Contract
Exhibit
10.3
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT, dated this 14th day of
December
2007, between First Federal Bancshares of Arkansas, Inc., a Texas chartered
corporation (the "Corporation"), First Federal Bank, a federally chartered
savings bank and a wholly owned subsidiary of the Corporation (the "Bank"),
and
Xxxxxx X. Xxxxxxxx (the "Executive").
WHEREAS,
the Executive is currently
employed as the Executive Vice President and Chief Financial Officer of the
Corporation and the Bank, and the Corporation, the Bank and the Executive
have
previously entered into an employment agreement dated April 25, 2002 (the
“Prior
Agreement”);
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(i)
any
material breach of this Agreement by the Employers, including without limitation
any of the following: (A) a material diminution in the Executive’s base
compensation, (B) a material diminution in the Executive’s authority, duties or
responsibilities as prescribed in Section 2, or (C) a material diminution
in the
authority, duties or responsibilities of the officer to whom the Executive
is
required to report; or
(ii)
any
material change in the geographic location at which the Executive must perform
her services under this Agreement;
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provided,
however, that prior to any termination of employment for Good Reason, the
Executive must first provide written notice to the Employers within ninety
(90)
days of the initial existence of the condition, describing the existence
of such
condition, and the Employers shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Employers received the
written
notice from the Executive. If the Employers remedy the condition
within such thirty (30) day cure period, then no Good Reason shall be deemed
to
exist with respect to such condition. If the Employers do not remedy
the condition within such thirty (30) day cure period, then the Executive
may
deliver a Notice of Termination for Good Reason at any time within sixty
(60)
days following the expiration of such cure period.
(i) IRS. IRS
shall mean the Internal Revenue Service.
(a) The
Employers hereby employ the Executive as Executive Vice President and Chief
Financial Officer and the Executive hereby accepts said employment and agrees
to
render such services to the Employers on the terms and conditions set forth
in
this Agreement. Unless extended as provided in this Section 2, this Agreement
shall terminate three (3) years after December 14, 2007 (the "Commencement
Date"). Prior to the first annual anniversary of the Commencement
Date and each annual anniversary thereafter, the Boards of Directors of the
Employers shall consider, review (with appropriate corporate documentation
thereof, and after taking into account all relevant factors, including the
Executive's performance) and, if appropriate, explicitly approve a one-year
extension of the remaining term of this Agreement. The term of this
Agreement shall continue to extend each year if the Boards of Directors so
approve such extension unless the Executive gives written notice to the
Employers of the Executive's election not to extend the term, with such notice
to be given not less than thirty (30) days prior to any such anniversary
date. If the Boards of Directors elect not to extend the term, they
shall give written notice of such decision to the Executive not less than
thirty
(30) days prior to any such anniversary date. If any party gives
timely notice that the term will not be extended as of any annual anniversary
date, then this Agreement shall terminate at the conclusion of its remaining
term. References herein to the term of this Agreement shall refer
both to the initial term and successive terms.
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(b) During
the term of this Agreement, the Executive shall perform such executive services
for the Employers as are consistent with her title of Executive Vice President
and Chief Financial Officer.
(a) The
Employers shall compensate and pay Executive for her services during the
term of
this Agreement at a minimum base salary of $210,000 per year ("Base Salary"),
which may be increased from time to time in such amounts as may be determined
by
the Boards of Directors of the Employers. In addition to her Base
Salary, the Executive shall be entitled to receive during the term of this
Agreement such bonus payments as may be determined by the Boards of Directors
of
the Employers.
(b) During
the term of the Agreement, Executive shall be entitled to participate in
and
receive the benefits of any pension or other retirement benefit plan, profit
sharing, stock option, employee stock ownership, or other plans, benefits
and
privileges given to employees and executives of the Employers, to the extent
commensurate with her then duties and responsibilities, as fixed by the Boards
of Directors of the Employers. The Employers shall not make any
changes in such plans, benefits or privileges which would adversely affect
Executive's rights or benefits thereunder, unless such change occurs pursuant
to
a program applicable to all executive officers of the Employers 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 the
Employers. 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 the Executive pursuant to Section 3(a)
hereof.
(c) During
the term of this Agreement, the Executive shall be entitled to paid annual
vacation in accordance with the policies as established from time to time
by the
Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized
by the
Boards of Directors of the Employers.
(d) During
the term of this Agreement, in keeping with past practices, the Employers
shall
continue to provide the Executive with the automobile he presently drives.
The
Employers shall be responsible and shall pay for all costs of insurance
coverage, repairs, maintenance and other incidental expenses, including license,
fuel and oil. If such costs or expenses are initially paid by the
Executive, the Employers shall reimburse the Executive therefor. Such
reimbursement shall be paid promptly by the Employers and in any event no
later
than March 15 of the year immediately following the year in which such expenses
were incurred. The Employers shall provide the Executive with a
replacement automobile of a similar type as selected by the Executive at
approximately the time that her present automobile reaches three (3) years
of
age and approximately every three (3) years thereafter, upon the same terms
and
conditions.
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(e) During
the term of this Agreement, in keeping with past practices, the Employers
shall
continue to pay the annual membership dues at the country clubs at which
the
Executive is currently a member. If such dues are initially paid by
the Executive, the Employers shall reimburse the Executive
therefor. Such reimbursement shall be paid promptly by the Employers
and in any event no later than March 15 of the year immediately following
the
year in which such dues were paid.
(f) The
Employers shall provide continued medical insurance in the Employers' health
plan for the benefit of the Executive and her spouse for a period of five
years
from the date of the Executive’s Retirement, and such insurance shall be
comparable to that which is provided by the Employers to comparable executive
officers and regardless of whether the Executive is eligible to participate
in
the Employers' health plan. In the event of the Executive's death
before the expiration of such five year period, the Employers shall provide
the
Executive's spouse continued medical insurance in the Employers' health plan
comparable to that which is being provided to the Executive's spouse at such
time for the remainder of such five year period. Any insurance
premiums payable by the Employers or any successors pursuant to this Section
3(f) shall be payable at such times and in such amounts as if the Executive
was
still an employee of the Employers, subject to any increases in such amounts
imposed by the insurance company or COBRA, and the amount of insurance premiums
required to be paid by the Employers in any taxable year shall not affect
the
amount of insurance premiums required to be paid by the Employers in any
other
taxable year; and provided further that if the Executive’s participation in any
group insurance plan is barred, the Employers shall either arrange to provide
the Executive with insurance benefits substantially similar to those which
the
Executive was entitled to receive under such group insurance plan or, if
such
coverage cannot be obtained, pay a lump sum cash equivalency amount within
thirty (30) days following the Date of Termination based on the annualized
rate
of premiums being paid by the Employers as of the Date of
Termination. This Section 3(f) shall not apply if the Executive is or
becomes employed full-time by an employer other than the Corporation or the
Bank.
(g) In
the event of the Executive's death during the term of this Agreement, the
Executive's spouse, estate, legal representative or named beneficiaries (as
directed by the Executive in writing) shall be paid on a monthly basis the
Executive's Base Salary (as defined in Section 3(a) hereof) in effect at
the
time of the Executive's death for a period of twelve (12) months from the
date
of the Executive's death.
(h) The
Executive's compensation and expenses shall be paid by the Corporation and
the
Bank in the same proportion as the time and services actually expended by
the
Executive on behalf of each respective Employer.
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(a) The
Employers shall have the right, at any time upon prior Notice of Termination,
to
terminate the Executive's employment hereunder for any reason, including
without
limitation termination for Cause, Disability or Retirement, and the Executive
shall have the right, upon prior Notice of Termination, to terminate her
employment hereunder for any reason.
(b) In
the event that (i) Executive's employment is terminated by the Employers
for
Cause, or (ii) the Executive terminates her employment hereunder other than
for
Good Reason, the Executive shall have no right pursuant to this Agreement
to
compensation or other benefits for any period after the applicable Date of
Termination. In the event that the Executive's employment is
terminated due to Disability or Retirement, the Executive's rights shall
be as
provided in Section 3(f) hereof. In the event the Executive's
employment is terminated due to the Executive's death, the Executive's rights
shall be as provided in Section 3(g) hereof.
(c) In
the event that (i) the Executive's employment is terminated by the Employers
for
other than Cause, Disability, Retirement or the Executive's death or (ii)
such
employment is terminated by the Executive for Good Reason, then the Employers
shall, subject to the provisions of Section 6 hereof, if
applicable,
(A) pay
to the Executive, in a lump sum within ten (10) business days following the
Date
of Termination, a cash severance amount equal to three (3) times the Executive's
Average Annual Compensation, and
(B) maintain
and provide for a period ending at the earlier of (i) the expiration of the
remaining term of employment pursuant hereto prior to the Notice of Termination
or (ii) the date of the Executive's full-time employment by another employer
(provided that the Executive is entitled under the terms of such employment
to
benefits substantially similar to those described in this subparagraph (B)),
at
no cost to the Executive, the Executive's continued participation in all
group
insurance, life insurance, health and accident insurance, and disability
insurance in which the Executive was participating immediately prior to the
Date
of Termination; provided that any insurance premiums payable by the Employers
or
any successors pursuant to this Section 5(c)(B) shall be payable at such
times
and in such amounts as if the Executive was still an employee of the Employers,
subject to any increases in such amounts imposed by the insurance company
or
COBRA, and the amount of insurance premiums required to be paid by the Employers
in any taxable year shall not affect the amount of insurance premiums required
to be paid by the Employers in any other taxable year; and provided further
that
if the Executive’s participation in any group insurance plan is barred, the
Employers shall either arrange to provide the Executive with insurance benefits
substantially similar to those which the Executive was entitled to receive
under
such group insurance plan or, if such coverage cannot be obtained, pay a
lump
sum cash equivalency amount within thirty (30) days following the Date of
Termination based on the annualized rate of premiums being paid by the Employers
as of the Date of Termination; and
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(C) pay
to the Executive, in a lump sum within thirty (30) days following the Date
of
Termination, a cash amount equal to the projected cost to the Employers of
providing benefits to the Executive for the remaining term of employment
under
this Agreement (prior to giving effect to the Notice of Termination) pursuant
to
any other employee benefit plans, program or arrangements offered by the
Employers in which the Executive was entitled to participate immediately
prior
to the Date of Termination (excluding (y) stock option plans, restricted
stock
plans and employee stock ownership plans of the Employers and (z) bonuses
and
other items of cash compensation), with the projected cost to the Employers
to
be based on the costs incurred for the calendar year immediately preceding
the
year in which the Date of Termination occurs and with any automobile-related
costs to exclude any depreciation on Bank-owned automobiles.
(a) The
Executive shall not be required to mitigate the amount of any benefits hereunder
by seeking other employment or otherwise, nor shall the amount of any such
benefits be reduced by any compensation earned by the Executive as a result
of
employment by another employer after the Date of Termination or otherwise,
except as set forth in sections 3(f) and 5(c)(B)(ii) hereof.
(b) The
specific arrangements referred to herein are not intended to exclude any
other
benefits which may be available to the Executive upon a termination of
employment with the Employers pursuant to employee benefit plans of the
Employers or otherwise.
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To
the Employers:
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Board
of Directors
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First
Federal Bancshares of Arkansas, Inc.
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Xxxxxxxx,
Xxxxxxxx 00000
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0000
Xxxxxxx 00-00 Xxxxx
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To
the Executive:
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Xxxxxx
Xxxxxxxx
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At
his last address on file with the
Employers
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12. Governing
Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United
States
where applicable and otherwise by the substantive laws of the State of
Arkansas.
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18. Regulatory
Actions. The following provisions shall be applicable to the
parties to the extent that they are required to be included in employment
agreements between a savings association and its employees pursuant to Section
563.39(b) of the Regulations Applicable to all Savings Banks, 12 C.F.R. §
563.39(b), or any successor thereto, and shall be controlling in the event
of a
conflict with any other provision of this Agreement, including without
limitation Section 5 hereof.
(a) If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employers' affairs by a notice served
under
Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act ("FDIA")
(12 U.S.C. §§1818(e)(3) and 1818(g)(1)), the Employers' 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 Employers may, in their discretion: (i) pay the Executive all or
part of the compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
(b) If
the Executive is removed from office and/or permanently prohibited from
participating in the conduct of the Employers' affairs by an order issued
under
Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §§1818(e)(4) and
(g)(1)), all obligations of the Employers under this Agreement shall terminate
as of the effective date of the order, but vested rights of the Executive
and
the Employers as of the date of termination shall not be affected.
(c) If
the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C.
§1813(x)(1)), all obligations under this Agreement shall terminate as of the
date of default, but vested rights of the Executive and the Employers as
of the
date of termination shall not be affected.
(d) All
obligations under this Agreement shall be terminated pursuant to 12 C.F.R.
§563.39(b)(5), except to the extent that it is determined that continuation
of
the Agreement for the continued operation of the Employers is necessary:
(i) by
the Director of the Office of Thrift Supervision ("OTS"), or her or her
designee, at the time the Federal Deposit Insurance Corporation ("FDIC")
enters
into an agreement to provide assistance to or on behalf of the Bank under
the
authority contained in Section 13(c) of the FDIA (12 U.S.C. §1823(c)); or (ii)
by the Director of the OTS, or her or her designee, at the time the Director
or
her 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 of the
OTS
to be in an unsafe or unsound condition, but vested rights of the Executive
and
the Employers as of the date of termination shall not be affected.
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Attest:
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FIRST
FEDERAL BANCSHARES OF ARKANSAS, INC.
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/s/ Xxxxx X. Xxxxxxxxxx |
By:
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/s/ Xxxxx X. Xxxxxx | |
Xxxxx X. Xxxxxxxxxx |
Xxxxx
X. Xxxxxx, President and Chief Executive Officer
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Attest:
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FIRST
FEDERAL BANK OF ARKANSAS, FA
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/s/ Xxxxx X. Xxxxxxxxxx |
By:
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/s/ Xxxxx X. Xxxxxx | |
Xxxxx X. Xxxxxxxxxx |
Xxxxx
X. Xxxxxx, Chief Executive Officer
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EXECUTIVE
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By:
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/s/ Xxxxxx X. Xxxxxxxx | ||
Xxxxxx
X. Xxxxxxxx
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