In consideration for the services to be rendered
by the Executive hereunder, the Association shall pay to him a
salary at an initial annual rate of FOUR HUNDRED SIXTY
TWO
THOUSAND DOLLARS ($462,000)
, payable in approximately equal installments in accordance
with the Association's customary payroll practices for senior
officers. At least annually during the Employment Period, the Board
shall review the Executive's annual rate of salary and may, in its
discretion, approve an increase therein. In no event shall the
Executive's annual rate of salary under this Agreement in effect at
a particular time be reduced without his or her prior written
consent and any such reduction in the absence of such consent shall
be a material breach of this Agreement. In addition to salary, the
Executive may receive other cash compensation from the Association
for services hereunder at such times, in such amounts and on such
terms and conditions as the Board may determine from time to
time.
Section 5.
Employee Benefit Plans and Programs .
During the Employment Period, the Executive
shall be treated as an employee of the Association 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
Association, in accordance with the terms and conditions of such
employee benefit plans and programs and compensation plans and
programs and consistent with the Association's customary
practices.
Section 6.
Indemnification and Insurance .
(a) During the Employment Period and for a
period of six (6) years thereafter, the Association 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
Association or service in other capacities at the request of the
Association. 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 Association.
(b) To the maximum extent permitted under
applicable law, during the Employment Period and for a period of
six (6) years thereafter, the Association shall indemnify the
Executive against, and hold him harmless from any costs,
liabilities, losses and exposures for acts or omissions in
connection with service as an officer or director of the
Association or service in other capacities at the request of the
Association, to the fullest extent and on the most favorable terms
and conditions that similar indemnification is offered to any
director or officer of the Association or any subsidiary or
affiliate thereof.
Section 7.
Other Activities .
(a) 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 Association and
generally applicable to all similarly situated
executives.
(b) The Executive may also serve as an officer
or director of the Company on such terms and conditions as the
Association and the Company may mutually agree upon, and such
service shall not be deemed to materially interfere with the
Executive's performance of his duties hereunder or otherwise result
in a material breach of this Agreement.
Section 8.
Working Facilities and Expenses .
The Executive's principal place of employment
shall be at the Association's executive offices at the address
first above written, or at such other location within Queens County
or Nassau County, New York at which the Association shall maintain
its principal executive offices, or at such other location as the
Association and the Executive may mutually agree upon. The
Association 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 or her position
with the Association and necessary or appropriate in connection
with the performance of his or her assigned duties under this
Agreement. The Association shall provide to the Executive for his
or her exclusive use an automobile owned or leased by the
Association and appropriate to his position, to be used in the
performance of his or her duties hereunder, including commuting to
and from his personal residence. The Association shall (i)
reimburse the Executive for all expenses associated with his or her
business use of the aforementioned automobile; (ii) reimburse the
Executive for his or her ordinary and necessary business expenses
incurred in the performance of his or her duties under this
Agreement (including but not limited to travel and entertainment
expenses) that are excludible from the Executive’s gross
income for federal income tax purposes; (iii) reimburse the
Executive for fees for memberships in such clubs and organizations
and such other expenses as the Executive and the Association shall
mutually agree are necessary and appropriate for business purposes,
in each case upon presentation to the Association of an itemized
account of such expenses in such form as the Association may
reasonably require, each such reimbursement payment to be made
promptly following receipt of the itemized account and in any event
not later than the last day of the calendar year following the
calendar year in which the expense was incurred. The
Executive shall be responsible for the payment of any taxes on
account of his personal use of the automobile provided by the
Association and on account of any other benefit provided
herein.
Section 9.
Termination of Employment with Severance Benefits
.
(a) The Executive shall be entitled to the
severance benefits described herein in the event that his
employment with the Association terminates during the Employment
Period under any of the following circumstances:
(i) the Executive's voluntary resignation from
employment with the Association within six (6) months
following:
(A) the failure of the Board to appoint or
re-appoint or elect or re-elect the Executive to the office of
Executive Vice President, Secretary and General Counsel (or a more
senior office) of the Association;
(B) if the Executive is a member of the Board,
the failure of the stockholders of the Association to elect or
re-elect the Executive to the Board or the failure of the Board (or
the nominating committee thereof) to nominate the Executive for
such election or re-election;
(C) the expiration of a thirty (30) day period
following the date on which the Executive gives written notice to
the Association of its material failure, whether by amendment of
the Association's Charter or By-laws, action of the Board or the
Association's stockholders or otherwise, to vest in the Executive
the functions, duties, or responsibilities prescribed in Section 3
of this Agreement as of the date hereof, unless, during such thirty
(30) day period, the Association cures such failure in a manner
determined by the Executive, in his or her discretion, to be
satisfactory;
(D) the expiration of a thirty (30) day period
following the date on which the Executive gives written notice to
the Association of its 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 and 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), unless, during such thirty (30)
day period, the Association cures such failure in a manner
determined by the Executive, in his or her discretion, to be
satisfactory; or
(E) the relocation of the Executive's principal
place of employment, without his or her written consent, to a
location outside of Nassau County and Queens County, New
York;
(ii) the termination of the Executive's
employment with the Association for any other reason not described
in Section 10(a).
In such event and subject to Section 27 of this
Agreement, the Association 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 Association under circumstances described in
Section 9(a) of this Agreement, the Association shall pay and
provide to the Executive (or, in the event of the Executive's death
following the Executive's termination of employment, to his or her
estate):
(i) his or her earned but unpaid compensation
(including, without limitation, all items which constitute wages
under Section 190.1 of the New York Labor Law and the payment of
which is not otherwise provided for under this Section 9(b)) as of
the date of the termination of his or her employment with the
Association, such payment to be made at the time and in the manner
prescribed by law applicable to the payment of wages but in any
event not later than thirty (30) days after termination of
employment;
(ii) the benefits, if any, to which he or she is
entitled as a former employee under the employee benefit plans and
programs and compensation plans and programs maintained for
the benefit of the Association's officers and employees, including
the annual bonus (if any) to which he or she is entitled under any
cash-based annual bonus or performance compensation plan in effect
for the year in which his or her termination occurs, to be paid at
the same time and on the terms and conditions (including but not
limited to achievement of performance goals) applicable under the
relevant plan;
(iii) continued group life, health (including
hospitalization, medical and major medical), dental, accident and
long term disability insurance benefits, in addition to that
provided pursuant to Section 9(b)(ii), and after taking into
account the coverage provided by any subsequent employer, if and to
the extent necessary to provide for the Executive, for the
Remaining Unexpired Employment Period, coverage (including any
co-payments and deductibles, but excluding any premium sharing
arrangements, it being the intention of the parties to this
Agreement that the premiums for such insurance benefits shall be
the sole cost and expense of the Association) equivalent to the
coverage to which he or she would have been entitled under such
plans (as in effect on the date of his or her termination of
employment, or, if his or her termination of employment occurs
after a Change of Control, on the date of such Change of Control,
whichever benefits are greater), if he or she had continued working
for the Association during the Remaining Unexpired Employment
Period at the highest annual rate of salary or compensation, as
applicable, achieved during that portion of the Employment
Period which is prior to the Executive's termination of employment
with the Association;
(iv) thirty (30) days following the Executive's
termination of employment with the Association, a lump sum payment
in an amount representing an estimate of the salary that the
Executive would have earned if he or she had continued working for
the Association 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 Association (the "Salary Severance Payment"). The Salary
Severance Payment shall be computed using the following
formula:
"SSP" is the amount of the Salary Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes;
"BS" is 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
Association;
"NY" is the Remaining Unexpired Employment
Period expressed as a number of years (rounded, if such period is
not a whole number, to the next highest whole number).
The Salary
Severance Payment shall be paid in lieu of all other payments of
salary provided for under this Agreement in respect of the period
following any such termination.
(v) a lump sum payment (the "DB Severance
Payment") in an amount equal to the excess, if any, of:
(A) the present value of the aggregate benefits
to which he or she would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by, or
covering employees of, the Association, if he or she were 100%
vested thereunder and had continued working for the Association
during the Remaining Unexpired Employment Period, such benefits to
be determined as of the date of termination of employment by adding
to the service actually recognized under such plans an additional
period equal to the Remaining Unexpired Employment Period and by
adding to the compensation recognized under such plans for the most
recent year recognized all amounts payable pursuant to Sections
9(b)(i), (iv), (vii), (viii) and (ix) of this Agreement;
over
(B) the present value of the benefits to which
he or she is actually entitled under such defined benefit pension
plans as of the date of his or her termination;
The DB Severance Payment shall be computed using
the following formula:
"DBSP" is the amount of the DB Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes;
"SEVLS" is the sum of the present value of the
defined benefit pension benefits that have been or would be accrued
by the Executive under all qualified and non-qualified defined
benefit pension plans of which the Association or any of its
affiliates or subsidiaries are a sponsor and in which the Executive
is or, but for the completion of any service requirement that would
have been completed during the Remaining Unexpired Employment
Period, would be a participant utilizing the following
assumptions:
(I) the executive is 100% vested in the plans
regardless of actual service,
(II) the benefit to be valued shall be a single
life annuity with monthly payments due on the first of each month
and with a guaranteed payout of not less than 120
payments,
(III) the calculation shall be made utilizing
the same mortality table and interest rate as would be utilized by
the plan on the date of termination as if the calculation were
being made pursuant to Section 417(e)(3) of the Code, as
amended;
(IV) for purpose of calculating the Executive's
monthly or annual benefit under the defined benefit plans,
additional service equal to the Remaining Unexpired Employment
Period (rounded up to the next whole year if such period is not a
whole number when expressed in years) shall be added to the
Executive's actual service to calculate the amount of the benefit;
and
(V) for purpose of calculating the Executive's
monthly or annual benefit under the defined benefit plans, the
following sums shall be added to the Executive's compensation
recognized under such plans for the most recent year
recognized:
(1) payments made pursuant to Section
9(b)(i);
(2) the Salary Severance Payment;
(3) the Bonus Severance Payment;
(4) the Option Surrender Payment; and
(5) the RRP Surrender Payment.
"LS" is the sum of the present value of the
defined benefit pension benefits that are vested benefits actually
accrued by the Executive under all qualified and non-qualified
defined benefit pension plans maintained by, or covering employees
of, the Association or any of its affiliates or subsidiaries in
which the Executive is or, but for the completion of any service
requirement, would be a participant utilizing the following
assumptions:
(I) the benefit to be valued shall be a single
life annuity with monthly payments due on the first day of each
month and with a guaranteed payout of not less than 120 payments,
and
(II) the calculation shall be made utilizing the
same mortality table and interest rate as would be utilized by the
plan on the date of termination as if the calculation were being
made pursuant to Section 417(e)(3) of the Code;
The DB
Severance Payment shall be converted into the same form, and paid
at the same time, and in the same manner, as benefits under the
corresponding non-qualified plan.
(vi) a lump sum payment (the "Defined
Contribution Severance Payment") equal to the sum of:
(A) an estimate of the additional employer
contributions to which he or she would have been entitled under any
and all qualified and non-qualified defined contribution pension
plans, excluding the employee stock ownership plans, maintained by,
or covering employees of, the Association or any of its affiliates
or subsidiaries as if he or she were 100% vested thereunder and had
continued working for the Association during the Remaining
Unexpired Employment Period (the "401K Severance Payment");
and
(B) an estimate of the value of the additional
assets which would have been allocable to him or her through debt
service or otherwise under any and all qualified and non-qualified
employee stock ownership plans, maintained by, or covering
employees of, the Association or any of its affiliates or
subsidiaries as if he or she were 100% vested thereunder and had
continued working for the Association during the Remaining
Unexpired Employment Period, based on the fair market value of such
assets at termination of employment (the "ESOP Severance
Payment").
The Defined Contribution Severance Payment shall
be calculated as follows:
"DCSP" is the amount of the Defined Contribution
Severance Payment, before the deduction of applicable federal,
state and local withholding taxes;
"401KSP" is the amount of the 401K Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes; and
"ESOPSP" is the amount of the ESOP Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes.
The 401KSP shall be calculated as
follows:
401KSP= (401KC x NY) +UVB
"401KC" is the sum of the Association
Contributions as defined in the Association's Incentive Savings
Plan or, if made under another defined contribution pension plan
other than an employee stock ownership plan, the comparable
contribution made for the benefit of the Executive during the one
year period which shall end on the date of his or her termination
of his or her employment with the Association; and
"NY" is the Remaining Unexpired Employment
Period expressed as a number of years (rounded, if such period is
not a whole number, to the next highest whole number);
and
“UVB” is the actual balance credited
to the Executive's account under the applicable plan at the date of
his or her termination of employment that is not vested and does
not become vested as a consequence of such termination of
employment.
The ESOPSP shall be calculated as
follows:
ESOPSP = (((ALL
x FMV) + C) x NY) + UVB
“ALL" is the sum of the number of shares
of the Association's common stock or, if applicable, phantom shares
of such stock by whatever term it is described allocated to the
Executive's accounts under all qualified and non-qualified employee
stock ownership plans maintained by the Association or
any
of its affiliates or subsidiaries during or for
the last complete plan year in which the Executive participated in
such plans and received such an allocation whether the allocation
occurred as a result of contributions made by the Association, the
payment by the Association or any of its affiliates or subsidiaries
of any loan payments under a leveraged employee stock ownership
plan, the allocation of forfeitures under the terms of such plan or
as a result of the use of cash or earnings allocated to the
Executives account during such plan year to make loan payments that
result in share allocations, provided however, that excluded shall
be any shares or phantom shares allocated to the Executive's
account under any qualified and non-qualified employee stock
ownership plans maintained by the Association or any of its
affiliates or subsidiaries solely as a result of the termination of
such plans, provided further, that if the shares allocated are not
shares of the Association's common stock or phantom shares of such
stock than shares of whatever securities are so allocated shall be
utilized, and provided further, that in the event that there shall
be any shares or phantom shares allocated during the then current
plan year or the last complete plan year to the Executive's account
under any qualified and non-qualified employee stock ownership
plans maintained by the Association or any of its affiliates or
subsidiaries solely as a result of the termination of such plans,
the ALL shall be reduced (but not to an amount less than zero (0))
by an amount calculated by multiplying the number of shares or
phantom shares allocated to the Executive's account solely as a
result of the termination of such plans times the FMV utilized to
calculate the ESOPSP;
"C" is the sum of all cash allocated to the
Executive's accounts under all qualified and non-qualified employee
stock ownership plans maintained by the Association during or for
the last complete plan year in which the Executive participated in
such plans whether the allocation occurred as a result of
contributions made by the Association, the payment by the Company
or the Association of any loan payments under a leveraged employee
stock ownership plan or the allocation of forfeitures under the
terms of such plan during such plan year;
"FMV" is the closing price of the Association's
common stock on The New York Stock Exchange (“NYSE”) or
on whatever other stock exchange or market such stock is publicly
traded on the date the Executive's employment terminates or, if
such day is not a day on which such securities are traded, on the
most recent preceding trading day on which a trade occurs, provided
however that if the security allocated to the Executive's account
during the last completed plan year is other than the Association's
common stock the closing price of such security on the date the
Executive's employment terminates shall be utilized.
"NY" is the Remaining Unexpired Employment
Period expressed as a number of years (rounded, if such period is
not a whole number, to the next highest whole number);
and
“UVB” is the actual balance credited
to the Executive's account under the applicable plan at the date of
his or her termination of employment that is not vested and does
not become vested as a consequence of such termination of
employment.
The Defined
Contribution Severance Payment shall be converted into the same
form, and paid at the same time, and in the same manner, as
benefits under the corresponding non-qualified plan. and, if there
is no such non-qualified plan in effect on the date of this
Agreement, in a lump sum.
(vii) thirty (30) days following the Executive's
termination of employment with the Association, the Association
shall make a lump sum payment to the Executive in an amount equal
to the estimated potential annual bonuses or incentive compensation
that the Executive could have earned if the Executive had continued
working for the Association during the 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 Association (the "Bonus
Severance Payment"). The Bonus Severance Payment shall be computed
using the following formula:
BSP = (BS x TIO
x AP x NY)
"BSP" is the amount of the Bonus Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes;
"BS" is 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
Association;
"TIO" is the highest target incentive
opportunity established by the Compensation Committee of the Board
for the Executive pursuant to the Astoria Financial Corporation
Executive Officer Annual Incentive Plan during that portion of the
Employment Period which is prior to the Executive's termination of
employment with the Association;
"AP" is the highest award percentage available
to the Executive with respect to the financial performance of the
Association (expressed as a percentage of the TIO) established by
the Compensation Committee of the Board for the Executive pursuant
to the Astoria Financial Corporation Executive Officer Annual
Incentive Plan during the period during that portion of the
Employment Period which is prior to the Executive's termination of
employment with the Association; and
"NY" is the Remaining Unexpired Employment
Period expressed as a number of years (rounded, if such period is
not a whole number, to the next highest whole number).
(viii) at the election of the Association made
within thirty (30) days following the Executive's termination
of employment with the Association, upon the surrender of options
or appreciation rights issued to the Executive under any stock
option and appreciation rights plan or program maintained by, or
covering employees of, the Association, a lump sum payment (the
"Option Surrender Payment"). The Option Surrender Payment shall be
calculated as follows:
"OSP" is the amount of the Option Surrender
Payment, before the deduction of applicable federal, state and
local withholding taxes;
"FMV" is the closing price of the Association's
common stock on the NYSE, or on whatever other stock exchange or
market such stock is publicly traded, on the dat
