Exhibit 10.3 Amended and
Restated Employment Agreement between Flushing Financial
Corporation and John R. Buran
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 John R. Buran, residing at
(address) (“Officer”).
WITNESSETH :
WHEREAS,
the Holding Company and the Officer are parties to an Employment
Agreement dated as of January 22, 2001, as amended and restated
effective as of July 1, 2005 (the “Original Employment
Agreement”); and
WHEREAS,
the Board has appointed the Officer to the position of President
and Chief Executive Officer of the Holding Company, effective July
1, 2005; 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 continued availability of his
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 amended and
restated employment agreement with the Officer on the terms and
conditions set forth herein; and
WHEREAS,
the Officer is willing to make his 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
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(“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 hereof and ending on November 21, 2011, 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 President and Chief Executive Officer of
the Holding Company and shall be a member of the Board with all of
the powers and duties incident to such positions under law and
under the by-laws of the Holding Company. During the Employment
Period, the Officer shall: (a) devote his 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 his 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
him by or under the authority of the Board. The Officer shall also
serve as an officer and director 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 his 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) $595,000 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 his failure to take a vacation, nor shall he 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.
(d) On
May 27 of each of the years 2006 through 2015, the Holding Company
shall credit to a bookkeeping account maintained by the Holding
Company (such Holding Company account and the account established
by the Bank under section 5(d) of the Bank Employment Agreement,
collectively, the “ SERP Account”) a supplemental
retirement benefit of $50,000. The supplemental retirement benefit
shall be deemed to be invested in one or more of such investment
funds as may be specified by the Holding Company with the consent
of the Officer (“Investment Funds”), as directed by the
Officer from time to time, and the Officer’s SERP Account
shall be credited at least quarterly with the earnings (or losses)
on such investments. Upon the Officer’s termination of
employment with the Holding Company and the Bank by reason of his
death, or upon his voluntary resignation without Good Reason, or
upon his termination for “Cause” (as defined in section
8(b) of this Agreement), the amount then credited
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to the Officer’s SERP
Account shall be paid by the Holding Company to the Officer (or in
the case of his death, to his designated beneficiaries or, in the
absence of any designation, to his estate) in a cash lump sum, and
thereafter no additional amounts shall be credited to the
Officer’s SERP Account. Upon the Officer’s termination
of employment with the Holding Company and the Bank by reason of
retirement (which shall mean termination of employment at a time
when the Officer is eligible to receive an Early, Normal, or
Postponed Retirement Benefit under the Bank’s Retirement
Plan), Disability (as defined in section 9(a)), voluntary
resignation within one year following an event that constitutes
Good Reason (as defined in section 7(a)(i)), or discharge without
“Cause”, or in the event of the Officer’s
termination of employment for any reason following a Change of
Control, the Holding Company shall promptly pay to the Officer a
cash lump sum equal to (i) $500,000, without regard to the amount
then credited to his SERP Account, or (ii) the amount then credited
to his SERP Account if such amount is greater than $500,000. Upon
such payment, no further amount shall be payable under this section
5(d). Subject to Section 25(a), any amount payable under this
Section 5(d) shall be paid promptly, but in any case within ninety
days, following the Officer’s termination of
employment.
(e) Subject
to the limitations imposed by Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), if and to the
extent that the Bank has not funded such benefits under the Bank
Employment Agreement, the Holding Company shall fund in a
“rabbi trust” on an ongoing and current basis the
supplemental retirement benefit provided under section 5(d) hereof.
The Trustee of such “rabbi trust” shall be an
independent bank or trust company.
(f) If
any amounts deferred pursuant to this Agreement are found in a
“determination” (within the meaning of Code Section
1313(a)) to have been includible in gross income by the Officer
prior to payment of such amounts under this Agreement due to a
failure to comply with the requirements of Code Section 409A, such
amounts shall be immediately paid to the Officer, notwithstanding
any other provision of this Agreement providing for
deferral.
Section
6. Working
Facilities and Expenses .
The
Officer’s principal place of employment shall be at the
executive offices of the Holding Company in Queens County or Nassau
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 his principal place of employment,
with a private office, stenographic services and other support
services and facilities consistent with his position with the
Holding Company and necessary or appropriate in connection with the
performance of his duties under this Agreement. The Holding Company
shall reimburse the Officer for his ordinary and necessary business
expenses, including, without limitation, travel and entertainment
expenses, incurred in connection with the performance of his 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).
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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 President and Chief Executive Officer and a member of its board
of directors, 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 President and Chief Executive Officer and a
member of its Board, 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 his 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 executive
offices in Queens County or Nassau 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, the failure of any successor company to the Bank
to assume the Bank Employment 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).
(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) his
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 his 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 his 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 his 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 he 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 he 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 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/or 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 his termination of employment, he shall have the right to elect
to continue such dependent coverage for the Severance Period. The
benefits to be provided under
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this paragraph (iv) shall cease
to the extent that substantially equivalent benefits are provided
to the Officer (and/or his dependents) by a subsequent employer of
the Officer;
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(v) if
the Officer is age 55 or older at the end
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