RETIREMENT, CONSULTING AND NONCOMPETITION AGREEMENT
THIS
RETIREMENT, CONSULTING AND NONCOMPETITION AGREEMENT (the
“Agreement”) is made this 3rd day of May 2008 (the
“Effective Date”) by and between Edward W. Gormley
(the “Executive”), and Abington Savings Bank, a
Pennsylvania chartered savings bank doing business as
“Abington Bank” (the “Bank” or the
“Employer”).
W I
T N E S S E T H :
WHEREAS,
the Executive currently serves as a Senior Vice President and
Secretary of the Employer;
WHEREAS, the Executive currently is a party
to an amended and restated employment agreement with the
Bank, dated as of November 28, 2007 (the “Employment
Agreement”), setting forth the terms and conditions of
his employment;
WHEREAS,
the Executive has expressed a desire to elect early retirement
effective as of September 30, 2008 (the “Retirement
Date”);
WHEREAS, the Bank desires to have the
Executive provide certain consulting services on a part-time
basis following the Retirement Date as set forth
below;
WHEREAS, the Executive is willing to
relinquish his rights under the Employment Agreement;
and
WHEREAS, the Employer and the Executive
desire to set forth their agreement with respect to the
Executive’s retirement from the Employer, the terms and
conditions under which the Executive will retire and receive
certain benefits, and the consulting services to be provided
by the Executive;
NOW,
THEREFORE, in consideration of the mutual premises and
covenants contained herein, and intending to be legally bound,
the parties agree as follows:
1.
Termination
of Employment and Employment Agreement; Transition
Period.
(a) Effective
as of the Retirement Date, the Executive shall no longer be
an officer or employee of the Employer and shall be deemed to
have resigned as an officer and employee of the Employer. The
Employment Agreement, by mutual agreement of the parties
hereto, shall be terminated and be of no further force and
effect as of the Effective Date, and the Executive shall be
entitled only to the rights and payments set forth herein in
lieu of any and all rights and payments under the Employment
Agreement.
(b) Between
the Effective Date and the Retirement Date (the
“Transition Period”), the Executive shall
continue in his current positions as a Senior Vice President
and Secretary of the Employer. During the
Transition Period, the Executive shall report to, and shall
coordinate his activities with, the President and Chief
Executive Officer of the Bank or his designee. It
is contemplated that the services to be provided by the
Executive during the Transition Period will include services
consistent with his current titles as well as assisting in
the training of a new chief lending officer and a new
secretary of the Bank.
2.
Payments
and Benefits to the Executive .
(a) During
the Transition Period, the Employer agrees to continue to pay
the Executive at an annualized rate equal to his current
annual base salary of $142,300 ($11,858.33 per month), paid in
accordance with the Employer’s normal procedures
applicable to employees. In addition, during the Transition
Period, the Executive will be entitled to continued medical,
dental, life, accident and disability insurance in his
capacity as an employee, with the Executive responsible for
paying the employee share of any premiums, co-payments or
deductibles. Notwithstanding anything to the
contrary herein, subsequent to the Retirement Date, other than
continued medical and dental
insurance, the Executive will not be entitled to participate
in or accrue or earn any benefits under any other benefit plan
or arrangement maintained by the Employers.
(b) During
the first 18 months following the Retirement Date, in
consideration of the Executive’s obligations and
agreements under Section 5, 6 and 7 of this Agreement, the
Employer agrees to pay a consulting and noncompetition fee of
$10,000 per month to the Executive on the last
business day of each month, commencing October 31, 2008 and
ending March 31, 2010. The Employer’s
obligation to make such payments shall cease if the Executive
breaches any provision of this Agreement, including but not
limited to Sections 5, 6 and 7 of this Agreement.
(c) During
the last 18 months of the Noncompetition Period (as defined
in Section 6 below), in consideration of the
Executive’s obligations and agreements under Sections 6
and 7 of this Agreement, the Employer agrees to pay a
noncompetition fee of $7,500 per month to the Executive on
the last business day of each month, commencing April 30,
2010 and ending October 31, 2011. The
Employer’s obligations to make such payments shall
cease if the Executive breaches any provision of this
Agreement, including but not limited to Sections 6 and 7 of
this Agreement.
(d) The
Employer agrees to provide the Executive with continued
medical
and
dental
insurance until the earlier to occur of (i) the passage of 36
months following the Retirement Date, (ii) the date of the
Executive’s full-time employment with another employer
pursuant to which he becomes entitled under the terms of such
employment to medical and dental benefits or (iii) the date
that the Executive becomes entitled to medical and dental
benefits pursuant to coverage provided to his spouse by her
employer. The coverage provided during such period will be
comparable to the coverage provided by the Employer to other
employees, with the Executive responsible for paying the same
share of any premiums, co-payments or deductibles as if he
was still an employee; provided that any insurance premiums
payable by the Employer or any successors pursuant to this
Section 2(d) shall be payable at such times and in such
amounts as if the Executive was still an employee of the
Employer, subject to any increases in such amounts imposed by
the insurance company or COBRA, and the amount of insurance
premiums required to be paid by the Employer in any taxable
year shall not affect the amount of insurance premiums
required to be paid by the Employer in any other taxable
year.
(e) The
Employer shall have no obligation to make contributions for service
subsequent to the Retirement Date with respect to the Bank’s
401(k) Plan, the SERP, the Bank’s Employee Stock Ownership
Plan (the “ESOP”), the Bank’s Executive Deferred
Compensation Plan (the “EDCP”) or any other
tax-qualified or non-tax-qualified retirement or profit sharing
plan on behalf of the Executive, and the Executive shall have no
right to participate in or accrue any additional benefit related to
such plans for service after the Retirement Date. All of
the Executive’s accrued and vested benefits held under the
401(k) Plan, the ESOP and the EDCP as of the Retirement Date shall
be payable to the Executive in accordance with the terms of such
plans, with the Executive being deemed to have a Separation from
Service (as such term is defined in the EDCP) as of the Retirement
Date. The Executive and his beneficiaries shall not be
entitled to receive any benefits under the SERP or, following the
Retirement Date, under the Executive’s split dollar insurance
agreement with the Bank.
(f) The
value of the Executive’s accrued but unused vacation
leave as of the Retirement Date shall be paid to the Executive
within ten business days following the Retirement
Date.
(g) The
Executive shall not be entitled to any cash bonus for service
in fiscal 2008 under any Employer bonus plan.
3.
Stock
Option Plans . It is acknowledged that no
additional arrangements are being provided by the Employer to
the Executive under any of the stock option plans (the
“Option Plans”) of Abington Bancorp, Inc. (the
“Company”). All outstanding stock
options held by the Executive under the Option Plans which are
not exercisable as of the Retirement Date shall be forfeited
by the Executive, and all vested stock options held by the
Executive shall remain exercisable for the time periods set
forth in the Option Plans and related grant
agreements. As of the Effective Date, the Executive
holds 37,440 vested stock options, with an additional 18,720
stock options scheduled to vest on July 5, 2008.
4.
Recognition
and Retention Plans . It is acknowledged
that no additional arrangements are being provided by the
Employer to the Employee under any of the Company’s
recognition and retention plans (the “RRPs”) and
that awards previously made by the Company to the Employee
under the RRPs which remain unvested as of the Retirement Date
shall not accelerate or be deemed earned and will be forfeited
in accordance with the terms of the RRPs as of the date
thereof. As of the Effective Date, the Executive
holds an award for 5,600 RRP shares which is scheduled to vest
on July 5, 2008. Because the remaining unvested RRP
shares are not scheduled to vest until after the Retirement
Date, they will be forfeited as of the Retirement
Date.
5.
Consulting
Services .
(a)
Consulting
Period . The Bank hereby agrees to engage
the Executive, and the Executive hereby agrees to provide
consulting services to the Bank, subject to the terms and
conditions of this Agreement, for the period commencing on the
Retirement Date and ending 18 months thereafter (the
“Consulting Period”). During the
Consulting Period, the Executive shall be treated as an
independent contractor and shall not be deemed to be an
employee of the Bank or any subsidiary or affiliate of the
Bank.
(b)
Duties
. During the Consulting Period, the Executive shall
report to the President of the Bank or his designee, and shall
provide his personal advice and counsel to the Bank regarding
its operations, customer relationships, growth and expansion
opportunities and other business matters that may arise in
connection with the business and operations of the Bank and
its subsidiaries and affiliates in the Commonwealth of
Pennsylvania and as may be reasonably requested by the
President of the Bank or his designee from time to time
(collectively, the “Consulting
Services”). It is contemplated that the
Consulting Services will include, without limitation, (i)
meetings or teleconferences between the Executive and the
President of the Bank, and (ii) efforts by the Executive to
enhance the business activities of the Bank and its
subsidiaries and affiliates in the Commonwealth of
Pennsylvania, including without limitation meeting with
existing and potential customers of the Bank and its
subsidiaries located in such state. Consulting
Services may be provided in person, telephonically,
electronically or by correspondence to the extent appropriate
under the circumstances.
(c)
Geographic
Location . The Executive shall provide the
Consulting Services in the Commonwealth of Pennsylvania,
including without limitation the market areas of the
Bank.
(d)
Time
Limitation . In no event shall the Executive
be required to provide Consulting Services hereunder for more
than eight hours per week or 30 hours in any calendar month
during the Consulting Period, with the maximum monthly hours
being pro-rated for the first and last month of the Consulting
Period.
6.
Non-Competition
Provisions . The Executive agrees that
during the 36-month period immediately following the
Retirement Date (the “Noncompetition Period”), the
Executive will not (i) without the prior written consent of
the Bank (which consent may be given or withheld in the
Bank’s sole discretion), directly or indirectly, engage
in, become interested in, or become associated with, in the
capacity of employee, consultant, director, officer, owner,
principal, agent, trustee or in any other capacity whatsoever,
any proprietorship, partnership, corporation, enterprise or
entity located in any county in which the Company, the Bank or
any of their subsidiaries maintains an office or in any
immediately adjacent county located in Pennsylvania
(collectively, the “Counties” and individually a
“County”), which proprietorship, partnership,
corporation, enterprise or other entity is, or may be deemed
to be by the Bank, competitive with any business carried on by
the Company, the Bank or any of their subsidiaries, including
but not limited to entities which lend money and take deposits
(in each case, a “Competing Business”), provided,
however, that this provision shall not prohibit the Executive
from owning bonds, non-voting preferred stock or up to five
percent (5%) of the outstanding common stock of any Competing
Business if such common stock is publicly traded, (ii) solicit
or induce, or cause others to solicit or induce, any employee
of the Employer or its subsidiaries or affiliates to leave the
employmen
