Exhibit 10.4
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
THIS AGREEMENT
is made as of this 3rd day of
October, 2007, between GRAYSTONE FINANCIAL CORP., a
Pennsylvania business corporation (the “Corporation”),
and GRAYSTONE BANK (“Bank”), a Pennsylvania
chartered bank and JANAK AMIN, an adult individual
(“Executive”).
WITNESSETH
:
WHEREAS , the Bank and Executive have been parties to an
employment agreement dated November 14, 2005 relating to the
employment of the Executive by the Bank (the “Original
Agreement”); and
WHEREAS , the Corporation and the Bank desire to
continue to employ Executive to serve in the capacity of Executive
Vice President of the Corporation and the Bank on the terms and
conditions set forth herein; and
WHEREAS, the Corporation, the Bank and the Executive
desire to amend and restate the Original Agreement as set forth
herein.
AGREEMENT
NOW, THEREFORE
, the parties hereto, intending to
be legally bound, agree as follows:
1. Employment . The
Corporation and the Bank each hereby employs Executive and
Executive hereby accepts employment with Corporation and the Bank,
on the terms and conditions set forth in this Agreement.
2. Duties of Employee
. Executive shall serve as an Executive Vice President of the
Corporation and the Bank, reporting to the Chief Executive Officer
and shall have such responsibilities, powers and duties as may from
time to time be prescribed by the Chief Executive Officer and/or
the Board of Directors of the Corporation and the Bank, provided
such powers and duties are consistent with the Executive’s
position. Executive shall devote his full time, attention and
energies to the business of the Corporation and the Bank during the
Employment Period (as defined in Section 3 of this Agreement);
provided, however, that this Section 2 shall not be construed
as preventing Executive from (a) engaging in activities
incident or necessary to personal investments, (b) acting as a
member of the board of directors of any non-profit association or
corporation, or (c) being involved in any other activity with
the prior approval of the Chief Executive Officer. The Executive
shall not engage in any business or commercial activities, duties
or pursuits which compete with the business or commercial
activities of the Corporation or the Bank, nor may the Executive
serve as a director or officer or
in any other capacity in a company which
competes with the Corporation or the Bank.
3. Term of Agreement
.
(a) Employment Period . This
Agreement shall be for a two (2) year period (the
“Employment Period”) beginning on the date first
mentioned above, and if not previously terminated pursuant to the
terms of this Agreement, the Employment Period shall end two
(2) years later; provided however, that the Employment Period
shall be automatically renewed one year later on the first
anniversary date of the commencement of the Employment Period (the
“Renewal Date”) for a period ending two (2) years
from the Renewal Date unless either party shall give written notice
of non-renewal to the other party at least ninety (90) days
prior to the Renewal Date, in which event this Agreement shall
terminate at the end of the Employment Period. If this Agreement is
renewed on the Renewal Date, it will be automatically renewed on
the first anniversary date of the Renewal Date and each subsequent
year (the “Annual Renewal Date”) for a period ending
two (2) years from each Annual Renewal Date, unless either
party gives written notice of non-renewal to the other party at
least ninety (90) days prior to the Annual Renewal Date, in
which case this Agreement will continue in effect for a term ending
two (2) years from the Annual Renewal Date immediately
following such notice.
(b) Termination for Cause.
Notwithstanding the provisions of Section 3(a) of this
Agreement, this Agreement may be terminated by the Corporation or
the Bank for Cause (as defined herein) upon written notice from the
Board of Directors of the Corporation to Executive. As used in this
Agreement, “Cause” shall mean any of the
following:
(i) Executive’s conviction of
or plea of guilty or nolo contendere to a felony, a crime of
falsehood or a crime involving moral turpitude, or the actual
incarceration of Executive for a period of thirty
(30) consecutive days or more;
(ii) Executive’s willful
continuing failure to follow the lawful instructions of the Chief
Executive Officer or the Board of Directors of the Corporation or
the Bank (which instructions must be consistent with the terms of
this Agreement), after the Executive’s receipt of written
notice of such instructions, other than a failure resulting form
Executive’s incapacity because of physical or mental
illness;
(iii) A government regulatory agency
recommends or orders in writing that the Corporation or the Bank
terminate the employment of the Executive with the Corporation or
the Bank or relieve him of his duties as such relate to the
Corporation or the Bank; or
(iv) Executive’s violation of
the covenant not to compete contained in Section 8 or the
confidentiality provisions of Section 9.
If this Agreement is terminated for
Cause, all of Executive’s rights under this Agreement shall
cease as of the effective date of such termination, except
that:
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(i) the Bank shall pay to Executive
the unpaid portion, if any, of his Annual Base Salary through the
date of termination; and
(ii) the Bank shall provide to
Employee such post-employment benefits, if any, as may be provided
for under the terms of the employee benefit plans of the Bank then
in effect.
(c) Termination for Good
Reason. Notwithstanding the provisions of Section 3(a) of
this Agreement, this Agreement shall terminate automatically upon
Executive’s termination of employment for Good Reason. The
term “Good Reason” shall mean (i) a reduction in
salary or material reduction in benefits, including any incentive
compensation plan, except in cases of a national financial
depression or emergency when such reduction has been implemented
generally by the Board of Directors for the Corporation’s
senior management, (ii) a reassignment which assigns full-time
employment duties to Executive at a location more than fifty
(50) miles from the Corporation’s principal executive
office and from the office at which the Executive spends the
majority of his time, in either case on the date of this Agreement,
(iii) any other material breach or default by the Corporation
or the Bank under any term or provision of this Agreement,
including any reduction, in any material respect and without
Executive’s consent, of the authority, duties or other terms
and conditions of Executive’s employment hereunder, or
(iv) any delivery by the Corporation or the Bank to the
Executive of a written notice of non-renewal pursuant to
Section 3(a) above, in all cases after notice from the
Executive to the Corporation within ninety (90) days after the
initial existence of any such condition that the condition
constitutes Good Reason and the failure of the Corporation and the
Bank to cure such situation within thirty (30) days after said
notice. If such termination occurs for Good Reason, then Bank shall
pay Executive such benefits as are set forth in Section 7 of
this Agreement.
(d) Death. Notwithstanding
the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically upon Executive’s
death and Executive’s rights under this Agreement shall cease
as of the date of such termination, except that (i) the Bank
shall pay to Executive’s spouse, personal representative, or
estate the unpaid portion, if any, of his Annual Base Salary
through date of death and the balance of the payments (if any)
owing pursuant to Section 15(b) below, and (ii) the Bank
shall provide to Executive’s dependents any benefits due
under the Bank’s employee benefit plans.
(e) Disability. Executive,
the Corporation and the Bank agree that if Executive becomes
eligible for employer-provided short-term and/or long-term
disability benefits, or worker’s compensation benefits, then
the Bank’s obligation to pay Executive his base salary shall
be reduced by the amount of the disability or worker’s
compensation benefits received by Executive.
Executive, the Corporation and the
Bank agree that if, in the judgment of the Corporation’s
Board of Directors, the Executive is unable, as a result of illness
or injury, to perform the essential functions of his position on a
full-time basis with or without a reasonable accommodation and
without posing a direct threat to himself or others for
a
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period of six months, the
Corporation and the Bank will suffer an undue hardship in
continuing the Executive’s employment as set forth in this
agreement. Accordingly, this Agreement shall terminate at the end
of the six-month period, and all of Executive’s rights under
this Agreement shall cease, with the exception of those rights
which Executive may have under the Bank’s benefit
plans.
4. Employment Period
Compensation, Benefits and Expenses .
(a) Annual Base Salary . For
services performed by Executive under this Agreement, Bank shall
pay Executive an Annual Base Salary during the Employment Period at
the rate of One Hundred Forty Thousand dollars ($140,000) per year,
minus applicable withholdings and deductions, payable at the same
times as salaries are payable to other executive employees of the
Bank. The Annual Base Salary shall be reviewed annually by the
Board of Directors and the Board may, from time to time, increase
Executive’s Annual Base Salary, and any and all such
increases shall be deemed to constitute amendments to this
Section 4(a) to reflect the increased amounts, effective as of
the date established for such increases by the Board. In reviewing
adjustments to Annual Base Salary, the Board of Directors shall
consider relevant market data regarding executive salaries at peer
financial institutions and the performance of the Corporation and
the Bank under the Executive’s leadership.
(b) Bonus . The Board of
Directors of the Corporation and the Bank may provide for the
payment of an annual bonus to the Executive as it deems appropriate
to provide incentive to the Executive and to reward the Executive
for his performance. Such bonus may, but need not be, determined in
accordance with any incentive bonus programs for executive officers
as approved by the Board of Directors. The payment of any such
bonuses will not reduce or otherwise affect any other obligation of
the Bank to the Executive provided for in this
Agreement.
(c) Vacations, Holidays, etc.
During the term of this Agreement, Executive shall be entitled to
be paid annual vacation in accordance with the policies as
established from time to time by the Board of Directors of the
Bank. However, Executive shall not be entitled to receive any
additional compensation from Bank for failure to take a vacation,
nor shall Executive be able to accumulate unused vacation time from
one year to the next, except to the extent authorized by the Board
of Directors of Bank. The Executive shall also be entitled to all
paid holidays, sick days and personal days provided by the Bank to
its regular full-time employees and senior executive
officers.
(d) Automobile . During the
term of this Agreement, the Bank shall provide the Executive with
exclusive use of an automobile mutually agreed upon by Executive
and Bank. This automobile shall be a mid-size car or comparable
sports utility vehicle. The Bank shall be responsible and shall pay
for all costs associated with the operation and maintenance of such
automobile, including, without limitation, insurance coverage,
repairs, maintenance and other operating and incidental expenses,
including registration, fuel and oil.
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(e) Country Club Membership
Fees . The Bank shall pay for Executive’s membership
dues, capital fund assessments and similar items necessary or
appropriate to maintain a membership at a country club within the
Bank’s market area as mutually agreed upon by Bank and
Executive.
(f) Stock Based Incentives .
During the term of this Agreement, Executive shall be entitled to
such stock based incentives as may be granted from time to time by
the Corporation’s Board of Directors under the
Corporation’s stock based incentive plans and as are
consistent with the Executive’s responsibilities and
performance.
(g) Employee Benefit Plans .
During the term of this Agreement, Executive shall be entitled to
participate in or receive the benefits of any employee benefit plan
currently in effect at the Bank, subject to the terms of said plan,
until such time that the Board of Directors authorizes a change in
such benefits.
(h) Business Expenses .
During the term of this Agreement, Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by him, which are properly accounted for, in accordance with the
policies and procedures established by the Board of Directors of
the Corporation or the Bank for its executive officers.
5. Termination of Employment
Following Change in Control .
(a) If a Change in Control (as
defined in Section 5(b) of this Agreement) shall occur at any
time during the term of this Agreement, Executive may terminate his
employment for any reason or no reason by delivering a notice in
writing (the “Notice of Termination”) to the
Corporation within thirty (30) days of the Change in Control
which termination shall be effective immediately upon delivery of
such Notice of Termination.
(b) As used in this Agreement,
“Change in Control” shall mean the occurrence
immediately of any of the following:
(A) the consummation of (i) a
merger, consolidation, division or other fundamental transaction
involving the Corporation or the Bank, (ii) a sale, exchange,
transfer or other disposition of substantially all of the assets of
the Corporation or the Bank to any entity which is not a direct or
indirect subsidiary of the Corporation, or (iii) a purchase by
the Corporation or the Bank of substantially all of the assets of
another entity; unless (y) such merger, consolidation,
division, sale, exchange, transfer, purchase, disposition or other
transaction is approved in advance by eighty percent (80%) or
more of the members of the Board of Directors of the Corporation
who are not interested in the transaction and (z) a majority
of the members of the Board of Directors of the legal entity
resulting from or existing after any such transaction and a
majority of the Board of Directors of such entity’s parent
corporation, if any, are former members of the Board of Directors
of the Corporation; or
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(B) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”)), other than
the Corporation, a direct or indirect subsidiary of the
Corporation, or a person who is the beneficial owner of more than
twenty-five percent (25%) of the Corporation’s
outstanding securities on the date of this Agreement becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing twenty-five percent (25%) or more of
the combined voting power of Corporation’s then outstanding
securities; or
(C) during any period of two
(2) consecutive years during the term of Executive’s
employment under this Agreement, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority thereof,
unless the election of each director who was not a director at the
beginning of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office
who were directors at the beginning of the period; or
(D) any other change in control of
the Corporation or the Bank similar in effect to any of the
foregoing.
6. Rights in Event of Change
in Control .
(a) In the event that Executive
delivers a Notice of Termination (as defined in Section 5(a)
of this Agreement) to the Corporation, Executive shall be entitled
to receive the compensation and benefits set forth
below:
(i) Executive shall be paid, within
twenty (20) days following termination, a lump sum cash
payment equal to two times the sum of (1) the highest Annual
Base Salary as defined in Section 4(a) during the immediately
preceding three calendar years, (2) the highest cash bonus and
other cash incentive compensation earned by him with respect to one
of the three calendar years immediately preceding the year of
termination and (3) the highest value of stock options and
other stock based incentives awarded to the Executive with respect
to one of the three calendar years immediately preceding the year
of termination, which value shall be based upon the grant-date fair
value of the award determined in accordance with SFAS 123(R)
(“Share-Based Payments”). The amount shall be subject
to federal, state, and local tax withholdings. Notwithstanding the
foregoing, the value of restricted stock awarded to Executive under
the Bank’s 2006 Restricted Stock Plan shall not be included
under §6(a)(i)(3) above for purposes of calculating the
compensation payable to Executive.
(ii) In addition, for a period of
twenty-four (24) months from the date of termination of
employment, Executive shall be permitted to continue
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participation in and the Bank shall
maintain the same level of contribution for Executive’s
participation in the Bank’s life, disability, medical/health
insurance and other health and welfare benefits in effect with
respect to Executive during the one (1) year prior to his
termination of employment, or, if Bank is not permitted by the
insurance carriers to provide such benefits because Executive is no
longer an employee, a dollar amount equal to the cost to Executive
of obtaining such benefits (or substantially similar
benefits).
(b) Executive shall not be required
to mitigate the amount of any payment provided for in this
Section 6 by seeking other employment or otherwise, nor shall
the amount of payment or the benefit provided for in this
Section 6 be reduced by any compensation earned by Executive
as the result of employment by another employer or by reason of
Executive’s receipt of or right to receive any retirement or
other benefits after the date of termination of employment or
otherwise.
(c) Should the total of all amounts
or benefits payable hereunder, together with any other payments
which Executive has a right to receive from the Corporation, the
Bank, any affiliates or subsidiaries of the Corporation or the
Bank, or any successors of any of the foregoing, result in the
imposition of an excise tax under Internal Revenue Code
Section 4999 (or any successor thereto), Executive shall be
entitled to an additional “excise tax” adjustment
payment in an amount such that, after the payment of all federal
and state income and excise taxes, Executive will be in the same
after-tax position as if no excise tax had been imposed. Any
payment or benefit which is required to be included under Internal
Revenue Code Sections 280G or 4999 (or any successor provisions
thereto) for purposes of determining whether an excise tax is
payable shall be deemed a payment “made to Executive”
or a payment “which Executive has a right to receive”
for purposes of this provision. The Corporation or the Bank (or its
successor) shall be responsible for the costs of calculation of the
deductibility of payments and benefits and the excise tax by the
Corporation’s independent certified accountant and tax
counsel and shall notify Executive of the amount of excise tax
prior to the time such excise tax is due. If at any time it is
determined that the additional “excise tax” adjustment
payment previously made to Executive was insufficient to cover the
effect of the excise tax, the gross-up payment pursuant to this
provision shall be increased to make Executive whole, including an
amount to cover the payment of any penalties resulting from any
incorrect or late payment of the excise tax resulting from the
prior calculation. All such amounts required to be paid hereunder
shall be paid at the time any withholdings may be required (or, if
earlier, the time Executive shall be required to pay such amounts)
under applicable law, and any additional amounts to which Executive
may be entitled shall be paid or reimbursed no later than fifteen
(15) days following confirmation of such amount by the
Corporation’s independent accountants; provided however, that
any payments to be made under this Section 6(c) shall in all
events be made no later than the end of the Executive’s
taxable year next following the taxable year in which the Executive
remits such excise tax payments. In the event any amounts paid
hereunder are subsequently determined to be in error because
estimates were required or otherwise, the parties agree to
reimburse each other to correct such error, as appropriate, and to
pay interest thereon at the applicable federal rate (as
determined
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under Internal Revenue Code
Section 1274 for the period of time such erroneous amount
remained outstanding and unreimbursed). The parties recognize that
the actual implementation of the provisions of this subsection are
complex and agree to deal with each other in good faith to resolve
any questions or disagreements arising hereunder.
7. Rights in Event of
Termination of Employment Absent Change in Control
.
(a) If Executive’s employment
is involuntarily terminated by the Corporation or the Bank without
Cause or is terminated by Executive for Good Reason pursuant to
Section 3(c), then Bank shall pay (or cause to be paid) to
Executive, within twenty (20) days following termination, a
lump sum cash payment equal to two times the sum of (1) the
highest Annual Base Salary as defined in Section 4(a) during
the immediately preceding three calendar years, (2) the
highest cash bonus and other cash ince
