Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (“Agreement”) is made as of this 23 day of June, 2016 (the
“Effective Date”), between MALVERN BANCORP, INC., a Pennsylvania business
corporation (the “Corporation”), MALVERN FEDERAL SAVINGS BANK, a federally
chartered stock savings bank (the “Bank”), and ANTHONY C. WEAGLEY, an adult
individual (“Executive”).

 

WITNESSETH:

 

WHEREAS, the Corporation, the Bank, and Executive desire to amend and restate
the terms of an Employment Agreement by and between the parties dated as of May
15, 2015, with the terms of this Agreement which shall following the Effective
Date govern and control the terms of the Executive’s employment with the
Corporation and the Bank.

 

AGREEMENT

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:

 

1. Employment. The Corporation and the Bank each hereby employs Executive and
Executive hereby accepts employment with the Corporation and the Bank, on the
terms and conditions set forth in this Agreement.

 

2. Duties of Employee. Executive shall serve as Chief Executive Officer and
President of the Corporation and the Bank, reporting directly and exclusively to
the Board of Directors of the Corporation (the “Board”) and the Bank (the “Bank
Board”), respectively, and shall have such powers and duties as may from time to
time be reasonably prescribed by the Board and the Bank Board, provided such
powers and duties are consistent with Executive’s position as a senior executive
officer (chief executive officer) of the Corporation and the Bank. Executive
shall be appointed to the Board and the Bank Board as a Director. Executive
shall devote his full time, attention and energies to the business of the
Corporation and the Bank during the Employment Period (as defined in Section 3
of this Agreement); provided, however, that this Section 2 shall not be
construed as preventing Executive from (a) engaging in activities incident or
necessary to personal investments, (b) acting as a member of the board of
directors of any non-profit association or corporation, or (c) being involved in
any other business activity with the prior approval of the Board and the Bank
Board. Executive's activities in connection with the farming of real estate in
which the Executive or the Executive's family have an interest shall be deemed
to be activities engaged in by the Executive with the prior approval of the
Board and the Bank Board, provided such activities do not interfere with
Executive’s duties hereunder. Executive shall not engage in any business or
commercial activities, duties or pursuits which compete with the business or
commercial activities of the Corporation or the Bank, nor may Executive serve as
a director or officer or in any other capacity in a company which competes with
the Corporation or the Bank.

 

 

 

 

3. Term of Agreement.

 

(a) Employment Period. This Agreement shall be for a period (the “Employment
Period”) beginning on the Effective Date, and if not previously terminated
pursuant to the terms of this Agreement, ending on the date that is one (1) year
subsequent thereto; provided, however, that on the first and each subsequent
annual anniversary date of this Agreement, and unless a party has given the
other party written notice at least sixty (60) days prior to such anniversary
date that such party does not agree to renew this Agreement (a “Non-renewal
Notice”), the term of this Agreement and the Employment Period shall be deemed
renewed for a term ending one (1) year subsequent to such anniversary date (each
such one (1) year term of employment under this Agreement being a “Contract
Year”).

 

(b) Notwithstanding anything herein contained to the contrary, nothing in this
Agreement shall mandate or prohibit a continuation of Executive’s employment
following the expiration of the term of this Agreement upon such terms as the
Board and Executive may mutually agree.

 

(c) Termination for Cause. Notwithstanding the provisions of Section 3(a) of
this Agreement, this Agreement may be terminated by the Corporation or the Bank
for Cause (as defined herein). As used in this Agreement, “Cause” shall mean any
of the following:

 

(i) Executive willfully fails or refuses to substantially perform the
Executive’s responsibilities under this Agreement (provided that such
responsibilities are consistent with the Executive’s duties as defined in
Section 2 of this Agreement, above), after written demand for substantial
performance has been given by the Board that specifically identifies how the
Executive has failed to perform such responsibilities;

 

(ii) Executive engages in gross misconduct which is materially and demonstrably
injurious to the Corporation or the Bank;

 

(iii) Executive is convicted of a felony or pleads guilty or nolo contendere to
a felony;

 

(iv) Executive materially breaches Section 7 of this Agreement;

 

(v) Executive engages in any act of fraud (including misappropriation of the
Corporation’s or the Bank’s funds or property) in connection with the business
of the Corporation or Bank which is materially and demonstrably injurious to the
Corporation or the Bank; or

 

(vi) Executive is disqualified or barred by any governmental or self-regulatory
authority from serving in the capacity contemplated by this Agreement.

 

 -2- 

 

 

The termination of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than 66% of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described above, and specifying
the particulars thereof in detail. For purposes of this Agreement, no act or
omission on the part of the Executive shall be considered “willful” unless it is
done or omitted in bad faith or without reasonable belief that the act or
omission was in the best interests of the Corporation or the Bank. Any act or
omission based upon a resolution duly adopted by the Board or upon advice of
counsel for the Corporation or the Bank shall be conclusively presumed to have
been done or omitted in good faith and in the best interests of the Corporation
and the Bank.

 

If this Agreement is terminated for Cause, all of Executive’s rights under this
Agreement shall cease as of the effective date of such termination, except that:

 

(i) the Bank shall pay to Executive the unpaid portion, if any, of his Annual
Base Salary and any accrued but unused vacation and personal days through the
date of termination; and

 

(ii) the Bank shall provide to Executive such post-employment benefits, if any,
as may be provided for under the terms of the employee benefit plans of the Bank
then in effect, provided that the cost to the Bank of such post-employment
benefits shall not exceed an amount equal to one year of Executive’s Annual Base
Salary.

 

(d) Death. Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement shall terminate automatically upon Executive’s death and
Executive’s rights under this Agreement shall cease as of the date of such
termination, except that (i) the Bank shall pay to Executive’s spouse, personal
representative, or estate the unpaid portion, if any, of his Annual Base Salary
through date of death and (ii) the Bank shall provide to Executive’s dependents
any benefits due under the Bank’s employee benefit plans.

 

(e) Disability. Executive, the Corporation and the Bank agree that if Executive
becomes Disabled, within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and the regulations thereunder, and
becomes eligible for employer-provided short-term and/or long-term disability
benefits, or worker’s compensation benefits, then the Bank’s obligation to pay
Executive his Annual Base Salary shall be reduced by the amount of the
disability or worker’s compensation benefits received by Executive.

 

Executive, the Corporation, and the Bank agree that if, in the judgment of the
Board, Executive is unable, as a result of illness or injury, to perform the
essential functions of his position on a full-time basis with or without a
reasonable accommodation and without posing a direct threat to himself or others
for a period of six months, the Corporation and the Bank will suffer an undue
hardship in continuing Executive’s employment as set forth in this Agreement.
Accordingly, this Agreement shall terminate at the end of the six-month period,
and all of Executive’s rights under this Agreement shall cease, with the
exception of those rights which Executive may have under the Bank’s employee
benefit plans.

 

 -3- 

 

 

(f) Resignation from Board of Directors. In the event Executive’s employment
under this Agreement is terminated for any reason, if applicable, Executive’s
service as a Director of the Corporation, the Bank, and any affiliate or
subsidiary thereof shall immediately terminate. This Section 3(f) shall
constitute a resignation notice for such purposes.

 

4. Employment Period Compensation, Benefits and Expenses.

 

(a) Annual Base Salary. For services performed by Executive under this
Agreement, the Bank shall pay Executive an annual base salary during the
Employment Period at the rate of $400,000 per year, to be first effective as of
January 1, 2016, minus applicable withholdings and deductions, payable at the
same times as salaries are payable to other executive employees of the Bank.
Executive is also entitled to an additional annual base compensation of
$100,000, which shall be divided as follows: i) $35,000 of such additional
annual base compensation shall be paid in cash pursuant to the Bank’s regular
payroll process; and ii) the remaining $65,000 of such additional annual base
compensation shall be paid in the form of common stock of the Corporation which
shall be provided in accordance with the Bank’s and the Corporation’s plans,
policies and procedures for compensating employees with the Corporation’s stock.
The annual base salary, at the initial rate of $400,000, and the additional
annual base compensation, in the initial amount of $100,000 (paid as described
above), are collectively referred to herein as the “Annual Base Salary”. Annual
Base Salary (including for the avoidance of doubt the annual additional
compensation) shall be reviewed annually by the Board or the Bank Board and
either may, from time to time, increase Executive’s Annual Base Salary, and any
and all such increases shall be deemed to constitute amendments to this Section
4(a) to reflect the increased amounts, effective as of the date established for
such increases. In reviewing adjustments to Annual Base Salary, the Board or the
Bank Board shall consider relevant market data regarding executive salaries at
peer financial institutions and the performance of the Corporation and the Bank
under Executive’s leadership.

 

(b) Bonus. The Board and the Bank Board shall provide for participation in a
short-term performance plan (the “Short-Term Performance Plan”) which shall
provide for the payment of an annual bonus to Executive at a target level of
$100,000, or a greater amount determined by the Board’s Compensation Committee
(the “Compensation Committee”) in its sole discretion, upon meeting agreed-upon
performance goals. Executive’s participation in such Short-Term Performance Plan
shall be conditioned upon the submission of performance goals (“Short-Term
Performance Goals”) for the year by the Executive to the Compensation Committee
for approval no later than the 15th day of the first month of the fiscal year to
which the goals relate; provided, however, that the initial goals under this
Agreement shall be submitted by the Executive to the Compensation Committee
within 30-days after the Effective Date. The Compensation Committee shall review
the Short-Term Performance Goals and, after agreeing to the goals based on
discussions with the Executive, shall seek approval of the same from the full
Board at the next regular meeting of the Board. If such approval is obtained
from the Board, the Compensation Committee shall confirm the approval in writing
to the Executive. The payment of any such bonuses will not reduce or otherwise
affect any other obligation of the Bank to Executive provided for in this
Agreement.

 

(c) Vacations, Holidays, Etc. During the term of this Agreement, Executive shall
be entitled to be paid annual vacation in accordance with the policies as
established from time to time by the Bank Board. Executive shall also be
entitled to all paid holidays, sick days and personal days provided by the Bank
to its regular full-time employees and senior executive officers. At minimum,
Executive shall be entitled to twenty (25) days of paid vacation per Contract
Year and seven (7) days of combined paid sick leave and personal leave.
Executive shall not be permitted to roll over vacation days or personal or sick
leave days if not used in any year, except that Executive may roll over up to
five (5) unused vacation days for any Contract Year to be used within the first
three (3) months of the immediately following Contract Year.

 

 -4- 

 

 

(d) Employee Benefit Plans. During the term of this Agreement, Executive shall
be entitled to participate in or receive the benefits of any employee benefit
plan currently in effect at the Bank, subject to the eligibility and terms of
each such plan, until such time that the Bank Board authorizes a change in such
benefits. Corporation and Bank shall not make any changes in such plans or
benefits which would adversely affect Executive’s rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all executive
officers of Corporation and Bank and does not result in a proportionately
greater adverse change in the rights of or benefits to Executive as compared
with any other executive officer of Corporation and Bank. Nothing paid to
Executive under any plan or arrangement presently in effect or made available in
the future shall be deemed to be in lieu of the salary payable to Executive
pursuant to Section 4(a) hereof.

 

(e) Perquisites and Business Expenses. During the term of this Agreement,
Executive shall be entitled to receive customary and normal perquisites provides
to other senior executive officers of the Bank which shall include a car
allowance of $900 per month and be reimbursed for the full cost of his smart
phone and data plan. During the term of this Agreement, Executive shall be
entitled to receive prompt reimbursement for all customary and usual expenses
incurred by him, which are properly accounted for, in accordance with the
policies and procedures established by the Corporation or the Bank in accordance
with industry practice for its senior executive officers. Specifically,
Executive shall be entitled to receive prompt reimbursement for up to $10,000 of
actual costs (which are properly accounted for) associated with securing
hotel/short-term lodging in the Malvern, PA area annually.

 

5. Rights in Event of Termination of Employment after a Change in Control.

 

(a) In the event that Executive’s employment is involuntarily terminated by the
Corporation or the Bank without Cause (other than for death or
Disability) during the term of this Agreement or if the Corporation or the Bank
terminate this Agreement pursuant to a Non-Renewal Notice, either occurring
after a Change in Control, or if Executive’s employment is voluntarily
terminated by Executive for Good Reason after a Change in Control (defined in
Section 5(d) below), Executive shall be entitled to receive the compensation set
forth below:

 

(i) Executive shall be paid, within twenty (20) days following termination,

 

(A) the Executive shall be entitled to receive any amount already earned by or
owing to the Executive pursuant to the terms of this Agreement as of the date of
termination (including any unpaid annual bonus owed to the Executive for a
previous calendar year) and any benefits accrued and due in accordance with the
terms of any applicable benefit plans and programs of the Company;

 

 -5- 

 

 

(B) a lump sum cash payment equal to two (2) years of Executive’s Annual Base
Salary (subject to federal, state and local tax withholdings);

 

(ii) Any vesting restrictions in connection with grants of equity shall be
waived and such equity shall be owned outright by the Executive.

 

(iii) Executive shall not be required to mitigate the amount of any payment
provided for in this Section 5 by seeking other employment or otherwise, nor
shall the amount of payment or the benefit provided for in this Section 5 be
reduced by any compensation earned by Executive as the result of employment by
another employer or by reason of Executive’s receipt of or right to receive any
retirement or other benefits after the date of termination of employment or
otherwise.

 

(b) As used in this Agreement, “Change in Control” of the Corporation shall
mean:

 

(i) (A) a merger, consolidation or division involving Corporation or Bank, (B) a
sale, exchange, transfer or other disposition of substantially all of the assets
of Corporation or Bank, or (C) a purchase by Corporation or Bank of
substantially all of the assets of another entity, unless (y) such merger,
consolidation, division, sale, exchange, transfer, purchase or disposition is
approved in advance by seventy-five percent (75%) or more of the members of the
Board of Directors of Corporation or Bank who are not interested in the
transaction and (z) a majority of the members of the Board of Directors of the
legal entity resulting from or existing after any such transaction and the Board
of Directors of such entity’s parent corporation, if any, are former members of
the Board of Directors of Corporation or Bank; or

 

(ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”)), other than Corporation or
Bank or any “person” who on the date hereof is a director or officer of
Corporation or Bank, is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
Corporation or Bank representing twenty-five percent (25%) or more of the
combined voting power of Corporation or Bank’s then outstanding securities;

 

(iii) during the period of two (2) consecutive years during the term of
Executive’s employment under this Agreement, individuals who at the beginning of
such period constitute the Board of Directors of Corporation or Bank cease for
any reason to constitute at least a majority thereof, unless the election of
each director who was not a director at the beginning of such period has been
approved in advance by directors representing at least sixty-seven percent
(67%) of the directors then in office who were directors at the beginning of the
period; or

 

(iv) any other transaction involving the Corporation or Bank similar in effect
to any of the foregoing and designated as a Change in Control by the Board.

 

(c) As used in this Agreement, the term “Good Reason” shall mean (i) a material
diminution in salary, (ii) a material diminution in authority, duties or
responsibilities, (iii) a change in Executive's title, (iv) change in
Executive's reporting line so that the Executive no longer reports directly and
exclusively to the Board and the Bank Board, (v) removal of Executive from his
positions as a director on either the Board or the Bank Board, or (vi) a
reassignment which assigns full-time employment duties to Executive at a
location more than fifty (50) miles from the Corporation’s principal executive
office on the date of this Agreement, in all cases after notice from Executive
to the Corporation within ninety (90) days after the initial existence of any
such condition that the condition constitutes Good Reason and the failure of the
Corporation or the Bank to cure such situation within thirty (30) days after
said notice.

 

 -6- 

 

 

(d) In the event Executive becomes entitled to any of the payments set forth in
this Section 5, he shall not be entitled to any of the payments set forth in
Section 6. Fifty percent (50%) of any payments made under this Section 5 shall
be made by the Corporation and fifty percent (50%) of any payments made under
this Section 5 shall be made by the Bank.

 

6. Rights in Event of Termination of Employment Absent Change in Control.

 

(a) If Executive’s employment is involuntarily terminated by the Corporation or
the Bank without Cause (other than for death or Disability) or if the
Corporation or the Bank terminate this Agreement pursuant to a Non-Renewal
Notice, either occurring absent a Change in Control, or if Executive’s
employment is voluntarily terminated by Executive for Good Reason absent a
Change in Control, Executive shall be entitled to receive the compensation set
forth below:

 

(i) Executive shall be paid, within twenty (20) days following termination, a
lump sum cash payment equal to two (2) years of Executive’s Annual Base Salary.
The amount shall be subject to federal, state and local tax withholdings.

 

(b) Executive shall not be required to mitigate the amount of any payment
provided for in this Section 6 by seeking other employment or otherwise, nor
shall the amount of payment or the benefit provided for in this Section 6 be
reduced by any compensation earned by Executive as the result of employment by
another employer or by reason of Executive’s receipt of or right to receive any
retirement or other benefits after the date of termination of employment or
otherwise.

 

(c) In the event Executive becomes entitled to any of the payments set forth in
this Section 6, he shall not be entitled to any of the payments and benefits set
forth in Section 5. Fifty percent (50%) of any payments made under this Section
6 shall be made by the Corporation and fifty percent (50%) of such payments
shall be made by the Bank.

 

7. Covenant Not to Compete.

 

(a) Executive hereby acknowledges and recognizes the highly competitive nature
of the business of the Corporation and the Bank and accordingly agrees that,
during and for the applicable period set forth in Section 7(c) hereof, Executive
shall not:

 

(i) enter into or be engaged (other than by the Corporation or the Bank),
directly or indirectly, either for his own account or as agent, consultant,
employee, partner, officer, director, proprietor, investor (except as an
investor owning less than 5% of the stock of a publicly owned company) or
otherwise of any person, firm, corporation or enterprise engaged in (A) the
banking (including bank holding company) or financial services industry, or
(B) any other activity in which Corporation or the Bank or any of their
subsidiaries are engaged during the Employment Period, in the following Counties
in the Commonwealth of Pennsylvania and in any County contiguous thereto in the
Commonwealth of Pennsylvania: Bucks, Chester, Delaware and Montgomery
(“Non-Competition Area”); or

 

 -7- 

 

 

(ii) solicit, directly or indirectly, any “person” (as such term is defined
under Section 3 of the Employee Retirement Income Security Act of 1974, as
amended) who is, or was during the then most recent 12-month period, a customer
of the Corporation or the Bank or any of their respective subsidiaries to divert
their business from the Corporation and/or the Bank; or

 

(iii) solicit, directly or indirectly, any person who is, or was during the then
most recent 12-month period, employed by the Corporation or the Bank or any of
their respective subsidiaries to leave the employ of the Corporation or the
Bank. Within ten (10) days following any written request from Executive
following any termination of this Agreement, the Corporation or the Bank shall
provide to Executive a written list of the names and addresses of the persons
who Executive is barred from soliciting under this paragraph.

 

Notwithstanding the foregoing, Executive shall not be prohibited from making
personal investments, loans or real estate transactions comparable to such
transactions which would have been permitted during Executive’s employment with
the Corporation or Bank.

 

(b) It is expressly understood and agreed that, although the parties consider
the restrictions contained in Section 7(a) hereof reasonable for the purpose of
preserving for the Corporation, the Bank and their subsidiaries their good will
and other proprietary rights, if a final judicial determination is made by a
court having jurisdiction that the time or territory or any other restriction
contained in this Section 7(a) hereof is an unreasonable or otherwise
unenforceable restriction against Executive, the provisions of
Section 7(a) hereof shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such other extent as such
court may judicially determine or indicate to be reasonable.

 

(c) The provisions of this Section 7 shall be applicable commencing on the date
of this Agreement and continuing for twelve (12) months after the effective date
of the termination of Executive’s employment. Notwithstanding the above
provisions, if Executive violates the provisions of this Section 7 and the
Corporation or the Bank must seek enforcement of the provisions of Section 7 and
is successful in enforcing the provisions, either pursuant to a settlement
agreement, or pursuant to court order, the covenant not to compete will remain
in effect for one full year following the date of the settlement agreement or
court order.

 

(d) Executive acknowledges that the terms and conditions of Section 7 are
reasonable and necessary to protect the Corporation and the Bank, their
subsidiaries, and affiliates, and that Corporation and the Bank’s tender of
performance under this Agreement, including the payment of the amounts and
benefits under Section 5 or 6, is fair, adequate and valid consideration in
exchange for his promises under this Section 7 of this Agreement.

 

(e) Executive hereby agrees that the provisions of this Section 7 are fully
assignable by the Corporation and the Bank to any successor. Executive also
acknowledges that the terms and conditions of this Section 7 will not be
affected by the circumstances surrounding his termination of employment, absent
a breach of this Agreement by Corporation.

 

 -8- 

 

 

(f) Executive acknowledges and agrees that any breach of the restrictions set
forth in this Section 7 will result in irreparable injury to the Corporation and
the Bank for which it shall have no meaningful remedy at law, and the
Corporation and the Bank shall be entitled to injunctive relief in order to
enforce the provisions hereof.

 

8. Unauthorized Disclosure. During the term of his employment hereunder, or at
any later time, Executive shall not, without the written consent of the Board
and the Bank Board or a person authorized thereby (except as may be required
pursuant to a subpoena or other legal process), knowingly disclose to any
person, other than an employee of the Corporation and the Bank or a person to
whom disclosure is reasonably necessary or appropriate in connection with the
performance by Executive of his duties as an executive of the Corporation and
the Bank, any material confidential information obtained by him while in the
employ of the Corporation and the Bank with respect to any of the Corporation’s
and the Bank’s or any of their subsidiaries’ services, products, improvements,
formulas, designs or styles, processes, customers, methods of business or any
business practices the disclosure of which could be or will be damaging to the
Corporation and the Bank; provided, however, that confidential information shall
not include any information known generally to the public (other than as a
result of unauthorized disclosure by Executive or any person with the
assistance, consent or direction of Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Corporation and the Bank or any
information that must be disclosed as required by law.

 

9. Requirement of Release; Cessation and Recovery on Competition.
Notwithstanding anything herein to the contrary, Executive’s entitlement to any
payments under Sections 5 and 6 shall be contingent upon Executive’s prior
agreement with and signature to a complete release agreement in the form as
mutually agreed by the parties. Such release agreement shall be executed, if at
all, and the applicable payments and benefits contingent upon the execution of
such agreement shall be provided or commence being provided, if at all, within
sixty (60) days following the date of termination; provided, however, that if
such sixty (60) day period begins in one taxable year and ends in a second
taxable year, the payments and benefits will be provided or commence being
provided, if at all, in the second taxable year. The form of such release
agreement is attached hereto as Exhibit A and incorporated herein by reference.

 

10. Indemnification; Liability Insurance. The Corporation and the Bank shall
indemnify Executive, to the fullest extent permitted by applicable law, with
respect to any threatened, pending or contemplated action, suit or proceeding
brought against him by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation and the Bank or is or was serving at the
written request of the Corporation as a director, officer, employee or agent of
another person or entity. Executive’s right to indemnification provided herein
is not exclusive of any other rights to which Executive may be entitled under
any bylaw, agreement, vote of shareholders or otherwise, and shall continue
beyond the term of this Agreement.

 

11. Notices. Except as otherwise provided in this Agreement, any notice required
or permitted to be given under this Agreement shall be deemed properly given if
in writing and if mailed by registered or certified U.S. mail, postage prepaid
with return receipt requested, and by regular U.S. mail, postage prepaid, to
Executive’s address, in the case of notices to Executive, and to the principal
executive office of the Corporation, in the case of notice to the Corporation or
the Bank.

 

 -9- 

 

 

12. Waiver. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed
by Executive and an executive officer specifically designated by the Board. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

 

13. Assignment. This Agreement shall not be assignable by any party, except by
the Bank and the Corporation to any successor in interest to its business.

 

14. Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter of this Agreement and supersedes and
replaces any prior written or oral agreements between them respecting the within
subject matter, including, but not limited to the terms of an Employment
Agreement by and between the parties dated as of May 15, 2015.

 

15. Successors; Binding Agreement.

 

(a) The Corporation and the Bank will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Corporation and/or the
Bank to expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Corporation and the Bank would be required to
perform it if no such succession had taken place. As used in this Agreement,
“Corporation” and “Bank” shall mean the Corporation and the Bank as defined
previously and any successor to its respective business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law
or otherwise.

 

(b) This Agreement shall inure to the benefit of and be enforceable by
Executive’s personal or legal representatives, executors, administrators, heirs,
distributees, devisees or legatees. If Executive should die following
termination of Executive’s employment without Cause, and any amounts would be
payable to Executive under this Agreement if Executive had continued to live,
all such amounts shall be paid in accordance with the terms of this Agreement to
Executive’s devisee, legatee, or other designee, or, if there is no such
designee, to Executive’s estate.

 

16. Legal Expenses; Indemnification.

 

(a) In the event that a party to this Agreement is required to commence
litigation to obtain or enforce any right or benefit of such party under this
Agreement, such party shall be entitled to reimbursement from the other party
for fees and costs reasonably incurred by such party in such litigation to the
extent that such party is the prevailing party in such litigation.

 

(b) The Bank shall indemnify Executive against payment of any claims arising out
of or in connection with any business of the Bank or the Corporation, and
against payment of any costs reasonably incurred by Executive in defending
against any such claims, to the fullest extent permitted by law and by the
articles of incorporation and bylaws of the Corporation and the Bank.

 

 -10- 

 

 

17. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

 

18. Applicable Law. This Agreement shall be governed by and construed in
accordance with the domestic, internal laws of the Commonwealth of Pennsylvania,
without regard to its conflicts of laws principles.

 

19. Headings. The section headings of this Agreement are for convenience only
and shall not control or affect the meaning or construction or limit the scope
or intent of any of the provisions of this Agreement.

 

20. Limitations on Payments.

 

(a) Notwithstanding anything in this Agreement to the contrary, in the event the
payments and benefits payable hereunder to or on behalf of Executive (which the
parties agree will not include any portion of payments allocated to the
non-compete provisions of Section 7 which are classified as payments of
reasonable compensation for purposes of Section 280G of the Code), when added to
all other amounts and benefits payable to or on behalf of Executive, would
result in the imposition of an excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), the amounts and benefits payable
hereunder shall be reduced to such extent as may be necessary to avoid such
imposition. All calculations required to be made under this subsection will be
made by the Corporation’s independent public accountants, subject to the right
of Executive’s representative to review the same. The parties recognize that the
actual implementation of the provisions of this subsection are complex and agree
to deal with each other in good faith to resolve any questions or disagreements
arising hereunder.

 

(b) All payments made to the Executive pursuant to this Agreement or otherwise,
are subject to and conditioned upon their compliance with applicable laws and
any regulations promulgated thereunder.

 

21. Recovery of Bonuses and Incentive Compensation. Notwithstanding anything in
this Agreement to the contrary, all bonuses and incentive compensation, but not
Annual Base Salary or payments due Executive under Section 5 or Section 6, paid
hereunder (whether in equity or in cash) shall be subject to recovery by the
Corporation or the Bank in the event that such bonuses or incentive compensation
are based on materially inaccurate financial statements or other materially
inaccurate performance metric criteria; provided that a determination as to the
recovery of a bonus or incentive compensation shall be made within twenty-four
(24) months following the date such bonus or incentive compensation was paid. In
the event that the Board or the Bank Board determines that a bonus or incentive
compensation payment to Executive is recoverable, Executive shall reimburse all
or a portion of such bonus or incentive compensation, to the fullest extent
permitted by law, as soon as practicable following written notice to Executive
by the Corporation or the Bank of the same.

 

 -11- 

 

 

22. Application of Code Section 409A.

 

(a) Notwithstanding anything in this Agreement to the contrary, the receipt of
any benefits under this Agreement as a result of a termination of employment
shall be subject to satisfaction of the condition precedent that Executive
undergo a “separation from service” within the meaning of Treas. Reg.
§ 1.409A-1(h) or any successor thereto. In addition, if Executive is deemed to
be a “specified employee” within the meaning of that term under Code
Section 409A(a)(2)(B), then with regard to any payment or the provisions of any
benefit that is required to be delayed pursuant to Code Section 409A(a)(2)(B),
such payment or benefit shall not be made or provided prior to the earlier of
(i) the expiration of the six (6) month period measured from the date of
Executive’s “separation from service” (as such term is defined in Treas. Reg.
§ 1.409A-1(h)), or (ii) the date of Executive’s death (the “Delay Period”).
Within ten (10) days following the expiration of the Delay Period, all payments
and benefits delayed pursuant to this Section (whether they would have otherwise
been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to Executive in a lump sum, and any remaining
payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein.
Notwithstanding the foregoing, to the extent that the foregoing applies to the
provision of any ongoing welfare benefits to Executive that would not be
required to be delayed if the premiums therefore were paid by Executive,
Executive shall pay the full costs of premiums for such welfare benefits during
the Delay Period and the Bank shall pay Executive an amount equal to the amount
of such premiums paid by Executive during the Delay Period within ten (10) days
after the conclusion of such Delay Period.

 

(b) Except as otherwise expressly provided herein, to the extent any expense
reimbursement or other in-kind benefit is determined to be subject to Code
Section 409A, the amount of any such expenses eligible for reimbursement or
in-kind benefits in one calendar year shall not affect the expenses eligible for
reimbursement or in-kind benefits in any other taxable year (except under any
lifetime limit applicable to expenses for medical care), in no event shall any
expenses be reimbursed or in-kind benefits be provided after the last day of the
calendar year following the calendar year in which Executive incurred such
expenses or received such benefits, and in no event shall any right to
reimbursement or in-kind benefits be subject to liquidation or exchange for
another benefit.

 

(c) Any payments made pursuant to Sections 5 and 6, to the extent of payments
made from the date of termination through March 15th of the calendar year
following such date, are intended to constitute separate payments for purposes
of Treas. Reg. §1.409A-2(b)(2) and thus payable pursuant to the “short-term
deferral” rule set forth in Treas. Reg. §1.409A-1(b)(4); to the extent such
payments are made following said March 15th, they are intended to constitute
separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) made upon an
involuntary termination from service and payable pursuant to Treas. Reg.
§1.409A-1(b)(9)(iii), to the maximum extent permitted by said provision.

 

(d) To the extent it is determined that any benefits described in
Sections 3(c-1)(ii), 5(a)(i) and 6(a)(i) are taxable to Executive, they are
intended to be payable pursuant to Treas. Reg. §1.409A-1(b)(9)(v), to the
maximum extent permitted by said provision.

 

 -12- 

 

 

23. Limitation on Golden Parachute Payments. Notwithstanding anything in this
Agreement to the contrary, the obligation to make payment of any severance
benefits as provided herein (including, without limitation, any payments due
Executive under Section 5 or Section 6, and, to the extent incurred after
termination, legal fees and expenses covered by Section 16) is conditioned upon
(i) the Corporation and the Bank obtaining any necessary approvals from each of
their primary regulators (including, where applicable, FDIC concurrence), and
(ii) compliance with applicable law, including 12 C.F.R. Part 359. The
Corporation and the Bank covenant and agree to diligently pursue the regulatory
approvals described in the prior sentence. In addition, Executive covenants and
agrees that the Corporation and the Bank and their successors and assigns shall
have the right to demand the return of any “golden parachute payments” (as
defined in 12 C.F.R. Part 359) in the event that any of them obtain information
indicating that Executive committed, is substantially responsible for, or has
violated, the respective acts or omissions, conditions, or offenses contained in
12 C.F.R. §359.4(a)(4), and Executive shall promptly return any such “golden
parachute payment” upon such demand. The Corporation and the Bank represent that
the execution and delivery of this Agreement by the Corporation and the Bank
have been approved by the applicable bank regulatory agencies as required by
applicable law, including 12 C.F.R. Part 359.

 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

 -13- 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

 

ATTEST:   MALVERN BANCORP, INC.       /s/ Joseph Gangemi   By: /s/ Howard Kent
Secretary   Howard Kent, Chairman of the Board       ATTEST:   MALVERN FEDERAL
SAVINGS BANK       /s/ Joseph Gangemi   By: /s/ Howard Kent Secretary   Howard
Kent, Chairman of the Board       WITNESS:   ANTHONY C. WEAGLEY       /s/ Joseph
Gangemi   /s/ Anthony C. Weagley

 

 -14- 

 

 

EXHIBIT A

 

RELEASE AGREEMENT

 

THIS RELEASE AGREEMENT (this “Release Agreement”) is made as of this __ day of
______, 20__, by and between MALVERN BANCORP, INC., a Pennsylvania business
corporation (the “Corporation”), MALVERN FEDERAL SAVINGS BANK, a federally
chartered stock savings bank (the “Bank”), and ANTHONY C. WEAGLEY, an adult
individual (“Executive”). Capitalized terms not defined in this Release
Agreement shall have the meanings ascribed to them under the agreement between
the Employer and the Executive, dated June __, 2016, (the “Employment
Agreement”). In consideration of the mutual agreements set forth below and
intending to be legally bound, the Executive and the Employer hereby agree as
follows:

 

1. General Release.

 

a. In consideration of the payments and benefits required to be provided to the
Executive under the Employment Agreement other than the Executive’s accrued but
unpaid base compensation and any accrued but unpaid or otherwise vested benefits
under any benefit or incentive plan determined at the time of the Executive’s
termination of employment (such payments and benefits, the “Post-Termination
Payments”) and after consultation with counsel, the Executive, for himself and
on behalf of each of the Executive’s heirs, executors, administrators,
representatives, agents, successors and assigns (collectively, the “Releasors”),
hereby irrevocably and unconditionally releases and forever discharges the
Employer and its affiliated companies, and each of its officers, employees,
directors, shareholders, and agents (collectively, the “Releasees”) from any and
all claims (including claims for attorney’s fees), actions, causes of action,
rights, judgments, obligations, damages, demands, accountings, or liabilities of
whatever kind or character (collectively, “Claims”), including, without
limitation, any Claims under any federal, state, local, or foreign law, that the
Releasors may have, or in the future may possess, arising out of (i) the
Executive’s employment relationship with and service as an employee, officer, or
director of the Employer and any of its affiliates, or the termination of the
Executive’s service in any and all of such relevant capacities or (ii) the
Employment Agreement; provided, however, that the release set forth in this
Section shall not apply to (x) the payment and/or benefit obligations of the
Employer or any of its affiliates, (collectively, the “Employer Group”) under
the Employment Agreement, (y) any Claims the Executive may have under any plans
or programs not covered by the Employment Agreement in which the Executive
participated and under which the Executive has accrued and become entitled to a
benefit, and (z) any indemnification or other rights the Executive may have
under the Employment Agreement or in accordance with the governing instruments
of any member of the Employer Group or under any director and officer liability
insurance maintained by the Employer or any such group member with respect to
liabilities arising as a result of the Executive’s service as an officer and
employee of any member of the Employer Group or any predecessor thereof. Except
as provided in the immediately preceding sentence, the Releasors further agree
that the Post-Termination Payments shall be in full satisfaction of any and all
Claims for payments or benefits, whether express or implied, that the Releasors
may have against the Employer or any member of the Employer Group arising out of
the Executive’s employment relationship under the Employment Agreement and the
Executive’s service as an employee, officer or director of the Employer or a
member of the Employer Group under the Employment Agreement or the termination
thereof, as applicable.

 

 -15- 

 

 

2. Specific Release of Claims. In further consideration of the Post-Termination
Payments, the Releasors hereby unconditionally release and forever discharge the
Releasees from any and all Claims that the Releasors may have in connection with
the Executive’s employment or termination of employment, arising under:

 

a. Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act (“ADEA”), the Americans With Disabilities Act of 1990 (“ADA”),
the Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993
(“FMLA”), the Genetic Information Non-Discrimination Act of 2008 (“GINA”) and
any similar federal, state or local laws, including without limitation, the
Pennsylvania Human Relations Act, as amended and any other non-discrimination
and fair employment practices laws of any state and/or locality in which the
Executive works or resides, all as amended; and

 

b. the Fair Credit Reporting Act (“FCRA”), the Employee Retirement Income
Security Act of 1974 (“ERISA”), the Worker Adjustment and Retraining
Notification Act (“WARN”).

 

Notwithstanding anything contained herein to the contrary, no portion of any
release contained in any Section of this Release Agreement shall release the
Employer or the Employer Group from any Claims the Executive may have for breach
of the provisions of this Release Agreement or to enforce this Release
Agreement, that arise after the date of this Release Agreement, or to challenge
the validity of the Executive’s release of ADEA Claims.

 

By signing this Release Agreement, the Executive hereby acknowledges and
confirms the following: (i) the Executive was advised by the Employer or his
then employer in connection with his termination of employment or retirement to
consult with an attorney of his choice prior to signing this Release Agreement
and to have such attorney explain to the Executive the terms of this Release
Agreement, including, without limitation, the terms relating to the Executive’s
release of Claims arising under this Section, and the Executive has in fact
consulted with an attorney; (ii) the Executive was given a period of not fewer
than 21 days to consider the terms of this Release Agreement prior to its
signing; and (iii) the Executive knowingly and voluntarily accepts the terms of
this Release Agreement.

 

3. No Assignment of Claims. The Executive represents and warrants that he has
not assigned any of the Claims being released hereunder.

 

4. Complaints. The Executive affirms that he has not filed any complaint against
any Releasee with any local, state or federal court and agrees not to do so in
the future, except for Claims challenging the validity of the release of ADEA
Claims. The Executive affirms further that he has not filed any claim, charge or
complaint with the United States Equal Employment Opportunity Commission
(“EEOC”) or any state or local agency authorized to investigate charges or
complaints of unlawful employment discrimination (together, “Agency”). The
Executive understands that nothing in this Release Agreement prevents him from
filing a charge or complaint of unlawful employment discrimination with any
Agency or assisting in or cooperating with an investigation of a charge or
complaint of unlawful employment discrimination by an Agency, provided however
that, the Executive acknowledges that he may not be able to recover any monetary
benefits in connection with any such claim, charge, complaint or proceeding and
disclaim entitlement to any such relief. Furthermore, if any Agency or court has
now assumed or later assumes jurisdiction of any claim, charge or complaint on
the Executive’s behalf against any Releasee, the Executive will disclaim
entitlement to any relief.

 

 -16- 

 

 

5. Revocation. This Release Agreement may be revoked by the Executive within the
seven-day period commencing on the date the Executive signs this Release
Agreement (the “Revocation Period”). In the event of any such revocation by the
Executive, all obligations of the parties under this Release Agreement shall
terminate and be of no further force and effect as of the date of such
revocation. No such revocation by the Executive shall be effective unless it is
in writing and signed by the Executive and received by the Employer prior to the
expiration of the Revocation Period. In the event of revocation, the Executive
shall not be entitled to the Post-Termination Payments, the receipt of which is
conditioned on the Executive’s execution of this Release Agreement.

 

6. Cooperation. The Executive agrees to cooperate with the Employer’s reasonable
requests with respect to all matters arising during or related to his employment
about which he has personal knowledge because of his employment with the
Employer, including but not limited to all matters (formal or informal) in
connection with any government investigation, internal Employer investigation,
litigation (potential or ongoing), administrative, regulatory, or other
proceeding which currently exists, or which may have arisen prior to or arise
following the signing of this Release Agreement. Employer agrees to provide the
Executive with reasonable advance notice of such requests and to accommodate
Executive’s schedule. The Executive understands that the Employer agrees to
reimburse Executive for his reasonable out-of-pocket expenses (not including
attorney’s fees, legal costs, or lost time or opportunity) incurred in
connection with such cooperation.

 

7. No Admission of Liability. The Executive agrees that this Release Agreement
does not constitute, nor should it be construed to constitute, an admission by
the Employer of any violation of federal, state, or local law, regulation, or
ordinance, nor as an admission of liability under the common law or for any
breach of duty the Employer owed or owes to the Executive.

 

8. Representations and Warranties. The Executive acknowledges and agrees that,
except as disclosed on a disclosure schedule to be provided at the time of
execution of this Release Agreement, (i) he is not aware of nor has he reported
any conduct by any of the Releasees that violates any federal, state, or local
law, rule, or regulation, (ii) he has not been denied any rights or benefits
under the Family and Medical Leave Act of 1993 (“FMLA”) or any state or local
law, act, or regulation providing for family and/or medical leave or been
discriminated against in any way for exercising his rights under these laws, and
(iii) in connection with offering the Post-Termination Payments, the Employer
has not provided to the Executive, and has no obligation to provide to the
Executive, any material non-public information as defined in applicable federal
securities laws, concerning the Employer.

 

 -17- 

 

 

9. Confidentiality. The Executive agrees to maintain as confidential, the terms
and contents of this Release Agreement, and the contents of the negotiations and
discussions resulting in this Release Agreement, except (i) as needed to obtain
legal counsel, financial, or tax advice, (ii) to the extent required by federal,
state, or local law or by order of court (iii) as needed to challenge the
release of ADEA Claims or to participate in an Agency investigation, or (iv) as
otherwise agreed to in writing by an officer of the Employer. The Executive
agrees that before he seeks legal counsel or financial or tax advice, he will
secure an agreement from such counsel or advisors to adhere to the same
confidentiality obligations that apply to him. The Executive agrees not to
discuss either the existence of or any aspect of this Release Agreement with any
employee or ex-employee of the Employer.

 

10. Successors. This Release Agreement is for the benefit of and is binding upon
the Executive and his heirs, administrators, representatives, executors,
successors, beneficiaries and assigns, and is also for the benefit of the
Releasees and their successors and assigns.

 

11. Violation. If the Executive violates Sections 1 or 2 of this Release
Agreement, the Employer will be entitled to the immediate repayment of the
Post-Termination Payments. The Executive agrees that repayment will not
invalidate this Release Agreement and acknowledges that he will be deemed
conclusively to be bound by the terms of this Release Agreement and to waive any
right to seek to overturn or avoid it. If the Executive violates Sections 1 or 2
of this Release Agreement before all of the Post-Termination Payments have been
provided, the Employer may discontinue any unpaid conditional payments and
benefits.

 

12. Additional Damages Available for Violation. The Executive agrees that the
Employer will maintain all rights and remedies available to it at law and in
equity in the event the Executive violates any provision of this Release
Agreement. These rights and remedies may include, but may not be limited to, the
right to bring court action to recover all consideration paid to the Executive
pursuant to this Release Agreement and any damages the Employer may suffer as a
result of such a breach.

 

13. Entire Agreement and Amendment. This Release Agreement, together with the
Employment Agreement as it may be amended from time to time, contains and
constitutes the entire understanding and agreement between the parties hereto
with respect to the Executive’s severance benefits and waiver and release of
Claims against the Employer Group and cancels all previous oral and written
negotiations, agreements, commitments and writings in connection therewith. This
Release Agreement shall be binding upon the parties and may not be modified in
any manner, except by an instrument in writing of concurrent or subsequent date
signed by a duly authorized representative of the parties and their respective
agents, assign, heirs, executors, successors, and administrators. No delay or
omission by the Employer in exercising any right under this Release Agreement
shall operate as a waiver of that or any other right. A waiver or consent given
by the Employer on any one occasion shall be effective only in that instance and
shall not be construed as a bar or waiver of any right on any other occasion.

 

14. Applicable Law. This Release Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
choice of law principles, and except as preempted by federal law. Should any
provision of this Release Agreement be declared or be determined by any court of
competent jurisdiction to be illegal or invalid, the validity of the remaining
parts, terms or provisions shall not be affected thereby and the illegal or
invalid part, term, or provision will be deemed not to be a part of this Release
Agreement.

 

 -18- 

 

 

15. Assignment. The Executive’s rights and obligations under this Release
Agreement shall inure to the Executive’s benefit and shall bind the Executive,
his heirs, administrators, representatives, executors, successors, beneficiaries
and assigns. The Employer’s rights and obligations under this Release Agreement
shall inure to the benefit of and shall bind the Employer, its successors and
assigns. The Executive may not assign this Release Agreement. The Employer may
assign this Release Agreement, but it may not delegate the duty to make any
payments hereunder without the Executive’s written consent, which shall not be
unreasonably withheld.

 

16. Severability. If any provision of this Release Agreement is held
unenforceable by a court of competent jurisdiction, all remaining provisions
shall continue in full force and effect without being impaired or invalidated in
any way.

 

17. Notices. Any notice required to be provided to the Executive hereunder shall
be given to the Executive in writing by certified mail, return receipt
requested, or by Federal Express, addressed to the Executive at the address of
record with the Employer, or at such other place as the Executive may from
time-to-time designate in writing. Any notice which the Executive is required to
give to the Employer hereunder shall be given in writing by certified mail,
return receipt requested, or by Federal Express, addressed to the Senior Human
Resources Officer at its principal office. The dates of mailing any such notice
shall be deemed to be the date of delivery thereof.

 

The Executive is hereby advised that the Executive has up to twenty-one
(21) calendar days to review this Release Agreement and that the Executive
should consult with an attorney of the Executive’s choice prior to execution of
this Release Agreement.

 

The Executive agrees that any modifications, material or otherwise, made to this
Release Agreement do not restart or affect in any manner the original twenty-one
(21) calendar day consideration.

 

Statement by the Executive who is signing below. By signing this Release
Agreement, I acknowledge that the Employer has advised and encouraged me to
consult with an attorney prior to executing this Release Agreement. I have
carefully read and fully understand the provisions of this Release Agreement and
have had sufficient time and opportunity (over a period of 21 days) to consult
with my personal tax, financial and legal advisors prior to executing this
Release Agreement, and I intend to be legally bound by its terms.

 

 -19- 

 

 

IN WITNESS WHEREOF, the parties, intending to be legally bound have executed
this Release Agreement on the day and year first above written.

 

ATTEST:   MALVERN BANCORP, INC.           By:   Secretary           ATTEST:  
MALVERN FEDERAL SAVINGS BANK           By:   Secretary           WITNESS:  
ANTHONY C.  WEAGLEY            

 

 -20-