EXHIBIT 10.7
FIRST SAVINGS BANK, F.S.B.
CLOVIS, NEW MEXICO
EMPLOYMENT AGREEMENT
AGREEMENT, made this 22nd day of November, 1995, by and between First
Savings Bank, F.S.B. (BANK), a federally chartered stock savings bank and
Xxxxxx X. Xxxxxxx (Officer).
The Officer is an employee of the BANK and has been duly elected.
The BANK desires to provide for the employment of the Officer in order to
reinforce and encourage his continued attention and dedication to the growth
and success of the BANK as a member of the BANK's management;
The Officer desires to serve the BANK on the terms and conditions
contained in this Agreement;
THEREFORE, in consideration of the premises and respective agreements
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. EMPLOYMENT. The BANK agrees to employ and the Officer agrees to serve
the BANK on the terms and conditions set forth in this Agreement.
2. TERM. The term of this Agreement shall commence on or before January 1,
1996 and shall continue for a period of two years through JANUARY 1, 1998,
subject to the terms and conditions herein set forth. As required by Thrift
Regulatory Bulletin No. 27a (#RB 27a) the Board of Directors of the BANK must
review and approve any renewals or extensions of this contract and if
required the Board must obtain prior regulatory approval for any renewals or
extensions hereof.
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3. POSITION AND RESPONSIBILITIES. It is intended that at all times during
the term of this Agreement the Officer shall serve as Vice President and
Strategic Planning Officer. The Officer shall devote time and attention to
the business and affairs of the BANK (excluding periods of vacation,
sickness, and permitted leaves of absence as provided for in the BANK's
personnel policies).
(a) MAJOR DUTIES AND RESPONSIBILITIES. The Officer will provide
leadership and direction in obtaining additional capital for the BANK,
coordinate the BANK's strategic planning activities, and guide the BANK's
investment activities to ensure the short-term and long-term profitability
and liquidity of the BANK:
(i) Coordinate and guide the BANK's efforts to raise additional capital
by working with current stockholders and/or potential investors; and
(ii) Coordinate the efforts of the BANK's investment activities through
guidance and direction of the investment portfolio, interest rate risk
management, and net interest margin management; and
(iii) Contribute to the effective, profitable operation of the BANK by
participating in asset management, executive, investment, stockholder, and
marketing activities; and
(iv) Represent the BANK and provide leadership in key community
activities, including business, charitable, civic, and social organizations
to maintain a proper responsible citizen stature for the BANK.
4. COMPENSATION. During the period of the Officer's employment, the BANK
shall provide said Officer with the following compensation and other benefits:
(a) SALARY. The BANK shall pay to the Officer a salary at a rate not
less than $90,000.00 per annum, payable in accordance with the standard
payroll practices of the BANK. This salary may be increased from time to time
by the Board of Directors of the BANK (with regulatory approval when
required), taking into account, among other things, individual performance
and general business conditions.
(b) INCENTIVE/BONUS COMPENSATION. The Officer shall be eligible to
participate in Board-approved incentive or bonus compensation plans.
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(c) EMPLOYEE BENEFITS. The Officer shall be eligible to participate in
all benefit programs of the BANK, including but not limited to profit
sharing/employee stock ownership, 401K plan, group life insurance, group
health insurance, sick leave, salary continuation, disability, vacation, and
holidays.
(d) PERQUISITES AND BUSINESS EXPENSES. The Officer shall be entitled to
prompt reimbursement of all reasonable expenses incurred by said Officer in
performing services hereunder and is to be provided additional perquisites
customary for the BANK. The BANK shall provide a late model automobile for
use by the Officer during the term of this Agreement.
(e) STOCK OPTION PLAN. Subject to the approval of this Agreement by the
Office of Thrift Supervision (OTS), the Board of Directors shall cause the
BANK to grant under its stock option plan (First Savings Bank, F.S.B., 1986
Stock Option and Incentive Plan) 17,000 shares of BANK common stock to the
Officer effective July 18, 1995. The option may be exercisable during this
Agreement and any extension thereof at the fair market price of the common
stock at the date of the grant, unless an earlier expiration date is
indicated by the stock option plan.
(f) 12 USC 1828(k) COMPLIANCE. Any payments made to the Officer pursuant
to this agreement, or otherwise, are subject to, and conditioned upon, their
compliance with 12 USC 1828(k) and any regulations promulgated thereunder.
5. TERMINATION.
The following events shall constitute grounds for termination:
(a) DISABILITY OR DEATH. If, as a result of the Officer's incapacity due
to physical or mental illness, the Officer shall have been absent from his
duties hereunder on a full-time basis for 150 consecutive days, then the BANK
shall be entitled to deliver written notice of termination to the Officer,
and if, within 30 days after any such written notice of termination is given,
the Officer shall not have returned to the performance of his duties
hereunder on a full-time basis, the BANK may terminate the Officer's
employment hereunder. Upon the death of the Officer, the BANK shall continue
to pay the Officer's estate the Base salary for a period of 180 days
following the Officer's death, following which the obligations of the BANK
hereunder shall terminate. Termination hereunder shall not affect the
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Officer's entitlement to any vested benefits of the Officer hereunder or
under any plan or arrangement contemplated by Section 4 above.
(b) CAUSE. The BANK may terminate the Officer's employment at any time,
but any termination by the BANK other than termination for cause, shall not
prejudice the Officer's right to receive compensation or other benefits under
this Agreement. The Officer shall have no right to receive compensation or
other benefits for any period after termination for cause. Termination for
cause shall include termination because of the Officer's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of
any law, rule, or regulation (other than traffic violations or similar
offenses) or final cease-and desist order, or material breach of any
provision of this Agreement.
If the Officer is suspended and/or temporarily prohibited from
participation in the conduct of the BANK's affairs by a notice served under
section 8(e)(3) or (g)(1) of [the] Federal Deposit Insurance Act (12 U.S.C.
1818(e)(3) and (g)(1)) the BANK's obligations under this Agreement shall be
suspended as of the date of service unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the BANK may, at its discretion,
(i) pay the Officer all or part of the compensation withheld while its
Contract (Agreement) obligations were suspended and (ii) reinstate (in whole
or in part) any of its obligations which were suspended.
If the Officer is removed and/or permanently prohibited from participating
in the conduct in the BANK's affairs by an order issued under section 8(e)(4)
or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) or
(g)(1)), all obligations of the BANK under this Agreement shall terminate as
of the effective date of the order, but vested rights of the contracting
parties shall not be affected.
The BANK shall exercise its right to terminate the Officer's employment
for Cause by giving him a prompt written notice of termination specifying in
reasonable detail the circumstances constituting such Cause and specifying
such date of termination as the BANK shall determine.
In the event of a termination for Cause, the BANK shall have no further
liability for payments (other than previously accrued and unpaid
compensation) under section 4 of this Agreement.
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(c) DEFAULT. If the BANK is in default (as defined in section 3(x)(1) of
the Federal Deposit Insurance Act), all obligations under this Agreement shall
terminate as of the date of default, but this paragraph shall not affect any
vested rights of the contracting parties.
Further, all obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is
necessary [for] the continued operation of the BANK[:]
(i) by the Director of the Office of Thrift Supervision or his or her
designee, at the time of the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide assistance
to or on behalf of the BANK under the authority contained in section 13(c) of
the Federal Deposit Insurance Act; or
(ii) by the Director of the Office of Thrift Supervision or his or her
designee, at the time the Director or his or her designee approves a
supervisory merger to resolve problems related to operation of the BANK or
when the BANK is determined by the Director to be in an unsafe or unsound
condition.
(d) OTHER. The BANK may terminate the Officer's employment for reasons
other than for cause. In such circumstances, the BANK shall pay to said
Officer salary and employee benefits for the remainder of the term of the
Agreement, unless otherwise prohibited herein.
(e) TOTAL COMPENSATION. The total compensation to the Officer upon
departure, for any reason, will not exceed three times the Officer's average
annual compensation, based on the five most recent taxable years. In the case
of termination for cause, however, no payments will be made.
6. Other Miscellaneous Covenants.
(a) TAX WITHHOLDING. The BANK shall have the right to deduct from any
payment required to be made to the Officer or said Officer's estate or
beneficiaries, any federal, state, or local taxes of any kind required by law
to be withheld with respect to such payments.
(b) NOTICES. Any notice hereunder to the BANK shall be addressed to
Chairman of the Board of Directors, X.X. Xxxxxx 0000, Xxxxxx, Xxx Xxxxxx
00000-0000. Any notice to the Officer shall be directed to said Officer at
Officer's last known address contained in the BANK'S files. Either party may
designate an address at any time hereafter in writing.
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(c) ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement and
understanding of the parties with respect to the subject matter herein and is
subject to prior approval (no objection) by the Office of Thrift Supervision
(OTS).
(d) SUCCESSORS; ASSIGNS. Except as herein expressly provided, the
respective rights and obligations of the Officer and the BANK under this
Agreement shall not be assigned by either party without the written consent
of the other party but shall inure to the benefit of, and be binding upon,
the parties or its permitted successors or assigns. With respect to the BANK,
successors shall include any other corporation or entity with which the BANK
may be merged or otherwise combined or which may acquire all or substantially
all of the business (ownership) of the BANK. With respect to the Officer,
successors shall include Officer's estate, beneficiaries, or other legal
representatives. Nothing herein expressed or implied is intended to confer on
any person other than the parties hereto any rights, remedies, obligations,
or liabilities under or by reason of this Agreement.
(e) AMENDMENT; WAIVER. No provision of this Agreement may be amended or
waived without written authorization of both the Board of Directors and the
Officer.
(f) SEVERABILITY. In the event that any provision of this Agreement shall
be determined to be invalid or unenforceable, the remaining provisions of the
Agreement shall remain in full force and effect.
(g) GOVERNING LAW. This Agreement shall be deemed a Contract under, and
for all purposes shall be construed with, the laws of the State of New Mexico.
(h) ARBITRATION. Any dispute or disagreement arising under this Agreement
shall be settled by arbitration conducted by a member of the American
Arbitration Association in accordance with the rules of said association.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The expense of such arbitration shall be borne by the BANK if
the Officer receives a judgment in said Officer's favor against the BANK.
(i) INVESTMENTS. Nothing contained in this contract shall prevent the
Officer from investing or trading stocks, bonds, securities, real estate, or
other forms of investment for said Officer's own benefit (directly or
indirectly), provided such investments do not significantly interfere or
conflict with Officer's services to be rendered hereunder.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day,
month, and year first written above.
FIRST SAVINGS BANK, F.S.B.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx "Xxxx" Xxxxxx, Chairman
Board of Directors
OFFICER
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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