Exhibit 10.3
EMPLOYMENT
AGREEMENT
THIS AGREEMENT
originally entered into on the 14 th day of September, 2000, and
amended on February 13, 2003, and as amended further on
February 15, 2007, by and between Mayflower Co-operative Bank
(the “Bank”) and Stergios M. Kostas (the
“Employee”), is amended and restated in its entirety as
of December 31, 2008.
WHEREAS, the Employee has heretofore
been employed by the Bank as Vice President and has considerable
experience in the business of the Bank; and
WHEREAS, the parties desire by this
writing to set forth the continuing employment relationship of the
Bank and the Employee; and
WHEREAS, Mayflower Bancorp, Inc.,
the holding company of the Bank (the “Company”), will
serve as guarantor under this Agreement, as the same my be amended
by the Bank from time to time or extended pursuant to
Section 5; and
WHEREAS, the parties desire to amend
and restate this Agreement to bring it into compliance with
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”).
NOW, THEREFORE, it is AGREED as
follows:
1. Employment . The Employee
is employed as the Vice President of the Bank. The Employee shall
render such administrative and management services for the Bank as
are currently rendered and as are customarily performed by persons
situated in a similar executive capacity. The Employee shall also
promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Bank. The Employee’s
other duties shall be such as the Board of Directors of the Bank
(“Board”) may from time to time reasonably direct,
including normal duties as an officer of the Bank.
2. Base Compensation . The
Bank agrees to pay the Employee during the term of this Agreement a
salary at the rate of $111,000 (as of September 11, 2008) per
annum, payable in cash not less frequently than monthly. The Board
shall review, not less often than annually, the rate of the
Employee’s salary, and in its sole discretion may decide to
increase his salary.
3. Discretionary Bonuses .
The Employee shall participate in an equitable manner with all
other senior management employees of the Bank in discretionary
bonuses that the Board may award from time to time to the
Bank’s senior management employees. No other compensation
provided for in this Agreement shall be deemed a substitute for the
Employee’s right to participate in such discretionary
bonuses.
4. (a) Participation in
Retirement, Medical and Other Plans . The Employee shall
participate in any plan that the Bank maintains for the benefit of
its employees if the plan relates to (i) pension,
profit-sharing, or other retirement benefits, (ii) medical
insurance or the reimbursement of medical or dependent care
expenses, or (iii) other group benefits, including disability
and life insurance plans.
(b) Employee Benefits;
Expenses . The Employee shall participate in any fringe
benefits which are or may become available to the Bank’s
senior management employees, including for example: any stock
option or incentive compensation plans, club memberships, and any
other benefits which are commensurate with the responsibilities and
functions to be performed by the Employee under this Agreement. The
Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which he shall incur in connection with his
services under this Agreement upon substantiation of such expenses
in accordance with the policies of the Bank.
5. Term . The Bank hereby
employs the Employee, and the Employee hereby accepts such
employment under this Agreement, for the period commencing on
September 14, 2000 and ending twelve (12) months
thereafter on September 14, 2001 (or such earlier date as is
determined in accordance with Section 9); provided that
notwithstanding any determination by the Bank not to extend the
term of this Agreement, said term shall not expire prior to the
expiration of twelve (12) months after a Change in Control (as
defined in Section 11) shall have occurred. Additionally, on
each annual anniversary date from the Effective Date, the
Employee’s term of employment shall be extended for an
additional one-year period beyond the then effective expiration
date provided the Board determines in a duly adopted resolution
that the performance of the Employee has met the Board’s
requirements and standards, and that this Agreement shall be
extended.
6. Loyalty; Noncompetition
.
(a) During the period of his
employment hereunder and except for illnesses, reasonable vacation
periods, and reasonable leaves of absence, the Employee shall
devote all his full business time, attention, skill, and efforts to
the faithful performance of his duties hereunder; provided,
however, from time to time, Employee may serve on the boards of
directors of, and hold any other offices or positions in, companies
or organizations, which will not present any conflict of interest
with the Bank or any of its subsidiaries or affiliates, or
unfavorably affect the performance of Employee’s duties
pursuant to this Agreement, or will not violate any applicable
statute or regulation. “Full business time” is hereby
defined as that amount of time usually devoted to like companies by
similarly situated executive officers. During the term of his
employment under this Agreement, the Employee shall not engage in
any business or activity contrary to the business affairs or
interests of the Bank, or be gainfully employed in any other
position or job other than as provided above.
(b) Nothing contained in this
Section 6 shall be deemed to prevent or limit the
Employee’s right to invest in the capital stock or other
securities of any business dissimilar from that of the Bank, or,
solely as a passive or minority investor, in any
business.
7. Standards . The Employee
shall perform his duties under this Agreement in accordance with
such reasonable standards as the Board may establish from time to
time. The Bank will provide Employee with the working facilities
and staff customary for similar executives and necessary for him to
perform his duties.
8. Vacation and Sick Leave .
At such reasonable times as the Board shall in its discretion
permit, the Employee shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment
under this Agreement, all such voluntary absences to count as
vacation time; provided that:
(a) The Employee shall be entitled
to an annual vacation in accordance with the policies that the
Board periodically establishes for senior management employees of
the Bank.
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(b) The Employee shall not receive
any additional compensation from the Bank on account of his failure
to take a vacation or sick leave, and the Employee shall not
accumulate unused vacation or sick leave from one fiscal year to
the next, except in either case to the extent authorized by the
Board.
(c) In addition to the aforesaid
paid vacations, the Employee shall be entitled without loss of pay,
to absent himself voluntarily from the performance of his
employment with the Bank for such additional periods of time and
for such valid and legitimate reasons as the Board may in its
discretion determine. Further, the Board may grant to the Employee
a leave or leaves of absence, with or without pay, at such time or
times and upon such terms and conditions as such Board in its
discretion may determine.
(d) In addition, the Employee shall
be entitled to an annual sick leave benefit as established by the
Board.
9. Termination and Termination
Pay . Subject to Section 11 hereof, the Employee’s
employment hereunder may be terminated under the following
circumstances:
(a) Death . The
Employee’s employment under this Agreement shall terminate
upon his death during the term of this Agreement, in which event
the Employee’s estate shall be entitled to receive the
compensation due the Employee through the last day of the calendar
month in which his death occurred.
(b) Disability . The Bank may
terminate the Employee’s employment after having established
the Employee’s Disability. For purposes of this Agreement,
“Disability” means a physical or mental infirmity which
impairs the Employee’s ability to substantially perform his
duties under this Agreement and which results in the Employee
becoming eligible for long-term disability benefits under the
Bank’s long-term disability plan (or, if the Bank has no such
plan in effect, which impairs the Employee’s ability to
substantially perform his duties under this Agreement for a period
of one hundred eighty (180) consecutive days). The Employee
shall be entitled to the compensation and benefits provided for
under this Agreement for (i) any period during the term of
this Agreement and prior to the establishment of the
Employee’s Disability during which the Employee is unable to
work due to the physical or mental infirmity, or (ii) any
period of Disability which is prior to the the Employee’s
termination of employment pursuant to this
Section 9(b).
(c) Just Cause . The Board
may, by written notice to the Employee, immediately terminate his
employment at any time, for Just Cause. The Employee shall have no
right to receive compensation or other benefits for any period
after termination for Just Cause. Termination for “Just
Cause” shall mean termination because of, in the good faith
determination of the Board, the Employee’s personal
dishonesty, incompetence, willful misconduct, breach of
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fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of
any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. No act, or failure to
act, on the Employee’s part shall be considered
“willful” unless he has acted, or failed to act, with
an absence of good faith and without a reasonable belief that his
action or failure to act was in the best interest of the Bank.
Notwithstanding the foregoing, (i) the Employee shall not be
deemed to have been terminated for Just Cause unless there shall
have been delivered to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the
entire membership of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to the Employee and
an opportunity for the Employee to be heard before the Board),
finding that in the good faith opinion of the Board the Employee
was guilty of conduct set forth above in the third sentence of this
Subsection (c) and specifying the particulars thereof in
detail.
(d) Without Just Cause .
Subject to Section 11 hereof, the Board may, by written notice
to the Employee, immediately terminate his employment at any time
for a reason other than Just Cause, in which event the Employee
shall be entitled to receive the following compensation and
benefits: (i) the salary provided pursuant to Section 2
hereof, up to the date of termination of the term (including any
renewal term) of this Agreement (the “Expiration
Date”), plus said salary for an additional 12-month period,
but in no event in excess of 12 months salary and (ii) the
cost to the Employee of obtaining all health, life, disability and
other benefits which the Employee would have been eligible to
participate in through the Expiration Date based upon the benefit
levels substantially equal to those that the Bank provided for the
Employee at the date of termination of employment. Said sum shall
be paid in one lump sum within ten (10) days of such
termination.
(e) Termination or Suspension
Under Federal Law . (1) If the Employee is removed and/or
permanently prohibited from participating in the conduct of the
Bank’s affairs by an order issued under Sections 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act (“FDIA”)
(12 U.S.C. §1818(e)(4) and (g)(1)), all obligations of the
Bank under this Agreement shall terminate, as of the effective date
of the order, but vested rights of the parties shall not be
affected.
(2) If the Bank is in default (as
defined in Section 3(x)(l) of FDIA), all obligations under
this Agreement shall terminate as of the date of default; however,
this Paragraph shall not affect the vested rights of the
parties.
(3) All obligations under this
Agreement shall terminate, except to the ext
