Exhibit
10-29
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, George L. Engelke, Jr. ,
an individual residing at 83 Chelsea Road, Garden City, New York
11530, (the "Executive").
Whereas,
the Executive currently serves the Association
in the capacity of Chairman and Chief Executive Officer and as
Chairman and Chief Executive Officer 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.
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Employment Period; Remaining Unexpired
Employment Period .
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(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 Chairman and Chief Executive Officer 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.
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 ONE MILLION ONE HUNDRED THOUSAND DOLLARS
($1,100,000) , 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.
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Employee
Benefit Plans and Programs .
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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.
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Indemnification and Insurance
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(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.
(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.
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Working
Facilities and Expenses .
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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.
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Termination of Employment with Severance
Benefits .
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(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 Chairman and Chief Executive Officer
(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:
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"DBSP" is the amount of the DB Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes;
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"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:
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(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:
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payments made
pursuant to Section 9(b)(i);
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the Salary
Severance Payment;
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the Bonus
Severance Payment;
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the Option
Surrender Payment; and
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the RRP
Surrender Payment.
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"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:
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(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:
where:
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"DCSP" is the amount of the Defined Contribution
Severance Payment, before the deduction of applicable federal,
state and local withholding taxes;
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"401KSP" is the amount of the 401K Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes; and
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"ESOPSP" is the amount of the ESOP Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes.
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The 401KSP
shall be calculated as follows:
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401KSP = (401KC
x NY) +UVB
where:
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"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
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"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
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“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.
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The ESOPSP
shall be calculated as follows:
ESOPSP = (((ALL
x FMV) + C) x NY) + UVB
where:
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“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
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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;
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"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;
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"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.
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"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
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“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.
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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)
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"BSP" is the amount of the Bonus Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes;
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"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;
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"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;
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"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
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"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).
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(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:
where:
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"OSP" is the amount of the Option Surrender
Payment, before the deduction of applicable federal, state and
local withholding taxes;
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"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 date the
Executive's employment terminates or, if such day is not a day on
which such securities are traded, on the preceding trading day on
which a trade occurs, provided however that if the option or stock
appreciation right is for a security other than the Association's
common stock, th
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