Exhibit 10.3
FORM OF
EMPLOYMENT AGREEMENT
FOR
ATLANTIC LIBERTY SAVINGS, F.A.
This Agreement is made effective as of the ____ day of _____________, 2002
by and between Atlantic Liberty Savings, F.A. (the "Association"), a federally
chartered stock savings association, with its principal administrative office at
186 Montague Street, Brooklyn, New York 11201-3001, and William M. Gilfillan
(the "Executive").
WHEREAS, the Executive is currently employed as the Executive Vice
President, Chief Financial Officer and Corporate Secretary of the Association;
and
WHEREAS, the Association is in the process of converting from the mutual to
the stock form of organization and will concurrently become a wholly-owned
subsidiary of Atlantic Liberty Financial Corp., a Delaware corporation (the
"Company"); and
WHEREAS, concurrently herewith, the Association intends to enter into an
employment agreement with the Executive (the "Company Employment Agreement") on
substantially similar terms as set forth herein; and
WHEREAS, the Association wishes to assure itself of the continued services
of Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to continue to serve in the employ of the
Association on a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES
During the period of his employment hereunder, Executive agrees to serve as
Executive Vice President, Chief Financial Officer and Corporate Secretary of the
Association. During said period, Executive also agrees to serve, if elected, as
an officer and director of any subsidiary or affiliate of the Association.
Failure to reelect Executive as Executive Vice President, Chief Financial
Officer and Corporate Secretary without the consent of the Executive during the
term of this Agreement shall constitute a breach of this Agreement.
2. TERMS AND DUTIES
(a) The period of Executive's employment under this Agreement shall begin
as of the date first above written and shall continue for thirty-six (36) full
calendar months thereafter. Commencing on the first anniversary date of this
Agreement (the "Anniversary Date"), and continuing on each Anniversary Date
thereafter, this Agreement shall renew for an additional year such that the
remaining term shall be three (3) years unless written notice of non-renewal
("Non-Renewal Notice") is provided to Executive at least ten (10) days and not
more than thirty (30) days prior to any such Anniversary Date, that his
employment shall cease at the end of
thirty-six (36) months following such Anniversary Date. Prior to each notice
period for non-renewal, the disinterested members of the Board of Directors of
the Association ("Board") will conduct a comprehensive performance evaluation
and review of the Executive for purposes of determining whether to extend the
Agreement, and the results thereof shall be included in the minutes of the
Board's meeting.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall faithfully perform his duties hereunder
including activities and services related to the organization, operation and
management of the Association.
3. COMPENSATION AND REIMBURSEMENT
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b). The
Association shall pay Executive as compensation a salary of not less than
$___________ per year ("Base Salary"). Such Base Salary shall be payable
bi-weekly. During the period of this Agreement, Executive's Base Salary shall be
reviewed at least annually; the first such review will be made no later than
January 31 of each year during the term of this Agreement and shall be effective
from the first day of said month through the end of the calendar year. Such
review shall be conducted by a Committee designated by the Board, and the Board
may increase, but not decrease, Executive's Base Salary (any increase in Base
Salary shall become the "Base Salary" for purposes of this Agreement). In
addition to the Base Salary provided in this Section 3(a), the Association shall
provide Executive at no cost to Executive with all such other benefits as are
provided uniformly to permanent full-time employees of the Association.
(b) The Association will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Association will not,
without Executive's prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect Executive's rights or
benefits thereunder. Without limiting the generality of the foregoing provisions
of this Subsection (b), Executive will be entitled to participate in or receive
benefits under any employee benefit plans including but not limited to,
retirement plans, supplemental retirement plans, pension plans, profit-sharing
plans, health-and-accident plans, medical coverage or any other employee benefit
plan or arrangement made available by the Association in the future to its
senior executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. Executive will be entitled to incentive compensation and
bonuses as provided in any plan of the Association in which Executive is
eligible to participate (and he shall be entitled to a pro rata distribution
under any incentive compensation or bonus plan as to any year in which a
termination of employment occurs, other than termination for Cause). Nothing
paid to the Executive under any such plan or arrangement will be deemed to be in
lieu of other compensation to which the Executive is entitled under this
Agreement.
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Association shall pay or reimburse Executive for all reasonable
travel and other reasonable
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expenses incurred by Executive performing his obligations under this Agreement
and may provide such additional compensation in such form and such amounts as
the Board may from time to time determine.
4. OUTSIDE ACTIVITIES
The Executive may serve as a member of the board of directors of business,
community and charitable organizations subject to the approval of the Board,
provided that in each case such service shall not materially interfere with the
performance of his duties under this Agreement or present any conflict of
interest. Such service to and participation in outside organizations shall be
presumed for these purposes to be for the benefit of the Association, and the
Association shall reimburse the Executive his reasonable expenses associated
therewith.
5. WORKING FACILITIES AND EXPENSES
The Executive's principal place of employment shall be at the Association's
principal executive offices. The Association shall provide the Executive, at his
principal place of employment, with a private office, stenographic services and
other support services and facilities suitable to his position with the
Association and necessary or appropriate in connection with the performance of
his duties under this Agreement. The Association shall reimburse the Executive
for his ordinary and necessary business expenses incurred in connection with the
performance of his duties under this Agreement, including, without limitation,
fees for memberships in such clubs and organizations that Executive and the
Board mutually agree are necessary and appropriate to further the business of
the Association, and travel and reasonable entertainment expenses. Reimbursement
of such expenses shall be made upon presentation to the Association of an
itemized account of the expenses in such form as the Association may reasonably
require.
6. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
The provisions of this Section shall in all respects be subject to the
terms and conditions stated in Sections 9 and 17.
(a) The provisions of this Section shall apply upon the occurrence of an
Event of Termination (as herein defined) during the Executive's term of
employment under this Agreement. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following:
(i) the termination by the Association or the Company of Executive's
full-time employment hereunder for any reason other than (A) Disability or
Retirement, as defined in Section 7 below, or (B) Termination for Cause as
defined in Section 8 hereof; or
(ii) Executive's resignation from the Association's employ, upon any
(A) failure to elect or reelect or to appoint or reappoint
Executive as Executive Vice President, Chief Financial
Officer and Corporate Secretary,
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(B) material change in Executive's function, duties, or
responsibilities, which change would cause Executive's
position to become one of lesser responsibility, importance,
or scope from the position and attributes thereof described
in Section 1, above,
(C) liquidation or dissolution of the Association or Company
other than liquidations or dissolutions that are caused by
reorganizations that do not affect the status of Executive,
or
(D) breach of this Agreement by the Association.
Upon the occurrence of any event described in clauses (ii) (A), (B), (C)or (D),
above, Executive shall have the right to elect to terminate his employment under
this Agreement by resignation upon sixty (60) days prior written notice given
within a reasonable period of time not to exceed four calendar months after the
initial event giving rise to said right to elect. Notwithstanding the preceding
sentence, in the event of a continuing breach of this Agreement by the
Association, the Executive, after giving due notice within the prescribed time
frame of an initial event specified above, shall not waive any of his rights
solely under this Agreement and this Section by virtue of the fact that
Executive has submitted his resignation but has remained in the employment of
the Association and is engaged in good faith discussions to resolve any
occurrence of an event described in clauses (A), (B), (C) or (D) above.
(iii) Executive's voluntary resignation from the Association's employ on
the effective date of, or at any time following, a Change in Control during the
term of this Agreement. For these purposes, a Change in Control of the
Association or the Company shall mean a change in control of a nature that: (i)
would be required to be reported in response to Item 1(a) of the current report
on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"); or (ii) results in a
Change in Control of the Association or the Company within the meaning of the
Home Owners' Loan Act, as amended, and applicable rules and regulations
promulgated thereunder (collectively, the "HOLA") as in effect at the time of
the Change in Control; or (iii) without limitation such a Change in Control
shall be deemed to have occurred at such time as (a) any "person" (as the term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of Company's outstanding securities, except for any
securities purchased by the Association's employee stock ownership plan or
trust; or (b) individuals who constitute the Board on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
the Company's stockholders was approved by the same Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (b), considered
as though he were a member of the Incumbent Board; or (c) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Association or the Company or similar transaction in which the
Association or Company is not the surviving institution occurs; or (d) a proxy
statement soliciting proxies from stockholders of the Company, by someone other
than the current management of the Company, seeking stockholder approval of
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a plan of reorganization, merger or consolidation of the Company or similar
transaction with one or more corporations as a result of which the outstanding
shares of the class of securities then subject to the plan are to be exchanged
for or converted into cash or property or securities not issued by the Company;
or (e) a tender offer is made for 25% or more of the voting securities of the
Company and the shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares have been accepted
by the tender offeror.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 9(b), the Association shall pay Executive,
or, in the event of his subsequent death, his beneficiary or beneficiaries, or
his estate, as the case may be, as severance pay or liquidated damages, or both,
a sum equal to three (3) times the sum of (i) Base Salary and (ii) the highest
rate of bonus awarded to the Executive during the prior three years. At the
election of the Executive, which election is to be made on an annual basis
during the month of January, and which election is irrevocable for the year in
which made and upon the occurrence of an Event of Termination, any payments
shall be made in a lump sum, or paid bi-weekly during the remaining term of this
Agreement following the Executive's termination. In the event that no election
is made, payment to the Executive will be made on a bi-weekly basis during the
remaining term of this Agreement. Such payments shall not be reduced in the
event the Executive obtains other employment following termination of
employment.
(c) Upon the occurrence of an Event of Termination, the Association will
cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Association for
Executive prior to his termination, or a payment in lieu thereof, of not less
than $12,000 per annum. Such coverage or payment shall continue for thirty-six
(36) months from the Date of Termination.
(d) Within sixty (60) days (or within such shorter period to the extent
that information can be reasonably be obtained) following his termination of
employment with the Association, a lump sum payment in an amount equal to the
excess, if any, of: (A) the present value of the benefits to which he would be
entitled under the Association's defined benefit pension plan (and any other
defined benefit plan maintained by the Association) if he had the additional
years of service that he would have had if he had continued working for the
Association for a thirty-six (36) month period following his termination earning
the salary that would have been paid during the remaining unexpired term of this
Agreement (assuming, if a Change in Control as defined in Section 4(a)(iii) has
occurred, that the annual Base Salary increases under Section 3(a) would apply
and, additionally, that such payment would continue for the remaining unexpired
term of this Agreement), determined as if each such plan had continued in effect
without change in accordance with its terms as of the day prior to his actual
date of his termination and as if such benefits were payable beginning on the
first day of the month coincident with or next following his actual date of his
termination, over (B) the present value of the benefits to which he is actually
entitled under the Association's defined benefit pension plan (and any other
defined benefit plan maintained by the Association) as of the date of his
termination, where such present values are to be determined using a discount
rate of 6% and the mortality tables prescribed under Section 72 of the Internal
Revenue Code of 1986 ("Code");
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(e) Within 60 days (or within such shorter period to the extent that
information can be reasonably be obtained) following his termination of
employment with the Association, a lump sum payment in an amount equal to the
present value of the Association's contributions that would have been made on
his behalf under the Association's 401(k) Plan and employee stock ownership plan
(and any other defined contribution plan maintained by the Association) if he
had continued working for the Association for a thirty-six (36) month period
following his termination earning the Base Salary that would have been achieved
during the remaining unexpired term of this Agreement (assuming, if a Change in
Control has occurred, that the annual Base Salary increases under Section 3(a)
would apply and, additionally, that such payment would continue for the
remaining unexpired term of this Agreement) and making the maximum amount of
employee contributions permitted, if any, under such plan or plans, where such
present values are to be determined using a discount rate of 6%.
(f) If the Association gives Executive a Non-Renewal Notice, or if the
Association does not extend the Agreement at least sixty (60) days prior to the
Anniversary Date, as described in Section 2(a) of the Agreement, Executive may
resign from employment of the Association at any time after such event. In such
case, the Association shall pay to the Executive the severance benefits
described in subsections (b) through (e) of this Section 6.
(g) Notwithstanding the preceding paragraphs of this Section, in the event
that:
(i) the aggregate payments or benefits to be made or afforded to
Executive under said paragraphs (the "Termination Benefits") would be
deemed to include an "excess parachute payment" under Section 280G of the
Code or any successor thereto, and
(ii) if such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is one dollar ($1.00) less
than an amount equal to the total amount of payments permissible under
Section 280G of the Code or any successor thereto,
then the Termination Benefits to be paid to Executive shall be so reduced so as
to be a Non-Triggering Amount.
7. TERMINATION UPON RETIREMENT, DISABILITY OR DEATH
For purposes of this Agreement, termination by the Association of the
Executive based on "Retirement" shall mean termination upon attainment of age
65, or such later age as consented to by the Board. Upon termination of
Executive upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Association and other plans to which Executive is a
party.
In the event Executive is unable to perform his duties under this
Agreement on a full-time basis for a period of six (6) consecutive months by
reason of illness or other physical or mental disability, the Association may
terminate this Agreement, provided that the Association shall continue to be
obligated to pay the Executive his Base Salary for the remaining term of the
Agreement, or one year, whichever is the longer period of time, and provided
further that any amounts actually paid to Executive pursuant to any disability
insurance or other similar such program which the Association has provided or
may provide on behalf of its employees or
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pursuant to any workman's or social security disability program shall reduce the
compensation to be paid to the Executive pursuant to this paragraph.
In the event of Executive's death during the term of the Agreement, his
estate, legal representatives or named beneficiaries (as directed by Executive
in writing) shall be paid Executive's Base Salary as defined in Paragraph 3(a)
at the rate in effect at the time Executive's death for a period of one (1) year
from the date of the Executive's death, and the Association will continue to
provide medical, dental, family and other benefits normally provided for an
Executive's family for one (1) year after the Executive's death.
8. TERMINATION FOR CAUSE
The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than minor
traffic violations or similar offenses) or final cease-and-desist order, or
material breach of any provision of this Agreement. In determining incompetence,
the acts or omissions shall be measured against standards generally prevailing
in the savings institutions industry. For purposes of this paragraph, no act or
failure to act on the part of Executive shall be considered "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's action or omission was in the best
interest of the Association. Notwithstanding the foregoing, Executive shall not
be deemed to have been Terminated for Cause unless and until there shall have
been delivered to him a copy of a resolution duly adopted by the affirmative
vote of not less than three-fourths of the members of the Board at a meeting of
the Board called and held for that purpose (after reasonable notice to Executive
and an opportunity for him, together with counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, Executive was
guilty of conduct justifying Termination for Cause and specifying the
particulars thereof in detail. Executive shall not have the right to receive
compensation or other benefits for any period after Termination for Cause. Any
stock options granted to Executive under any stock option plan of the
Association, the Company or any subsidiary or affiliate thereof, shall become
null and void effective upon Executive's receipt of Notice of Termination for
Cause pursuant to Section 9 hereof, and shall not be exercisable by Executive at
any time subsequent to such Termination for Cause.
9. NOTICE
(a) Any purported termination by the Association or by Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(b) "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the
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Notice of Termination (which, in the case of a Termination for Cause, shall not
be less than thirty (30) days from the date such Notice of Termination is
given).
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the voluntary termination
by the Executive in which case the Date of Termination shall be the date
specified in the Notice, the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award, or by a final judgment, order or decree
of a court of competent jurisdiction (the time for appeal having expired and no
appeal having been perfected) and provided further that the Date of Termination
shall be extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such dispute
with reasonable diligence. Notwithstanding the pendency of any such dispute, the
Association will continue to pay Executive his full compensation in effect when
the notice giving rise to the dispute was given (including, but not limited to,
Base Salary) and continue Executive as a participant in all compensation,
benefit and insurance plans in which he was participating when the notice of
dispute was given, until the dispute is finally resolved in accordance with this
Agreement, provided such dispute is resolved within the term of this Agreement.
If such dispute is not resolved within the term of the Agreement, the
Association shall not be obligated, upon final resolution of such dispute, to
pay Executive compensation and other payments accruing beyond the term of the
Agreement. Amounts paid under this Section shall be offset against or reduce any
other amounts due under this Agreement.
10. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section during the
term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Association as may reasonably be required by the Association
in connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.
11. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder, other than a
termination, (whether voluntary or involuntary) in connection with a Change in
Control, as a result of which the Association is paying Executive benefits under
Section 6 of this Agreement, Executive agrees not to compete with the
Association and/or the Company for a period of one (1) year following such
termination within twenty-five (25) miles of any existing branch of the
Association or any subsidiary of the Company or within twenty-five (25) miles of
any office for which the Association, the Company or a Association subsidiary of
the Company has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said area, cities, towns and counties,
Executive shall not work for or advise, consult or otherwise serve with,
directly or indirectly, any entity whose business materially competes with the
depository, lending or other business
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activities of the Association and/or the Company. The parties hereto,
recognizing that irreparable injury will result to the Association and/or the
Company, its business and property in the event of Executive's breach of this
Subsection 11(a) agree that in the event of any such breach by Executive, the
Association and/or the Company will be entitled, in addition to any other
remedies and damages available, to an injunction to restrain the violation
hereof by Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive represents and
admits that Executive's experience and capabilities are such that Executive can
obtain employment in a business engaged in other lines and/or of a different
nature than the Association and/or the Company, and that the enforcement of a
remedy by way of injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the Association
and/or the Company from pursuing any other remedies available to the Association
and/or the Company for such breach or threatened breach, including the recovery
of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Association and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Association. Executive will not, during
or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Association or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever (except for such disclosure as may be required to
be provided to any federal banking agency with jurisdiction over the Association
or Executive). Notwithstanding the foregoing, Executive may disclose any
knowledge of banking, financial and/or economic principles, concepts or ideas
which are not solely and exclusively derived from the business plans and
activities of the Association, and Executive may disclose any information
regarding the Association or the Company which is otherwise publicly available.
In the event of a breach or threatened breach by the Executive of the provisions
of this Section, the Association will be entitled to an injunction restraining
Executive from disclosing, in whole or in part, the knowledge of the past,
present, planned or considered business activities of the Association or
affiliates thereof, or from rendering any services to any person, firm,
corporation, other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed. Nothing herein will be construed as
prohibiting the Association from pursuing any other remedies available to the
Association for such breach or threatened breach, including the recovery of
damages from Executive.
12. SOURCE OF PAYMENTS
(a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Company, however,
guarantees payment and provision of all amounts and benefits due hereunder to
Executive and, if such amounts and benefits due from the Association are not
timely paid or provided by the Association, such amounts and benefits shall be
paid or provided by the Company.
(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by the Executive under the Company Employment Agreement, such
compensation payments and benefits paid the Company will be subtracted from any
amounts due simultaneously to the Executive under similar
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provisions of this Agreement. Payments pursuant to this Agreement and the
Company Employment Agreement shall be allocated in proportion to the level of
activity and the time expended on such activities by the Executive as determined
by the Company and the Association on a quarterly basis.
13. NO EFFECT EMPLOYEE BENEFITS 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 vested rights of the executive under the Company's or the
Association'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 other employee benefit plans or programs, or
compensation plans or programs in which the Executive was a participant.
14. REQUIRED REGULATORY PROVISIONS
(a) The Association may terminate the Executive's employment at any time.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 8 hereinabove.
(b) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) (12 USC ss.1818(e)(3)) or 8(g) (12 USC ss.1818(g))
of the Federal Deposit Insurance Act, as amended by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, the Association's obligations
under this contract shall be suspended as of the date of service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the
Association may in its discretion (i) pay the Executive all or part of the
compensation withheld while their contract obligations were suspended and (ii)
reinstate (in whole or in part) any of the obligations which were suspended.
(c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order issued
under Section 8(e) (12 USC ss.1818(e)) or 8(g) (12 USC ss.1818(g)) of the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all obligations of the Association under
this contract shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Association is in default as defined in Section 3(x) (12 USC
ss.1813(x)(1)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Association under this contract shall terminate as of the date of default,
but this paragraph shall not affect any vested rights of the contracting
parties.
(e) All obligations of the Association under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Association, (i) by the Federal
Deposit Insurance Corporation ("FDIC"), at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Association under the
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authority contained in Section 13(c) (12 USC ss.1823(c)) of the Federal Deposit
Insurance Act, as amended by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989; or (ii) when the Association is determined by the FDIC
to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(f) 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 the
regulations promulgated thereunder in 12 C.F.R. Part 359.
15. NO ATTACHMENT
(a) 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.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Association and their respective successors and assigns.
16. ENTIRE AGREEMENT; MODIFICATION AND WAIVER
(a) This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supercedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof, except that the parties acknowledge that this Agreement shall not impact
any of the rights and obligations of the parties to the Company Employment
Agreement or any of the agreements or plans referenced in the Company Employment
Agreement except as set forth in Section 12(b) hereof. No modifications of this
Agreement shall be valid unless made in writing and signed by the parties
hereto.
(b) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(c) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
17. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
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18. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
19. GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York but
only to the extent not superseded by federal law.
20. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators, one of whom shall be selected by the Association, one of
whom shall be selected by the Executive and the third of whom shall be selected
by the other two arbitrators. The panel shall sit in a location within fifty
(50) miles from the location of the Association, in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrators award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
21. PAYMENT OF LEGAL FEES
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Association, provided that the dispute or interpretation
has been settled by Executive and the Association or resolved in the Executive's
favor.
22. INDEMNIFICATION
During the term of this Agreement and for a period of six (6) years
thereafter, the Association shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors and
officers liability insurance policy at its expense, and shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under federal law against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Association (whether or not he continues to be a director or
officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys fees and the cost of reasonable settlements (such settlements must be
approved by the Board of Directors of the Association). If such action, suit or
proceeding is brought against Executive in his capacity as an officer or
director of the Association, however, such indemnification shall not extend to
matters as to which Executive is finally adjudged to be liable for willful
misconduct in the performance of his duties.
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23. SUCCESSOR TO THE ASSOCIATION
The Association shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Company,
expressly and unconditionally to assume and agree to perform the Association's
obligations under this Agreement, in the same manner and to the same extent that
the Association would be required to perform if no such succession or assignment
had taken place.
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SIGNATURES
IN WITNESS WHEREOF, the Association and the Company have caused this
Agreement to be executed and their seals to be affixed hereunto by their duly
authorized officers, and Executive has signed this Agreement, on the day and
date first above written.
ATTEST: ATLANTIC LIBERTY SAVINGS, F.A.
By:
____________________ --------------------------------
ATTEST: ATLANTIC LIBERTY FINANCIAL CORP.
____________________
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WITNESS: EXECUTIVE:
____________________
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William M. Gilfillan
Executive Vice President, Chief
Financial Officer and Corporate
Secretary