[FORM OF 3 YEAR AGREEMENT]
MAGYAR BANCORP, INC.
EMPLOYMENT AGREEMENT
FOR
ELIZABETH E. HANCE
This Agreement is made effective as of the ____ day of _____________,
2005 by and between Magyar Bancorp, Inc., a Delaware corporation (the
"Company"), with its principal administrative office at 400 Somerset Street, New
Brunswick, New Jersey 08903, and Elizabeth E. Hance ("Executive").
WHEREAS, Executive is currently employed as the President and Chief
Executive Officer of the Company, which owns 100% of the Common Stock of Magyar
Bank, a New Jersey chartered stock savings bank (the "Bank"); and
WHEREAS, in consideration of Executive's outstanding service to the
Company, the Company desires to assure the continued services of Executive
pursuant to the terms of this Agreement; and
WHEREAS, the Company also wishes to provide Executive with certain
protections and benefits in the event of a Change in Control of the Company or
the Bank, as provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, the Company and Executive hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES
During the period of his employment hereunder, Executive agrees to serve
as President and Chief Executive Officer of the Company. During said period,
Executive also agrees to serve, if elected, as an officer and director of any
subsidiary or affiliate of the Company. Failure to reelect Executive as
President and Chief Executive Officer without the consent of 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 no later than December 31, 2006, and
continuing no later than December 31st of each year thereafter (the "Anniversary
Date"), 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 thirty (30) days and
not more than sixty (60) days prior to any such Anniversary Date, that this
Agreement shall terminate 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 Company ("Board") will conduct a
comprehensive performance evaluation and review of 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 Company.
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). In
consideration of the services to be rendered by Executive hereunder, the Company
and/or its subsidiaries shall pay Executive as compensation a salary of not less
than __________________________ ($_______.00) per year ("Base Salary"). Such
Base Salary shall be payable bi-weekly, or in accordance with the Company's
normal payroll practices. 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 December 31 of each year during the term of this Agreement and
shall be effective from the first day of the next calendar year. Such review
shall be conducted by a Committee designated by the Board of Directors of the
Company and the Board of Directors of the Bank (collectively the "Boards"), and
the Boards 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 Company and/or
its subsidiaries shall provide Executive at no cost to Executive with all such
other benefits as are provided uniformly to permanent full-time employees of the
Company and/or its subsidiaries.
(b) The Company and/or its subsidiaries 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
Company and/or its subsidiaries 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 Section 3(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 Company
and/or its subsidiaries 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 Company and/or its subsidiaries 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 Just Cause). Nothing paid to
Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which Executive is entitled under this Agreement.
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(c) In addition to the Base Salary provided for by Section 3(a), the
Company and/or its subsidiaries shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by Executive in
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
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 Company, and the
Company shall reimburse Executive his reasonable expenses associated therewith.
5. WORKING FACILITIES AND EXPENSES
Executive's principal place of employment shall be the Company's
principal executive offices. The Company shall provide 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 Company
and necessary or appropriate in connection with the performance of his duties
under this Agreement. The Company and/or its subsidiaries shall provide
Executive with an automobile suitable to the position of President and Chief
Executive Officer of the Company, and such automobile may be used by Executive
in carrying out his duties under this Agreement and for his personal use such as
commuting between his residence and his principal place of employment. The
Company shall reimburse Executive for the cost of maintenance, use and servicing
of such automobile. The Company shall reimburse 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 Company, and travel and
reasonable entertainment expenses. Reimbursement of such expenses shall be made
upon presentation to the Company of an itemized account of the expenses in such
form as the Company may reasonably require.
6. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(a) The provisions of this Section 6 shall apply upon the occurrence
of an Event of Termination (as herein defined) during 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 Company or the Bank of
Executive's full-time employment hereunder for any
reason other than (A) Disability (as defined in Section
7) or Retirement (as defined in Section 7 below), or (B)
termination for Just Cause (as defined in Section 8
below); or
(ii) Executive's resignation from the Bank's employ, upon any
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(A) failure to elect or reelect or to appoint or
reappoint Executive as President and Chief
Executive Officer,
(B) material change in Executive's functions,
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 Company or the
Bank other than liquidations or dissolutions
that are caused by reorganizations that do not
affect the status of Executive, or
(D) material breach of this Agreement by the
Company.
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 Company,
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 Company and
is engaged in good faith discussions to resolve any occurrence of an event
described in clauses (A), (B), (C) or (D) above.
(iii) The termination of Executive's employment by the
Company, or the Executive's voluntary resignation from
the Company's employ, at any time following a Change in
Control during the term of this Agreement. For these
purposes, a Change in Control of the Company or the Bank
shall mean a change in control of a nature that: (i)
would be required to be reported in response to Item
5.01 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 Bank or the
Company within the meaning of the Bank Holding Company
Act, as amended, and applicable rules and regulations
promulgated thereunder (collectively, the "BHCA") 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 Bank'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
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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 Bank or the Company or similar transaction
in which the Bank or Company is not the surviving
institution occurs or is implemented; or (d) a proxy
statement soliciting proxies from stockholders of the
Company is distributed, by someone other than the
current management of the Company, seeking stockholder
approval of 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 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. Notwithstanding anything
in this subsection to the contrary, a Change in Control
shall not be deemed to have occurred upon the conversion
of the Company's mutual holding company parent to stock
form, or in connection with any reorganization used to
effect such a conversion.
(b) Upon the occurrence of an Event of Termination, as defined in
Section 6(a)(i) or (ii), on the Date of Termination, as defined in Section 9(b),
the Company and/or its subsidiaries 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, an amount equal to
three (3) times Executive's Base Salary. Upon the occurrence of an Event of
Termination, as defined in Section 6(a)(iii), on the Date of Termination, the
Company and/or its subsidiaries 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) Executive's Base Salary and (ii) the highest rate of
bonus awarded to Executive during the prior three years. Payments hereunder
shall be made in a lump sum within thirty (30) days (or if Code Section 409A is
applicable, on the first day of the seventh full month) following Executive's
termination of employment.
(c) Upon the occurrence of an Event of Termination, as defined in
Section 6(a)(i), 6(a)(ii) or 6(a)(iii), the Company will cause to be continued,
at Company's sole expense, life, medical and dental coverage substantially
identical to the coverage maintained by the Company and/or the Bank for
Executive prior to his termination. Such coverage or payment shall continue for
thirty-six (36) months from the Date of Termination.
(d) Notwithstanding the preceding paragraphs of this Section 6, in
no event shall the aggregate payments or benefits to be made or afforded to the
Executive under said paragraphs (the "Termination Benefits") constitute an
"excess parachute payment" under Section 280G of
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the Code or any successor thereto, and in order to avoid such a result,
Termination Benefits will be reduced, if necessary, to an amount (the
"Non-Triggering Amount"), the value of which is one dollar ($1.00) less than an
amount equal to three (3) times the Executive's "base amount", as determined in
accordance with said Section 280G. The allocation of the reduction required
hereby among Termination Benefits provided by the preceding paragraphs of this
Section 6 shall be determined by the Executive.
7. TERMINATION UPON RETIREMENT, DISABILITY OR DEATH
For purposes of this Agreement, termination by the Company of
Executive's employment based on "Retirement" shall mean termination of
Executive's employment by the Company upon attainment of age 65, or such later
date as determined to by the Board of Directors of the Company. Upon termination
of Executive's employment upon Retirement, Executive shall be entitled to all
benefits under any retirement plan of the Company and other plans to which
Executive is a party but shall not be entitled to the Termination Benefits
specified in Section 6(b) through (c) hereof.
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 ("Disability"), the
Company may terminate this Agreement, provided that the Company shall continue
to be obligated to pay 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 Company has provided or may
provide on behalf of its employees or pursuant to any workman's or social
security disability program shall reduce the compensation to be paid to
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 Section 3(a) at
the rate in effect at the time Executive's death for a period of one (1) year
from the date of Executive's death, and the Company will continue to provide
medical and dental coverage for Executive's family for one (1) year after
Executive's death.
8. TERMINATION FOR JUST CAUSE
In the event that employment hereunder is terminated by the Company for
Just Cause, the Executive shall not be entitled to receive compensation or other
benefits for any period after such termination, except as provided by law. The
phrase "Just Cause" as used herein, shall exist when there has been a good faith
determination by the Board that there shall have occurred one or more of the
following events with respect to the Executive: (i) the conviction of the
Executive of a felony or of any lesser criminal offense involving moral
turpitude; (ii) the willful commission by the Executive of a criminal or other
act that, in the judgment of the Board will likely cause substantial economic
damage to the Company or the Bank or substantial injury to the business
reputation of the Company or Bank; (iii) the commission by the Executive of an
act of fraud in the performance of his duties on behalf of the Company or Bank;
(iv) the continuing willful failure of the Executive to perform his duties to
the Company or Bank (other than any such
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failure resulting from the Executive's incapacity due to physical or mental
illness) after written notice thereof (specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard and cure such
failure are given to the Executive by the Board; or (v) an order of a federal or
state regulatory agency or a court of competent jurisdiction requiring the
termination of the Executive's employment by the Company. Notwithstanding the
foregoing, Just Cause shall not be deemed to exist unless there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Board at a meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and an opportunity for the Executive to be
heard before the Board), finding that in the good faith opinion of the Board the
Executive was guilty of conduct described above and specifying the particulars
thereof. Prior to holding a meeting at which the Board is to make a final
determination whether Just Cause exists, if the Board determines in good faith
at a meeting of the Board, by not less than a majority of its entire membership,
that there is probable cause for it to find that the Executive was guilty of
conduct constituting Just Cause as described above, the Board may suspend the
Executive from his duties hereunder for a reasonable period of time not to
exceed fourteen (14) days pending a further meeting at which the Executive shall
be given the opportunity to be heard before the Board. For purposes of this
subparagraph, no act or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith without reasonable believe that his action or omission was in the best
interest of the Company and the Bank. Upon a finding of Just Cause, the Board
shall deliver to the Executive a Notice of Termination, as more fully described
in Section 9 below.
9. NOTICE
(a) Any purported termination by the Company 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 Notice
of Termination (which, except in the case of a termination for Just Cause, shall
not be less than thirty (30) days from the date such Notice of Termination is
given). In the event of termination for Just Cause, termination shall be
immediate upon the receipt of a Notice of Termination.
(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 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
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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, except in the event
of termination for Just Cause, the Bank 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 Bank 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 following Notice of
Termination 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 Section 10(b) 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 Bank as may reasonably be required by the Bank
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) following a Change in
Control), as a result of which the Company is paying Executive benefits under
Section 6 of this Agreement, Executive agrees not to compete with the Bank
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 Bank or any
subsidiary of the Company or within twenty-five (25) miles of any office for
which the Bank, the Company or a Bank 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
activities of the Bank and/or the Company. The parties hereto, recognizing that
irreparable injury will result to the Bank 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 Bank 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 Bank and/or the Company,
and that the
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enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood. Nothing herein will be construed as prohibiting the Bank
and/or the Company from pursuing any other remedies available to the Bank 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 Company and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Company. 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 Company 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 Company 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 Company, and
Executive may disclose any information regarding the Bank or the Company which
is otherwise publicly available. In the event of a breach or threatened breach
by Executive of the provisions of this Section, the Company 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
Company 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 Company from pursuing any other remedies available
to the Company for such breach or threatened breach, including the recovery of
damages from Executive.
12. SOURCE OF PAYMENTS; NO DUPLICATION OF PAYMENTS
(a) All payments provided in this Agreement shall be timely paid in
cash or check from the general funds of 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 Executive from the Bank, such compensation payments and benefits
paid by the Bank will be subtracted from any amount due Executive under this
Agreement. Payments pursuant to this Agreement shall be paid by the Company
and/or the Bank and shall be allocated in proportion to the level of activity
and the time expended on such activities by Executive as determined by the
Company and the Bank on a quarterly basis.
13. NO EFFECT ON EMPLOYEE BENEFITS PLANS OR PROGRAMS
The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Company or by Executive, shall have no
effect on the vested rights of Executive under the Company's or the Bank'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 Executive was a participant.
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14. REQUIRED REGULATORY PROVISIONS
(a) Notwithstanding anything herein contained to the contrary, any
payments to 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.
(b) The Company may terminate the Executive's employment at any time
and for any reason, but any termination by the Company, other than termination
for Just Cause, shall not prejudice Executive's right to compensation or other
benefits under this Agreement.
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 Bank 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. 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 Delaware
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 Company, one of whom
shall be selected by 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 Company, in accordance with the rules of the Judicial
Mediation and Arbitration Systems (JAMS) 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 Company, provided that the dispute or interpretation has
been settled by Executive and the Company or resolved in Executive's favor.
22. INDEMNIFICATION
During the term of this Agreement and for a period of six (6) years
thereafter, the Company 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
Delaware 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 Company
(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 Company). If such action, suit or proceeding is
brought against Executive in his capacity as an officer or director of the
Company, 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 COMPANY
The Company 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 Bank or the Company, expressly
and unconditionally to assume and agree to perform the Company's obligations
under this Agreement, in the same manner and to the same extent that the Company
would be required to perform if no such succession or assignment had taken
place.
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SIGNATURES
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer and Executive has signed this Agreement, on the
day and date first above written.
ATTEST: MAGYAR BANCORP, INC.
________________________________ By:__________________________________
Secretary
WITNESS: EXECUTIVE:
________________________________ By:__________________________________
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