Exhibit 10.5 Amended and
Restated Employment Agreement between Flushing Financial
Corporation and Maria A. Grasso
FLUSHING FINANCIAL CORPORATION
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) entered
into as of December 5, 2008, by and between Flushing Financial
Corporation, a Delaware corporation having its executive offices at
1979 Marcus Avenue, Suite E140, Lake Success, New York 11042 (the
“Holding Company”), and Maria A. Grasso, residing at
(address) (“Officer”).
W I T N E S
S E T H :
WHEREAS,
the Holding Company and the Officer are parties to an Employment
Agreement dated as of May 1, 2006 (the “Original Employment
Agreement”); and
WHEREAS,
the Holding Company considers the availability of the
Officer’s services to be important to the successful
management and conduct of the Holding Company’s business and
desires to secure for itself the availability of her services;
and
WHEREAS,
for purposes of securing for the Holding Company the
Officer’s continued services, the Board of Directors of the
Holding Company (“Board”) has authorized the proper
officers of the Holding Company to enter into an employment
agreement with the Officer on the terms and conditions set forth
herein; and
WHEREAS,
the Officer is willing to make her services available to the
Holding Company on the terms and conditions set forth
herein;
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants and obligations hereinafter set forth, the Holding
Company and the Officer hereby agree as follows:
Section
1.
Employment .
The
Holding Company hereby agrees to employ the Officer, and the
Officer hereby agrees to accept such employment, during the period
and upon the terms and conditions set forth in this
Agreement.
Section
2.
Employment Period .
(a)
Except as otherwise provided in this Agreement to the contrary, the
terms and conditions of this Agreement shall be and remain in
effect during the period of employment (“Employment
Period”) established under this section 2. The Employment
Period under this Amended and Restated Employment Agreement shall
be for a term commencing on the date
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hereof and ending on November 21,
2010, plus such extensions as are provided pursuant to section 2(b)
of this Agreement.
(b) On
or as of July 1, 2009, and on or as of each July 1 thereafter, the
Employment Period shall be extended for one additional year if and
only if the Board shall have authorized the extension of the
Employment Period prior to July 1 of such year and the Officer
shall not have notified the Holding Company prior to July 1 of such
year that the Employment Period shall not be so extended. If the
Board shall not have authorized the extension of the Employment
Period prior to July 1 of any such year, or if the Officer shall
have given notice of nonextension to the Holding Company prior to
July 1 of such year, then the Employment Period shall not be
extended pursuant to this section 2(b) at any time thereafter and
shall end on the last day of its term as then in effect.
(c) Upon
the termination of the Officer’s employment with the Holding
Company, the extensions provided pursuant to section 2(b) shall
cease (if such extensions have not previously ceased).
(d) Notwithstanding
anything herein to the contrary, the Employment Period shall end
and the Officer’s employment with the Holding Company shall
terminate on the date on which the Officer’s employment with
Flushing Savings Bank, FSB terminates.
Section
3. Title and
Duties .
On
the date on which the Employment Period commences, the Officer
shall hold the position of Executive Vice President/Chief Operating
Officer of the Holding Company with all of the powers and duties
incident to such position under law and under the by-laws of the
Holding Company. During the Employment Period, the Officer shall:
(a) devote her full business time and attention (other than during
weekends, holidays, vacation periods and periods of illness or
approved leaves of absence) to the business and affairs of the
Holding Company and its subsidiaries and use her best efforts to
advance the interests of the Holding Company and its subsidiaries,
including reasonable periods of service as an officer and/or board
member of trade associations, their related entities and charitable
organizations; and (b) perform such reasonable additional duties,
as may be assigned to her by or under the authority of the Board.
The Officer shall also serve as an officer of Flushing Savings
Bank, FSB (the “Bank”) pursuant to the Amended and
Restated Employment Agreement between the Officer and the Bank
dated as of the date hereof (“Bank Employment
Agreement”). The Holding Company hereby acknowledges that the
Officer’s service under this Agreement shall not be deemed to
materially interfere with the Officer’s performance under the
Bank Employment Agreement or otherwise result in a breach of the
Bank Employment Agreement. The Officer shall have such authority as
is necessary or appropriate to carry out her duties under this
Agreement.
Section
4.
Compensation .
In
consideration for services rendered by the Officer under this
Agreement:
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(a) The
Holding Company shall pay to the Officer a salary at an annual rate
equal to the greater of (i) $305,000 or (ii) such higher annual
rate as may be prescribed by or under the authority of the Board
(the “Current Salary”). The Officer will undergo an
annual salary and performance review on or about June 30 of each
year commencing in 2009. The Current Salary payable under this
section 4 shall be paid in approximately equal installments in
accordance with the Holding Company’s customary payroll
practices.
(b) The
Officer shall be eligible to participate in any bonus plan
maintained by the Holding Company for its officers and employees.
If the Officer shall earn any bonus under any bonus plan of the
Bank but such bonus shall not be paid by the Bank, the Holding
Company shall pay such bonus to the Officer.
Section
5. Employee
Benefits and Other Compensation .
(a) Except
as otherwise provided in this Agreement, the Officer shall, during
the Employment Period, be treated as an employee of the Holding
Company and be entitled to participate in and receive benefits
under the Holding Company’s employee benefit plans and
programs, as well as such other compensation plans or programs
(whether or not employee benefit plans or programs), as the Holding
Company may maintain from time to time, in accordance with the
terms and conditions of such employee benefit plans and programs
and compensation plans and programs and with the Holding
Company’s customary practices.
(b) The
Holding Company shall provide the Officer with a suitable
automobile for use in the performance of the Officer’s duties
hereunder and shall reimburse the Officer for all expenses incurred
in connection therewith in accordance with Holding Company policies
(but in no event later than the last day of the calendar year next
following the calendar year in which the expenses were
incurred).
(c) The
Officer shall be entitled, without loss of pay, to vacation time in
accordance with the policies periodically established by the Board
for senior management officials of the Holding Company, which shall
in no event be less than four weeks in each calendar year. Except
as provided in section 7(b), the Officer shall not be entitled to
receive any additional compensation from the Holding Company on
account of her failure to take a vacation, nor shall she be
entitled to accumulate unused vacation from one calendar year to
the next except to the extent authorized by the Board for senior
management officials of the Holding Company.
Section
6. Working
Facilities and Expenses .
The
Officer’s principal place of employment shall be at the
offices of the Holding Company in Nassau County or Queens County,
New York or at such other location upon which the Holding Company
and the Officer may mutually agree. The Holding Company shall
provide the Officer, at her principal place of employment, with a
private office, stenographic services and other support services
and facilities consistent with her position with the Holding
Company and necessary or appropriate in connection with the
performance of her duties under this Agreement. The Holding Company
shall reimburse the Officer for her ordinary and necessary business
expenses, including, without limitation, travel and entertainment
expenses, incurred in connection
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with the performance of her
duties under this Agreement, upon presentation to the Holding
Company of an itemized account of such expenses in such form as the
Holding Company may reasonably require. Such reimbursements shall
be made in accordance with Holding Company policies (but in no
event later than the last day of the calendar year next following
the calendar year in which the expenses were incurred).
Section
7. Termination with
Holding Company Liability .
(a) In
the event that the Officer’s employment with the Bank and/or
the Holding Company shall terminate during the Employment Period on
account of:
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(i) the Officer’s
voluntary resignation from employment with the Bank and the Holding
Company within one year following an event that constitutes
“Good Reason,” which is defined as:
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(A) the
failure of the Bank to elect or to reelect the Officer to serve as
its Executive Vice President/Chief Operating Officer, or such other
position as the Officer consents to hold, or the failure of the
Holding Company to elect or reelect the Officer to serve as its
Executive Vice President/Chief Operating Officer, or such other
position as the Officer consents to hold;
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(B) the
failure of the Bank or the Holding Company to cure a material
adverse change made by it in the Officer’s functions, duties,
or responsibilities in her position with the Bank or the Holding
Company, respectively, within sixty days following written notice
thereof from the Officer;
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(C) the
failure of the Bank or the Holding Company to maintain the
Officer’s principal place of employment at its offices in
Nassau County or Queens County, New York or at such other location
upon which the Bank or the Holding Company and the Officer may
mutually agree;
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(D) the
failure of the Board to extend the Employment Period within the
times provided in section 2(b) or the failure of the Bank’s
board of directors to extend the Employment Period under the Bank
Employment Agreement within the times provided in section 2(b) of
such Agreement; provided, however, that such failure shall not
constitute Good Reason until the earlier of 30 days after any
determination by the Board or the Bank’s board of directors
that the Employment Period shall not be so extended or August 1 of
such year;
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(E) the
failure of the Bank or the Holding Company to cure a material
breach of the Bank Employment Agreement or this Agreement by the
Bank or the Holding Company, respectively, within sixty days
following written notice thereof from the Officer; or
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(F) after
a Change of Control (as defined in section 10), the failure of any
successor company to the Bank to assume the Bank
Employment
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Agreement or of any successor
company to the Holding Company to assume this Agreement.
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(ii) the
discharge of the Officer by the Bank or the Holding Company for any
reason other than (A) for “Cause” as defined in section
8(b) of this Agreement or (B) the Officer’s death or
“Disability” as defined in section 9(a) of this
Agreement; or
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(iii) the
Officer’s voluntary resignation from employment with the Bank
and the Holding Company for any reason within the sixty-day period
commencing six months following a Change of Control as defined in
section 10;
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then the Holding Company shall
provide the benefits and pay to the Officer as liquidated damages
the amounts provided for under section 7(b).
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(b) Upon
the termination of the Officer’s employment with the Bank
and/or the Holding Company under circumstances described in section
7(a), the Holding Company shall pay and provide to the
Officer:
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(i) her
earned but unpaid Current Salary as of the date of termination,
plus an amount representing any accrued but unpaid vacation time
and floating holidays, which amounts shall be paid within thirty
days of termination; and her earned but unpaid bonus for the year
prior to the year of termination, which shall be paid at the same
time as bonuses for such year are paid to active
employees;
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(ii) (A)
if the Officer’s termination of employment occurs after a
Change of Control, a pro rata portion of her bonus for the year of
termination, determined by multiplying the amount of the bonus
earned by the Officer for the preceding calendar year by the number
of full months of employment during the year of termination, and
dividing by 12, which amount shall be paid within thirty days of
termination; or (B) if the Officer’s termination of
employment occurs prior to a Change of Control, a pro rata portion
of her bonus for the year of termination, determined by multiplying
the amount of the bonus which would have been earned by the Officer
for the year of termination if she had remained in employment
through the end of the year (but only to the extent of achievement
of the applicable performance standards for such year) by the
number of full months of employment during the year of termination,
and dividing by 12, which amount shall be paid at the same time as
bonuses for such year are paid to active employees;
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(iii) the
benefits, if any, to which she is entitled as a former employee
under the Bank’s and the Holding Company’s employee
benefit plans and programs and compensation plans and programs,
which shall be paid in accordance with the terms of such plans and
programs;
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(iv) continued
health and welfare benefits (including group life, disability,
medical and dental benefits), in addition to that provided pursuant
to section 7(b)(iii), to the extent necessary to provide
coverage for the Officer for the Severance Period (as defined in
section 7(c)). Such benefits shall be provided through
the
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purchase of insurance, and shall
be equivalent to the health and welfare benefits (including
cost-sharing percentages) provided to active employees of the Bank
and the Holding Company (or any successor thereof) as from time to
time in effect during the Severance Period. Where the amount of
such benefits is based on salary, they shall be provided to the
Officer based on the highest annual rate of Current Salary achieved
by the Officer during the Employment Period. If the Officer had
dependent coverage in effect at the time of her termination of
employment, she shall have the right to elect to continue such
dependent coverage for the Severance Period. The benefits to be
provided under this paragraph (iv) shall cease to the extent that
substantially equivalent benefits are provided to the Officer
(and/or her dependents) by a subsequent employer of the
Officer;
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(v) if
the Officer is age 55 or older at the end of the Severance Period,
she shall be entitled to elect coverage for herself and her
dependents under the Bank’s and the Holding Company’s
retiree medical and retiree life insurance programs. Such coverage,
if elected, shall commence upon the expiration of the Severance
Period, without regard to whether the Officer commences her pension
benefit at such time, and shall continue for the life of each of
the Officer and her spouse and for so long as any other of her
covered dependents remain eligible. The coverage and cost-sharing
percentage of the Officer and her dependents under such programs
shall be those in effect under such programs on the date of the
Officer’s termination of employment with the Bank or the
Holding Company, and shall not be adversely modified without the
Officer’s written consent; and
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(vi) within
thirty days following her termination of employment with the Bank
or the Holding Company, a cash lu
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