Exhibit 10.29
ASTORIA FINANCIAL CORPORATION
EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
December 1, 2003 by and between ASTORIA FINANCIAL CORPORATION, a business
corporation organized and operating under the laws of the State of Delaware and
having an office at One Astoria Federal Plaza, Lake Success, New York 11042-1085
(the "Company"), and GARY T. MCCANN, an individual residing at 17 Shoreham Road,
Massapequa, New York 11758 (the "Executive").
WITNESSETH:
WHEREAS, the Executive currently serves the Company in the capacity of
Executive Vice President and as Executive Vice President of its wholly owned
subsidiary, ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association");
and
WHEREAS, the Executive currently has a Change of Control Severance
Agreement with the Company dated January 1, 2000 which the Executive and the
Company wish to terminate and replace with this Agreement; and
WHEREAS, the Company desires to assure for itself the continued
availability of the Executive's services and the ability of the Executive to
perform such services with a minimum of personal distraction in the event of a
pending or threatened Change of Control (as hereinafter defined); and
WHEREAS, the Executive is willing to continue to serve the Company on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the Company and the Executive hereby
terminate in its entirety the Change of Control Severance Agreement by and
between the Company and the Executive dated as of January 1, 2000 and replace
such Change of Control Severance Agreement in all respects and manner with this
Agreement so as to provide as follows from and after the date hereof:
Section 1. Employment.
The Company agrees to continue to employ the Executive, and the Executive
hereby agrees to such continued employment, during the period and upon the terms
and conditions set forth in this Agreement.
Section 2. Employment Period; Remaining Unexpired Employment Period.
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(a) The terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this Section
2 (the "Employment Period"). The Employment Period shall be for an
initial term of three years beginning on the date of this Agreement
and ending on the day before the third anniversary date of this
Agreement, plus such extensions, if any, as are provided by the Board
of Directors of the Company (the "Board") pursuant to Section 2(b).
(b) Beginning on the date of this Agreement, the Employment Period shall
automatically be extended for one (1) additional day each day, unless
either the Company or the Executive elects not to extend the Agreement
further by giving written notice to the other party, in which case the
Employment Period shall end on the day before the third anniversary of
the date on which such written notice is given. For all purposes of
this Agreement, the term "Remaining Unexpired Employment Period" as of
any date shall mean the period beginning on such date and ending on:
(i) if a notice of non-extension has been given in accordance with
this Section 2(b), the day before the third anniversary of the
date on which such notice is given; and
(ii) in all other cases, the day before the third anniversary of the
date as of which the Remaining Unexpired Employment Period is
being determined.
Upon termination of the Executive's employment with the Company for
any reason whatsoever, any daily extensions provided pursuant to this
Section 2(b), if not previously discontinued, shall automatically
cease.
(c) Nothing in this Agreement shall be deemed to prohibit the Company from
terminating the Executive's employment at any time during the
Employment Period with or without notice for any reason; provided,
however, that the relative rights and obligations of the Company and
the Executive in the event of any such termination shall be determined
pursuant to this Agreement.
Section 3. Duties.
The Executive shall serve as Executive Vice President of the Company,
having such power, authority and responsibility and performing such duties as
are prescribed by or pursuant to the By-Laws of the Company and as are
customarily associated with such position. The Executive shall devote his or her
full business time and attention (other than during weekends, holidays, approved
vacation periods, and periods of illness or approved leaves of absence) to the
business and affairs of the Company, its affiliates and subsidiaries and shall
use his or her best efforts to advance the interests of the Company.
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Section 4. Cash Compensation.
In consideration for the services to be rendered by the Executive
hereunder, the Company shall pay to him or her a salary at an initial annual
rate of TWO HUNDRED TWELVE THOUSAND DOLLARS ($212,000), payable in approximately
equal installments in accordance with the Company's customary payroll practices
for senior officers. At least annually during the Employment Period, the Board
shall review the Executive's annual rate of salary and may, in its discretion,
approve an increase therein. In no event shall the Executive's annual rate of
salary under this Agreement in effect at a particular time be reduced without
his or her prior written consent and any such reduction in the absence of such
consent shall be a material breach of this Agreement. In addition to salary, the
Executive may receive other cash compensation from the Company for services
hereunder at such times, in such amounts and on such terms and conditions as the
Board may determine from time to time.
Section 5. Employee Benefit Plans and Programs.
During the Employment Period, the Executive shall be treated as an employee
of the Company and shall be entitled to participate in and receive benefits
under any and all qualified or non-qualified retirement, pension, savings,
profit-sharing or stock bonus plans, any and all group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans, and any other employee benefit and compensation
plans (including, but not limited to, any incentive compensation plans or
programs, stock option and appreciation rights plans and restricted stock plans)
as may from time to time be maintained by, or cover employees of, the Company,
in accordance with the terms and conditions of such employee benefit plans and
programs and compensation plans and programs and consistent with the Company's
customary practices.
Section 6. Indemnification and Insurance.
(a) During the Employment Period and for a period of six (6) years
thereafter, the Company shall cause the Executive to be covered by and
named as an insured under any policy or contract of insurance obtained
by it to insure its directors and officers against personal liability
for acts or omissions in connection with service as an officer or
director of the Company or service in other capacities at the request
of the Company. The coverage provided to the Executive pursuant to
this Section 6 shall be of the same scope and on the same terms and
conditions as the coverage (if any) provided to other officers or
directors of the Company.
(b) To the maximum extent permitted under applicable law, during the
Employment Period and for a period of six (6) years thereafter, the
Company shall indemnify the Executive against, and hold him or her
harmless from, any costs, liabilities, losses and exposures to the
fullest extent and on the most favorable terms and conditions
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that similar indemnification is offered to any director or officer of
the Company or any subsidiary or affiliate thereof.
Section 7. Other Activities.
(a) The Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he or she may
disclose to and as may be approved by the Board (which approval shall
not be unreasonably withheld); provided, however, that such service
shall not materially interfere with the performance of his or her
duties under this Agreement. The Executive may also engage in personal
business and investment activities which do not materially interfere
with the performance of his or her duties hereunder; provided,
however, that such activities are not prohibited under any code of
conduct or investment or securities trading policy established by the
Company and generally applicable to all similarly situated executives.
(b) The Executive may also serve as an officer or director of the
Association on such terms and conditions as the Company and the
Association may mutually agree upon, and such service shall not be
deemed to materially interfere with the Executive's performance of his
or her duties hereunder or otherwise result in a material breach of
this Agreement. If the Executive is discharged or suspended, or is
subject to any regulatory prohibition or restriction with respect to
participation in the affairs of the Association, he or she shall
(subject to the Company's powers of termination hereunder) continue to
perform services for the Company in accordance with this Agreement but
shall not directly or indirectly provide services to or participate in
the affairs of the Association in a manner inconsistent with the terms
of such discharge or suspension or any applicable regulatory order.
Section 8. Working Facilities and Expenses.
The Executive's principal place of employment shall be at the Company's
executive offices at the address first above written, or at such other location
within Queens County or Nassau County, New York at which the Company shall
maintain its principal executive offices, or at such other location as the
Company and the Executive may mutually agree upon. The Company shall provide the
Executive at his or her principal place of employment with a private office,
secretarial services and other support services and facilities suitable to his
or her position with the Company and necessary or appropriate in connection with
the performance of his or her assigned duties under this Agreement. The Company
shall provide to the Executive for his or her exclusive use an automobile owned
or leased by the Company and appropriate to his or her position, to be used in
the performance of his or her duties hereunder, including commuting to and from
his or her personal residence. The Company shall reimburse the Executive for his
or her ordinary and necessary business expenses, including, without limitation,
all expenses associated with his or her business use of the aforementioned
automobile, fees for memberships in such clubs and organizations as the
Executive
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and the Company shall mutually agree are necessary and appropriate for business
purposes, and his or her travel and entertainment expenses incurred in
connection with the performance of his or her duties under this Agreement, in
each case upon presentation to the Company of an itemized account of such
expenses in such form as the Company may reasonably require.
Section 9. Termination of Employment with Severance Benefits.
(a) The Executive shall be entitled to the severance benefits described
herein in the event that his or her employment with the Company
terminates during the Employment Period under any of the following
circumstances:
(i) the Executive's voluntary resignation from employment with the
Company within six (6) months following:
(A) the failure of the Board to appoint or re-appoint or elect
or re-elect the Executive to the office of Executive Vice
President (or a more senior office) of the Company;
(B) if the Executive is or becomes a member of the Board, the
failure of the stockholders of the Company to elect or
re-elect the Executive to the Board or the failure of the
Board (or the nominating committee thereof) to nominate the
Executive for such election or re-election;
(C) the expiration of a thirty (30) day period following the
date on which the Executive gives written notice to the
Company of its material failure, whether by amendment of the
Company's Certificate of Incorporation or By-laws, action of
the Board or the Company's stockholders or otherwise, to
vest in the Executive the functions, duties, or
responsibilities prescribed in Section 3 of this Agreement
as of the date hereof, unless, during such thirty (30) day
period, the Company cures such failure in a manner
determined by the Executive, in his or her discretion, to be
satisfactory;
(D) the expiration of a thirty (30) day period following the
date on which the Executive gives written notice to the
Company of its material breach of any term, condition or
covenant contained in this Agreement (including, without
limitation, any reduction of the Executive's rate of base
salary in effect from time to time and any change in the
terms and conditions of any compensation or benefit program
in which the Executive participates which, either
individually or together with other changes, has a material
adverse effect on the aggregate value of his or her total
compensation package), unless, during such thirty (30) day
period, the Company
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cures such failure in a manner determined by the Executive,
in his or her discretion, to be satisfactory; or
(E) the relocation of the Executive's principal place of
employment, without his or her written consent, to a
location outside of Nassau County and Queens County, New
York;
(ii) the termination of the Executive's employment with the Company
for any other reason not described in Section 10(a).
In such event, the Company shall provide the benefits and pay to the
Executive the amounts described in Section 9(b).
(b) Upon the termination of the Executive's employment with the Company
under circumstances described in Section 9(a) of this Agreement, the
Company shall pay and provide to the Executive (or, in the event of
the Executive's death following the Executive's termination of
employment, to his or her estate):
(i) his or her earned but unpaid compensation (including, without
limitation, all items which constitute wages under Section 190.1
of the New York Labor Law and the payment of which is not
otherwise provided for under this Section 9(b)) as of the date of
the termination of his or her employment with the Company, such
payment to be made at the time and in the manner prescribed by
law applicable to the payment of wages but in any event not later
than thirty (30) days after termination of employment;
(ii) the benefits, if any, to which he or she is entitled as a former
employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Company's officers and employees;
(iii) continued group life, health (including hospitalization, medical
and major medical), dental, accident and long term disability
insurance benefits, in addition to that provided pursuant to
Section 9(b)(ii), and after taking into account the coverage
provided by any subsequent employer, if and to the extent
necessary to provide for the Executive, for the Remaining
Unexpired Employment Period, coverage (including any co-payments
and deductibles, but excluding any premium sharing arrangements,
it being the intention of the parties to this Agreement that the
premiums for such insurance benefits shall be the sole cost and
expense of the Company) equivalent to the coverage to which he or
she would have been entitled under such plans (as in effect on
the date of his or her termination of employment, or, if his or
her termination of employment occurs after a Change of Control,
on the date of such Change of Control, whichever benefits are
greater), if he or she had continued
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working for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of salary or compensation, as
applicable, achieved during that portion of the Employment Period
which is prior to the Executive's termination of employment with
the Company;
(iv) within thirty (30) days following the Executive's termination of
employment with the Company, a lump sum payment in an amount
representing an estimate of the salary that the Executive would
have earned if he or she had continued working for the Company
during the Remaining Unexpired Employment Period at the highest
annual rate of salary achieved during that portion of the
Employment Period which is prior to the Executive's termination
of employment with the Company (the "Salary Severance Payment").
The Salary Severance Payment shall be computed using the
following formula:
SSP = BS x NY
where:
"SSP" is the amount of the Salary Severance Payment, before the
deduction of applicable federal, state and local withholding
taxes;
"BS" is the highest annual rate of salary achieved during that
portion of the Employment Period which is prior to the
Executive's termination of employment with the Company;
"NY" is the Remaining Unexpired Employment Period expressed as a
number of years (rounded, if such period is not a whole number,
to the next highest whole number).
The Salary Severance Payment shall be paid in lieu of all other
payments of salary provided for under this Agreement in respect
of the period following any such termination.
(v) within thirty (30) days following the Executive's termination of
employment with the Company, a lump sum payment (the "DB
Severance Payment") in an amount equal to the excess, if any, of:
(A) the present value of the aggregate benefits to which he or
she would be entitled under any and all qualified and
non-qualified defined benefit pension plans maintained by,
or covering employees of, the Company, if he or she were
100% vested thereunder and had continued working for the
Company during the Remaining Unexpired
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Employment Period, such benefits to be determined as of the
date of termination of employment by adding to the service
actually recognized under such plans an additional period
equal to the Remaining Unexpired Employment Period and by
adding to the compensation recognized under such plans for
the most recent year recognized all amounts payable pursuant
to Sections 9(b)(i), (iv), (vii), (viii) and (ix) of this
Agreement; over
(B) the present value of the benefits to which he or she is
actually entitled under such defined benefit pension plans
as of the date of his or her termination;
The DB Severance Payment shall be computed using the following
formula:
DBSP = SEVLS - LS
where:
"DBSP" is the amount of the DB Severance Payment, before the
deduction of applicable federal, state and local withholding
taxes;
"SEVLS" is the sum of the present value of the defined benefit
pension benefits that have been or would be accrued by the
Executive under all qualified and non-qualified defined benefit
pension plans of which the Company or any of its affiliates or
subsidiaries are a sponsor and in which the Executive is or, but
for the completion of any service requirement that would have
been completed during the Remaining Unexpired Employment Period,
would be a participant utilizing the following assumptions:
(I) the executive is 100% vested in the plans regardless of
actual service,
(II) the benefit to be valued shall be a single life annuity
with monthly payments due on the first day of each
month and with a guaranteed payout of not less than 120
monthly payments,
(III) the calculation shall be made utilizing the same
mortality table and interest rate as would be utilized
by the plan on the date of termination as if the
calculation were being made pursuant to Section
417(e)(3)(A)(ii) of the Internal Revenue Code, as
amended, (the "Code");
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(IV) for purpose of calculating the Executive's monthly or
annual benefit under the defined benefit plans,
additional service equal to the Remaining Unexpired
Employment Period (rounded up to the next whole year if
such period is not a whole number when expressed in
years) shall be added to the Executive's actual service
to calculate the amount of the benefit; and
(V) for purpose of calculating the Executive's monthly or
annual benefit under the defined benefit plans, the
following sums shall be added to the Executive's
compensation recognized under such plans for the most
recent year recognized:
(1) payments made pursuant to Section 9(b)(i);
(2) the Salary Severance Payment;
(3) the Bonus Severance Payment;
(4) the Option Surrender Payment; and
(5) the RRP Surrender Payment.
"LS" is the sum of the present value of the defined benefit
pension benefits that are vested benefits actually accrued by the
Executive under all qualified and non-qualified defined benefit
pension plans maintained by, or covering employees of, the
Company or any of its affiliates or subsidiaries in which the
Executive is or, but for the completion of any service
requirement, would be a participant utilizing the following
assumptions:
(I) the benefit to be valued shall be a single life annuity
with monthly payments due on the first day of each
month and with a guaranteed payout of not less than 120
monthly payments, and
(II) the calculation shall be made utilizing the same
mortality table and interest rate as would be utilized
by the plan on the date of termination as if the
calculation were being made pursuant to Section
417(e)(3)(A)(ii) of the Code;
(vi) within thirty (30) days following the Executive's termination of
employment with the Company, a lump sum payment (the "Defined
Contribution Severance Payment") equal to the sum of:
(A) an estimate of the additional employer contributions to
which he or she would have been entitled under any and all
qualified and non-qualified defined contribution pension
plans, excluding the employee
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stock ownership plans, maintained by, or covering employees
of, the Company or any of its affiliates or subsidiaries as
if he or she were 100% vested thereunder and had continued
working for the Company during the Remaining Unexpired
Employment Period (the "401K Severance Payment"); and
(B) an estimate of the value of the additional assets which
would have been allocable to him or her through debt service
or otherwise under any and all qualified and non-qualified
employee stock ownership plans, maintained by, or covering
employees of, the Company or any of its affiliates or
subsidiaries as if he or she were 100% vested thereunder and
had continued working for the Company during the Remaining
Unexpired Employment Period, based on the fair market value
of such assets at termination of employment (the "ESOP
Severance Payment").
The Defined Contribution Severance Payment shall be calculated as
follows:
DCSP = 401KSP + ESOPSP
where:
"DCSP" is the amount of the Defined Contribution Severance
Payment, before the deduction of applicable federal, state and
local withholding taxes;
"401KSP" is the amount of the 401K Severance Payment, before the
deduction of applicable federal, state and local withholding
taxes; and
"ESOPSP" is the amount of the ESOP Severance Payment, before the
deduction of applicable federal, state and local withholding
taxes.
The 401KSP shall be calculated as follows:
401KSP = (401KC x NY) + UVB
where
"401KC" is the sum of the Company Contributions as defined in the
Association's Incentive Savings Plan or, if made under another
defined contribution pension plan other than an employee stock
ownership plan, the comparable contribution made for the benefit
of the Executive during the one year period which shall end on
the date of his or her termination of his or her employment with
the Company;
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"NY" is the Remaining Unexpired Employment Period expressed as a
number of years (rounded, if such period is not a whole number,
to the next highest whole number); and
"UVB" is the actual balance credited to the Executive's account
under the applicable plan at the date of his or her termination
of employment that is not vested and does not become vested as a
consequence of such termination of employment.
The ESOPSP shall be calculated as follows:
ESOPSP = (((ALL x FMV) + C) x NY) + UVB
where:
"ALL" is the sum of the number of shares of the Company's common
stock or, if applicable, phantom shares of such stock by whatever
term it is described allocated to the Executive's accounts under
all qualified and non-qualified employee stock ownership plans
maintained by the Company or any of its affiliates or
subsidiaries during or for the last complete plan year in which
the Executive participated in such plans and received such an
allocation whether the allocation occurred as a result of
contributions made by the Company, the payment by the Company or
any of its affiliates or subsidiaries of any loan payments under
a leveraged employee stock ownership plan, the allocation of
forfeitures under the terms of such plan or as a result of the
use of cash or earnings allocated to the Executive's account
during such plan year to make loan payments that result in share
allocations, provided however, that excluded shall be any shares
or phantom shares allocated to the Executive's account under any
qualified and non-qualified employee stock ownership plans
maintained by the Company or any of its affiliates or
subsidiaries solely as a result of the termination of such plans,
provided further, that if the shares allocated are not shares of
the Association's common stock or phantom shares of such stock
than shares of whatever securities are so allocated shall be
utilized, and provided further, that in the event that there
shall be any shares or phantom shares allocated during the then
current plan year or the last complete plan year to the
Executive's account under any qualified and non-qualified
employee stock ownership plans maintained by the Association or
any of its affiliates or subsidiaries solely as a result of the
termination of such plans, the ALL shall be reduced (but not to
an amount less than zero (0)) by an amount calculated by
multiplying the number of shares or phantom shares allocated to
the Executive's account solely as a result of the termination of
such plans times the FMV utilized to calculate the ESOPSP;
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"C" is the sum of all cash allocated to the Executive's accounts
under all qualified and non-qualified employee stock ownership
plans maintained by the Company during or for the last complete
plan year in which the Executive participated in such plans
whether the allocation occurred as a result of contributions made
by the Company, the payment by the Company or the Association of
any loan payments under a leveraged employee stock ownership plan
or the allocation of forfeitures under the terms of such plan
during such plan year;
"FMV" is the closing price of the Company's common stock on the
New York Stock Exchange or on whatever other stock exchange or
market such stock is publicly traded on the date the Executive's
employment terminates or, if such day is not a day on which such
securities are traded, on the most recent preceding trading day
on which a trade occurs, provided however that if the security
allocated to the Executive's account during the last completed
plan year is other than the Company's common stock the closing
price of such other security on the date the Executive's
employment terminates shall be utilized.
"NY" is the Remaining Unexpired Employment Period expressed as a
number of years (rounded, if such period is not a whole number,
to the next highest whole number); and
"UVB" is the actual balance credited to the Executive's account
under the applicable plan at the date of his or her termination
of employment that is not vested and does not become vested as a
consequence of such termination of employment.
(vii) within thirty (30) days following the Executive's termination of
employment with the Company, the Company shall make a lump sum
payment to the Executive in an amount equal to the estimated
potential annual bonuses or incentive compensation that the
Executive could have earned if the Executive had continued
working for the Company during the Unexpired Employment Period at
the highest annual rate of salary achieved during that portion of
the Employment Period which is prior to the Executive's
termination of employment with the Company (the "Bonus Severance
Payment"). The Bonus Severance Payment shall be computed using
the following formula:
BSP = ( BS x TIO x AP x NY)
where:
"BSP" is the amount of the Bonus Severance Payment, before the
deduction
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of applicable federal, state and local withholding taxes;
"BS" is the highest annual rate of salary achieved during that
portion of the Employment Period which is prior to the
Executive's termination of employment with the Company;
"TIO" is the highest target incentive opportunity (expressed as a
percentage of base salary) established by the Compensation
Committee of the Board for the Executive pursuant to the Astoria
Financial Corporation Executive Officer Annual Incentive Plan
during that portion of the Employment Period which is prior to
the Executive's termination of employment with the Company;
"AP" is the highest award percentage available to the Executive
with respect to the financial performance of the Company
(expressed as a percentage of the TIO) established by the
Compensation Committee of the Board for the Executive pursuant to
the Astoria Financial Corporation Executive Officer Annual
Incentive Plan during the period during that portion of the
Employment Period which is prior to the Executive's termination
of employment with the Company; and
"NY" is the Remaining Unexpired Employment Period expressed as a
number of years (rounded, if such period is not a whole number,
to the next highest whole number).
(viii) at the election of the Company made within thirty (30) days
following the Executive's termination of employment with the
Company, upon the surrender of options or appreciation rights
issued to the Executive under any stock option and appreciation
rights plan or program maintained by, or covering employees of,
the Company, a lump sum payment (the "Option Surrender Payment").
The Option Surrender Payment shall be calculated as follows:
OSP = (FMV - EP) x N
where:
"OSP" is the amount of the Option Surrender Payment, before the
deduction of applicable federal, state and local withholding
taxes;
"FMV" is the closing price of the Company's common stock on the
New York Stock Exchange, or on whatever other stock exchange or
market such stock is publicly traded, on the date the Executive's
employment terminates
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or, if such day is not a day on which such securities are traded,
on the most recent preceding trading day on which a trade occurs,
provided however that if the option or stock appreciation right
is for a security other than the Company's common stock, the fair
market value of a share of stock of the same class as the stock
subject to the option or appreciation right, determined as of the
date of termination of employment shall be utilized;
"EP" is the exercise price per share for such option or
appreciation right, as specified in or under the relevant plan or
program; and
"N" is the number of shares with respect to which options or
appreciation rights are being surrendered.
For purposes of determining the Option Severance Payment and for
purposes of determining the Executive's right following his or
her termination of employment with the Company to exercise any
options or appreciation rights not surrendered pursuant hereto,
the Executive shall be deemed fully vested in all options and
appreciation rights under any stock option or appreciation rights
plan or program maintained by, or covering employees of, the
Company, even if he or she is not vested under such plan or
program;
(ix) at the election of the Company made within thirty (30) days
following the Executive's termination of employment with the
Company, upon the surrender of any shares awarded to the
Executive under any restricted stock plan maintained by, or
covering employees of, the Company, a lump sum payment (the "RRP
Surrender Payment") The RRP Surrender Payment shall be calculated
as follows:
RSP = FMV x N
where:
"RSP" is the amount of the RRP Surrender Payment, before the
deduction of applicable federal, state and local withholding
taxes;
"FMV" is the closing price of the Company's common stock on the
New York Stock Exchange, or on whatever other stock exchange or
market such stock is publicly traded, on the date the Executive's
employment terminates or, if such day is not a day on which such
securities are traded, on the preceding trading day on which a
trade occurs, provided however that if the restricted stock is a
security other than the Company's common stock, the fair market
value of a share of stock of the same class as the stock granted
under such plan, determined as of the date of termination of
employment shall be
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utilized; and
"N" is the number of shares which are being surrendered.
For purposes of determining the RRP Surrender Payment and for
purposes of determining the Executive's right following his or
her termination of employment with the Company to any stock not
surrendered pursuant hereto, the Executive shall be deemed fully
vested in all shares awarded under any restricted stock plan
maintained by, or covering employees of, the Company, even if he
or she is not vested under such plan.
The Salary Severance Payment, the DB Severance Payment, the Defined
Contribution Severance Payment, the Bonus Severance Payment, the
Option Surrender Payment and the RRP Surrender Payment shall be
computed at the expense of the Company by an attorney of the firm of
Thacher Proffitt & Wood, Two World Financial Center, New York, New
York 10281 or, if such firm is unavailable or unwilling to perform
such calculation, by a firm of independent certified public
accountants selected by the Executive and reasonably satisfactory to
the Company (the "Computation Advisor"). The determination of the
Computation Advisor as to the amount of such payments shall be final
and binding in the absence of manifest error.
The Company and the Executive hereby stipulate that the damages which
may be incurred by the Executive following any such termination of
employment are not capable of accurate measurement as of the date
first above written and that the payments and benefits contemplated by
this Section 9(b) constitute reasonable damages under the
circumstances and shall be payable without any requirement of proof of
actual damage and without regard to the Executive's efforts, if any,
to mitigate damages. The Company and the Executive further agree that
the Company may condition the payment of the Salary Severance Payment,
the DB Severance Payment, the Defined Contribution Severance Payment,
the Bonus Severance Payment, the Option Surrender Payment and the RRP
Surrender Payment on the receipt of the Executive's resignation from
any and all positions which he or she holds as an officer, director or
committee member with respect to the Company, the Association or any
subsidiary or affiliate of either of them.
Section 10. Termination without Additional Company Liability.
(a) In the event that the Executive's employment with the Company shall
terminate during the Employment Period on account of:
(i) the discharge of the Executive for Cause, which, for purposes of
this Agreement shall mean:
Page 15 of 31
(A) the Executive intentionally engages in dishonest conduct in
connection with the Executive's performance of services for
the Company resulting in the Executive's conviction of a
felony;
(B) the Executive is convicted of, or pleads guilty or nolo
contendere to, a felony or any crime involving moral
turpitude;
(C) the Executive willfully fails or refuses to perform the
Executive's duties under this Agreement and fails to cure
such breach within sixty (60) days following written notice
thereof from the Company;
(D) the Executive breaches the Executive's fiduciary duties to
the Company for personal profit;
(E) the Executive's willful breach or violation of any law, rule
or regulation (other than traffic violations or similar
offenses), or final cease and desist order in connection
with the Executive's performance of services for the
Company; or
(F) the Executive's material breach of any material provision of
this Agreement which is not substantially cured within 60
days after written notice of such breach is received by the
Executive from the Company.
(ii) the Executive's voluntary resignation from employment with the
Company for reasons other than those specified in Section 9(a)
or 11(b);
(iii) the Executive's death;
(iv) a determination that the Executive is Disabled;
(v) the Executive's termination of employment for any reason at or
after attainment of mandatory retirement age under the Company's
mandatory retirement policy for executive officers in effect as
of the date of this Agreement;
then the Company, except as otherwise specifically provided herein,
shall have no further obligations under this Agreement, other than the
payment to the Executive (or, in the event of his or her death, to his
or her estate) of the amounts or benefits provided in Section 9(b)(i)
and (ii) of this Agreement (the "Standard Termination Entitlements").
(b) For purposes of Section 10(a)(i), no act or failure to act, on the
part of the Executive,
Page 16 of 31
shall be considered "intentional" or "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or
based upon the written advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.
Except as specifically provided below, the cessation of employment of
the Executive shall not be deemed to be for Cause within the meaning
of Section 10(a)(i) unless and until:
(i) the Board, by the affirmative vote of 75% of its entire
membership, determines that the Executive is guilty of the
conduct described in Section 10(a)(i) above measured against
standards generally prevailing at the relevant time in the
savings and community banking industry;
(ii) prior to the vote contemplated by Section 10(b)(i), the Board
shall provide the Executive with notice of the Company's intent
to discharge the Executive for Cause, detailing with
particularity the facts and circumstances which are alleged to
constitute Cause (the "Notice of Intent to Discharge"); and
(iii) after the giving of the Notice of Intent to Discharge and before
the taking of the vote contemplated by Section 10(b)(i), the
Executive, together with the Executive's legal counsel, if the
Executive so desires, are afforded a reasonable opportunity to
make both written and oral presentations before the Board for
the purpose of refuting the alleged grounds for Cause for the
Executive's discharge; and
(iv) after the vote contemplated by Section 10(b)(i), the Company has
furnished to the Executive a notice of termination which shall
specify the effective date of the Executive's termination of
employment (which shall in no event be earlier than the date on
which such notice is deemed given) and include a copy of a
resolution or resolutions adopted by the Board, certified by
its corporate secretary, authorizing the termination of the
Executive's employment with Cause and stating with particularity
the facts and circumstances found to constitute Cause for the
Executive's discharge (the "Final Discharge Notice").
If the Executive, during the 90 (ninety) day period commencing on the
delivery by the Company to the Executive of the Notice of Intent to
Discharge specified in Section 10(b)(ii), resigns his or her
employment with the Company prior to the delivery to the Executive by
the Company of the Final Discharge Notice specified in Section
10(b)(iv), then the cessation of employment of the Executive shall be
deemed to be for Cause.
Page 17 of 31
Following the giving of a Notice of Intent to Discharge, the Bank may
temporarily suspend the Executive's duties and authority and, in such
event, may also suspend the payment of salary and other cash
compensation, but not the Executive's participation in retirement,
insurance and other employee benefit plans. If the Executive is not
discharged or is discharged without Cause within forty-five (45) days
after the giving of a Notice of Intent to Discharge, payments of
salary and cash compensation shall resume, and all payments withheld
during the period of suspension shall be promptly restored. If the
Executive is discharged with Cause not later than forty-five (45) days
after the giving of the Notice of Intent to Discharge, all payments
withheld during the period of suspension shall be deemed forfeited and
shall not be included in the Standard Termination Entitlements. If a
Final Discharge Notice is given later than forty-five (45) days, but
sooner than ninety (90) days, after the giving of the Notice of Intent
to Discharge, all payments made to the Executive during the period
beginning with the giving of the Notice of Intent to Discharge and
ending with the Executive's discharge with Cause shall be retained by
the Executive and shall not be applied to offset the Standard
Termination Entitlements. If the Bank does not give a Final Discharge
Notice to the Executive within ninety (90) days after giving a Notice
of Intent to Discharge, the Notice of Intent to Discharge shall be
deemed withdrawn and any future action to discharge the Executive with
Cause shall require the giving of a new Notice of Intent to Discharge.
If the Executive resigns pursuant to Section 10(b), the Executive
shall forfeit his or her right to suspended amounts that have not been
restored as of the date of the Executive's resignation or notice of
resignation, whichever is earlier.
(c) The Company may terminate the Executive's employment on the basis that
the Executive is Disabled during the Employment Period upon a
determination by the Board, by the affirmative vote of 75% of its
entire membership, acting in reliance on the written advice of a
medical professional acceptable to it, that the Executive is suffering
from a physical or mental impairment which, at the date of the
determination, has prevented the Executive from performing the
Executive's assigned duties on a substantially full-time basis for a
period of at least one hundred and eighty (180) days during the period
of one (1) year ending with the date of the determination or is likely
to result in death or prevent the Executive from performing the
Executive's assigned duties on a substantially full-time basis for a
period of at least one hundred and eighty (180) days during the period
of one (1) year beginning with the date of the determination. In such
event:
(A) The Company shall pay and provide the Standard Termination
Entitlements to the Executive;
(B) In addition to the Standard Termination Entitlements,
the Company shall continue to pay to the Executive the
Executive's base salary, at the annual rate in effect for
the Executive immediately prior to the
Page 18 of 31
termination of the Executive's employment, during a period
ending on the earliest of:
(I) the expiration of one hundred and eighty (180) days
after the date of termination of the Executive's
employment;
(II) the date on which long-term disability insurance
benefits are first payable to the Executive under any
long-term disability insurance plan covering the
Executive; or
(III) the date of the Executive's death.
A termination of employment due to Disability under this Section
shall be effected by a notice of termination given to the
Executive by the Company and shall take effect on the later of
the effective date of termination specified in such notice or, if
no such date is specified, the date on which the notice of
termination is deemed given to the Executive.
Section 11. Termination Upon or Following a Change of Control.
(a) A Change of Control of the Company ("Change of Control") shall be
deemed to have occurred upon the happening of any of the following
events:
(i) approval by the stockholders of the Company of a transaction that
would result in the reorganization, merger or consolidation of
the Company with one or more other persons, other than a
transaction following which:
(A) at least 51% of the equity ownership interests of the entity
resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) in substantially the same relative proportions by
persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the
outstanding equity ownership interests in the Company; and
(B) at least 51% of the securities entitled to vote generally in
the election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) in
substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated
Page 19 of 31
under the Exchange Act) at least 51 % of the securities
entitled to vote generally in the election of directors of
the Company;
(ii) the acquisition of all or substantially all of the assets of
the Company or beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more
of the outstanding securities of the Company entitled to vote
generally in the election of directors by any person or by any
persons acting in concert, or approval by the stockholders of
the Company of any transaction which would result in such an
acquisition;
(iii) a complete liquidation or dissolution of the Company, or
approval by the stockholders of the Company of a plan for such
liquidation or dissolution;
(iv) the occurrence of any event if, immediately following such
event, at least 50% of the members of the Board do not belong
to any of the following groups:
(A) individuals who were members of the Board on the date of
this Agreement; or
(B) individuals who first became members of the Board after the
date of this Agreement either:
(I) upon election to serve as a member of the Board by
affirmative vote of three-quarters of the members of
such Board, or of a nominating committee thereof, in
office at the time of such first election; or
(II) upon election by the stockholders of the Company to
serve as a member of the Board, but only if nominated
for election by affirmative vote of three-quarters of
the members of the Board, or of a nominating committee
thereof, in office at the time of such first
nomination;
provided, however, that such individual's election or
nomination did not result from an actual or threatened
election contest (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents
(within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on
behalf of the Board; or
(v) any event which would be described in Section 11(a)(i), (ii),
(iii) or (iv) if the
Page 20 of 31
term "Association" were substituted for the term "Company"
therein or the term "Board of Directors of the Association" were
substituted for the term "Board".
In no event, however, shall a Change of Control be deemed to have
occurred as a result of any acquisition of securities or assets of the
Company, the Association, or an affiliate or subsidiary of either of
them, by the Company, the Association, or a subsidiary of either of
them, or by any employee benefit plan maintained by any of them. For
purposes of this Section 11 (a), the term "person" shall have the
meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the
Exchange Act.
(b) In the event of a Change of Control, the Executive shall be entitled
to the payments and benefits contemplated by Section 9(b) in the event
of his or her termination of employment with the Company under any of
the circumstances described in Section 9(a) of this Agreement or under
any of the following circumstances:
(i) resignation, voluntary or otherwise, by the Executive at any
time during the Employment Period within six (6) months
following his or her demotion, loss of title, office or
significant authority or responsibility or following any
reduction in any element of his or her package of compensation
and benefits;
(ii) resignation, voluntary or otherwise, by the Executive at any
time during the Employment Period within six (6) months
following any relocation of his or her principal place of
employment or any change in working conditions at such
principal place of employment which the Executive, in his or
her reasonable discretion, determines to be embarrassing,
derogatory or otherwise adverse;
(iii) resignation, voluntary or otherwise, by the Executive at any
time during the Employment Period within six (6) months
following the failure of any successor to the Company in the
Change of Control to include the Executive in any compensation
or benefit program maintained by it or covering any of its
executive officers, unless the Executive is already covered
by a substantially similar plan of the Company which is at
least as favorable to him or her; or
(iv) resignation, voluntary or otherwise, for any reason whatsoever
during the Employment Period within six months following the
effective date of the Change of Control.
Section 12. Tax Indemnification.
(a) This Section 12 shall apply if the Executive's employment is
terminated upon or
Page 21 of 31
following:
(i) a Change of Control (as defined in Section 11 of this Agreement);
or
(ii) a change "in the ownership or effective control" of the Company
or the Association or "in the ownership of a substantial portion
of the assets" of the Company or the Association within the
meaning of Section 28OG of the Code.
If this Section 12 applies, then, if for any taxable year, the
Executive shall be liable for the payment of an excise tax under
Section 4999 of the Code with respect to any payment in the nature of
compensation made by the Company, the Association or any direct or
indirect subsidiary or affiliate of the Company or the Association to
(or for the benefit of) the Executive, the Company shall pay to the
Executive an amount intended to indemnify the Executive against the
financial effects of the excise tax imposed on excess parachute
payments under Section 28OG of the Code (the "Tax Indemnity Payment").
The Tax Indemnity Payment shall be determined under the following
formula:
E x P
TIP = ----------------------------------------
1 - (( FI x ( 1 - SLI )) + SLI + E + M )
where:
"TIP" is the Tax Indemnity Payment, before the deduction of applicable
federal, state and local withholding taxes;
"E" is the percentage rate at which an excise tax is assessed under
Section 4999 of the Code;
"P" is the amount with respect to which such excise tax is assessed,
determined without regard to any amount payable pursuant to this
Section 12;
"FI" is the highest marginal rate of income tax applicable to the
Executive under the Code for the taxable year in question;
"SLI" is the sum of the highest marginal rates of income tax
applicable to the Executive under all applicable state and local laws
for the taxable year in question; and
"M" is the highest marginal rate of Medicare tax applicable to the
Executive under the Code for the taxable year in question.
Page 22 of 31
(b) The computation of the Tax Indemnity Payment shall be made at the
expense of the Company by the Computation Advisor and shall be based
on the following assumptions:
(i) that a change in ownership, a change in effective ownership or
control or a change in the ownership of a substantial portion of
the assets of the Association or the Company has occurred within
the meaning of Section 28OG of the Code (a "28OG Change of
Control");
(ii) that all direct or indirect payments made to or benefits
conferred upon the Executive on account of the Executive's
termination of employment are "parachute payments" within the
meaning of Section 28OG of the Code; and
(iii) that no portion of such payments is reasonable compensation for
services rendered prior to the Executive's termination of
employment.
(c) With respect to any payment that is presumed to be a parachute payment
for purposes of Section 28OG of the Code, the Tax Indemnity Payment
shall be made to the Executive on the earlier of the date the Company,
the Association or any direct or indirect subsidiary or affiliate of
the Company or the Association is required to withhold such tax or the
date the tax is required to be paid by the Executive, unless, prior to
such date, the Company delivers to the Executive the written opinion
(the "Opinion Letter"), in form and substance reasonably satisfactory
to the Executive, of the Computation Advisor or, if the Computation
Advisor is unable to provide such opinion, of an attorney or firm of
independent certified public accountants selected by the Company and
reasonably satisfactory to the Executive, to the effect that the
Executive has a reasonable basis on which to conclude that:
(i) no 28OG Change in Control has occurred, or
(ii) all or part of the payment or benefit in question is not a
parachute payment for purposes of Section 28OG of the Code, or
(iii) all or a part of such payment or benefit constitutes reasonable
compensation for services rendered prior to the 28OG Change of
Control, or
(iv) for some other reason which shall be set forth in detail in such
letter, no excise tax is due under Section 4999 of the Code with
respect to such payment or benefit.
If the Company delivers an Opinion Letter, the Computation Advisor
shall re-compute, and the Company shall make, the Tax Indemnity
Payment, if any, in reliance on the information contained in the
Opinion Letter.
Page 23 of 31
(d) In the event that the Executive's liability for the excise tax under
Section 4999 of the Code for a taxable year is subsequently determined
to be different than the amount with respect to which the Tax
Indemnity Payment is made, the Executive or the Company, as the case
may be, shall pay to the other party at the time that the amount of
such excise tax is finally determined, an appropriate amount, plus
interest, such that the payment made pursuant to Sections 12(a) and
12(c), when increased by the amount of the payment made to the
Executive pursuant to this Section 12(d), or when reduced by the
amount of the payment made to the Company pursuant to this Section
12(d), equals the amount that should have properly been paid to the
Executive under Sections 12(a) and 12(c). The interest paid to the
Company under this Section 12(d) shall be determined at the rate
provided under Section 1274(b)(2)(B) of the Code. The payment made to
the Executive shall include such amount of interest as is necessary to
satisfy any interest assessment made by the Internal Revenue Service
and an additional amount equal to any monetary penalties assessed by
the Internal Revenue Service on account of an underpayment of the
excise tax. To confirm that the proper amount, if any, was paid to the
Executive under this Section 12, the Executive shall furnish to the
Company a copy of each tax return which reflects a liability for an
excise tax, at least 20 days before the date on which such return is
required to be filed with the Internal Revenue Service. Nothing in
this Agreement shall give the Company any right to control or
otherwise participate in any action, suit or proceeding to which the
Executive is a party as a result of positions taken on the Executive's
federal income tax return with respect to the Executive's liability
for excise taxes under Section 4999 of the Code.
(e) The provisions of this Section 12 are designed to reflect the
provisions of applicable federal, state and local tax laws in effect
on the date of this Agreement. If, after the date hereof, there shall
be any change in any such laws, this Section 12 shall be modified in
such manner as the Executive and the Company may mutually agree upon
if and to the extent necessary to assure that the Executive is fully
indemnified against the economic effects of the tax imposed under
Section 4999 of the Code or any similar federal, state or local tax.
Section 13. Covenant Not To Compete.
The Executive hereby covenants and agrees that, in the event of his or her
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one (1) year following the date of his or her
termination of employment with the Company (or, if less, for the Remaining
Unexpired Employment Period), the Executive shall not, without the written
consent of the Company, become an officer, employee, consultant, director or
trustee of any savings bank, savings and loan association, savings and loan
holding company, bank or bank holding company, or any direct or indirect
subsidiary or affiliate of any such entity, that entails working in any city,
town or county in which the Association or the Company has an office or has
filed an application for regulatory approval to establish an office, determined
as of the effective date of the
Page 24 of 31
Executive's termination of employment; provided, however, that this Section 13
shall not apply if the Executive's employment is terminated for the reasons set
forth in Section 9(a); and provided, further, that if the Executive's employment
shall be terminated on account of Disability as provided in Section 10(c) of
this Agreement, this Section 13 shall not prevent the Executive from accepting
any position or performing any services if:
(a) he or she first offers, by written notice, to accept a similar
position with or perform similar services for the Company on
substantially the same terms and conditions and
(b) the Company declines to accept such offer within ten (10) days after
such notice is given.
Section 14. Confidentiality.
Unless the Executive obtains the prior written consent of the Company, the
Executive shall keep confidential and shall refrain from using for the benefit
of the Executive or any person or entity other than the Company, any entity
which is a subsidiary of the Company or any entity which the Company is a
subsidiary of, any material document or information obtained from the Company,
or from its affiliates or subsidiaries, in the course of the Executive's
employment with any of them concerning their properties, operations or business
(unless such document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made available to
the public through no fault of his or her own) until the same ceases to be
material (or becomes so ascertainable or available); provided, however, that
nothing in this Section 14 shall prevent the Executive, with or without the
Company's consent, from participating in or disclosing documents or information
in connection with any judicial or administrative investigation, inquiry or
proceeding to the extent that such participation or disclosure is required under
applicable law.
Section 15. Solicitation.
The Executive hereby covenants and agrees that, for a period of one (1)
year following the Executive's termination of employment with the Company, he or
she shall not, without the written consent of the Company, either directly or
indirectly:
(a) solicit, offer employment to or take any other action intended, or
that a reasonable person acting in like circumstances would expect, to
have the effect of causing any officer or employee of the Company, the
Association or any affiliate or subsidiary of ether of them, to
terminate his or her employment and accept employment or become
affiliated with, or provide services for compensation in any capacity
whatsoever to, any savings bank, savings and loan association, bank,
bank holding company, savings and loan holding company, or other
institution engaged in the business of accepting deposits and making
loans, doing business in any city, town or county in which the
Association or the Company has an office or has filed an application
for regulatory approval to establish an office;
Page 25 of 31
(b) provide any information, advice or recommendation with respect to any
such officer or employee to any savings bank, savings and loan
association, bank, bank holding company, savings and loan holding
company, or other institution engaged in the business of accepting
deposits and making loans, doing business in any city, town or county
in which the Association or the Company has an office or has filed an
application for regulatory approval to establish an office that is
intended, or that a reasonable person acting in like circumstances
would expect, to have the effect of causing any officer or employee of
the Company, the Association, or any affiliate or subsidiary of either
of them, to terminate his or her employment and accept employment,
become affiliated with or provide services for compensation in any
capacity whatsoever to any such savings bank, savings and loan
association, bank, bank holding company, savings and loan holding
company or other institution engaged in the business of accepting
deposits and making loans; or
(c) solicit, provide any information, advice or recommendation or take any
other action intended, or that a reasonable person acting in like
circumstances would expect, to have the effect of causing any customer
of the Company, the Association, or any affiliate or subsidiary of
either of them to terminate an existing business or commercial
relationship with the Company, the Association, or any affiliate or
subsidiary of either of them.
Section 16. No Effect on Employee Benefit Plans or Programs.
The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Company or by the Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Company's qualified or non-qualified retirement, pension, savings, thrift,
profit-sharing or stock bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans or such other employee benefit plans or programs, or
compensation plans or programs, as may be maintained by, or cover employees of,
the Company from time to time.
Section 17. Successors and Assigns.
This Agreement will inure to the benefit of and be binding upon the
Executive, his or her legal representatives and testate or intestate
distributees, and the Company and its successors and assigns, including any
successor by merger or consolidation or a statutory receiver or any other person
or firm or corporation to which all or substantially all of the assets and
business of the Company may be sold or otherwise transferred. Failure of the
Company to obtain from any successor its express written assumption of the
Company's obligations under this Agreement at least sixty (60) days in advance
of the scheduled effective date of any such succession shall be deemed a
material breach of this Agreement.
Page 26 of 31
Section 18. Notices.
Any communication required or permitted to be given under this Agreement,
including any notice, direction, designation, consent, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally, or five (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below or at such other address as one such
party may by written notice specify to the other party:
If to the Executive:
Gary T. McCann
17 Shoreham Road
Massapequa, New York 11758
If to the Company:
Astoria Financial Corporation
One Astoria Federal Plaza
Lake Success, New York 11042-1085
Attention: General Counsel
with a copy to:
Thacher Proffitt & Wood
Two World Financial Center
New York, New York 10281
Attention: W. Edward Bright, Esq.
Section 19. Indemnification for Attorneys' Fees.
The Company shall indemnify, hold harmless and defend the Executive against
reasonable costs, including legal fees, incurred by him or her in connection
with or arising out of any action, suit or proceeding in which he or she may be
involved, as a result of his or her efforts, in good faith, to defend or enforce
the terms of this Agreement; provided, however, that in the case of any action,
suit or proceeding instituted prior to a Change of Control, the Executive shall
have substantially prevailed on the merits pursuant to a judgment, decree or
order of a court of competent jurisdiction or of an arbitrator in an arbitration
proceeding, or in a settlement. For purposes of this Agreement, any settlement
agreement which provides for payment of any amounts in settlement of the
Company's obligations hereunder shall be conclusive evidence of the Executive's
entitlement to
Page 27 of 31
indemnification hereunder, and any such indemnification payments shall be in
addition to amounts payable pursuant to such settlement agreement, unless such
settlement agreement expressly provides otherwise.
Section 20. Severability.
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
Section 21. Waiver.
Failure to insist upon strict compliance with any of the terms, covenants
or conditions hereof shall not be deemed a waiver of such term, covenant, or
condition. A waiver of any provision of this Agreement must be made in writing,
designated as a waiver, and signed by the party against whom its enforcement is
sought. Any waiver or relinquishment of any right or power hereunder at any one
or more times shall not be deemed a waiver or relinquishment of such right or
power at any other time or times.
Section 22. Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
Section 23. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the State of New
York applicable to contracts entered into and to be performed entirely within
the State of New York.
Section 24. Headings and Construction.
The headings of sections in this Agreement are for convenience of reference
only and are not intended to qualify the meaning of any section. Any reference
to a section number shall refer to a section of this Agreement, unless otherwise
stated.
Section 25. Entire Agreement: Modifications.
This instrument contains the entire agreement of the parties relating to
the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.
Page 28 of 31
Section 26. Guarantee.
The Company hereby agrees to guarantee the payment by the Association of
any benefits and compensation to which the Executive is or may be entitled to
under the terms and conditions of the Employment Agreement dated as of the lst
day of December, 2003 between the Association and the Executive.
Section 27. Non-duplication.
In the event that the Executive shall perform services for the Association
or any other affiliate or subsidiary of the Company, any compensation or
benefits provided to the Executive by such other employer shall be applied to
offset the obligations of the Company hereunder, it being intended that this
Agreement set forth the aggregate compensation and benefits payable to the
Executive for all services to the Company and all of its affiliates and
subsidiaries.
Section 28. Survival.
The provisions of any sections of this Agreement which by its terms
contemplates performance after the expiration or termination of this Agreement
(including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17,
18, 19, 21, 26, 27, 29, 30 and 31) shall survive the expiration of the
Employment Period or termination of this Agreement.
Section 29. Equitable Remedies.
The Company and the Executive hereby stipulate that money damages are an
inadequate remedy for violations of Sections 6(a), 13, 14 or 15 of this
Agreement and agree that equitable remedies, including, without limitations, the
remedies of specific performance and injunctive relief, shall be available with
respect to the enforcement of such provisions.
Section 30. Required Regulatory Provisions.
Notwithstanding anything herein contained to the contrary, any payments to
the Executive by the Company, whether pursuant to this Agreement or otherwise,
are subject to and conditioned upon their compliance with Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations
promulgated thereunder.
Section 31. No Offset or Recoupment; No Attachment.
The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations under this Agreement shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company or any of its affiliates or
subsidiaries may have against the Executive. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to
Page 29 of 31
the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment.
Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to affect any such action shall be null, void, and of
no effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Executive has hereunto set his or her hand, all as of the day and year
first above written.
ATTEST: ASTORIA FINANCIAL CORPORATION
/s/ Alan P. Eggleston By: /s/ George L. Engelke, Jr.
- -------------------------------------- -----------------------------------
Alan P. Eggleston Name: George L. Engelke, Jr.
Title: Chairman, President and Chief
Executive Officer
[Seal]
/s/ Gary T. McCann
---------------------------------------
GARY T. MCCANN
Page 30 of 31
STATE OF NEW YORK )
) ss.:
COUNTY OF NASSAU )
On this 1st day of December, 2003, before me, the undersigned, personally
appeared Gary T. McCann, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature(s) on
the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
/s/ Anna Knice
---------------------------------------
Notary Public
Anna Knice
Notary Public, State of New York
NOP. 4980431
Qualified in Suffolk County
Commission Expires April 22, 2007
STATE OF NEW YORK )
) ss.:
COUNTY OF NASSAU )
On this 1st day of December, 2003, before me, the undersigned, personally
appeared George L. Engelke, Jr., personally known to me or proved to me on the
basis of satisfactory evidence to be the individual(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument, the individual(s), or the person upon behalf of
which the individual(s) acted, executed the instrument.
/s/ Anna Knice
-------------------------------------
Notary Public
Anna Knice
Notary Public, State of New York
NOP. 4980431
Qualified in Suffolk County
Commission Expires April 22, 2007
Page 31 of 31