BANK OF NEW ORLEANS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.3
BANK
OF NEW ORLEANS
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is made and
entered into as of the 28th day of October 2008, between Bank of New Orleans
(the “Bank”), a federally chartered savings bank is a wholly owned subsidiary of
Louisiana Bancorp, Inc. (the “Corporation”), and Xxxxxxxx X. XxXxx, III (the
“Executive”).
WITNESSETH
WHEREAS, the
Executive is currently
employed as President and
Chief Executive Officer of
the Bank;
WHEREAS,
the Executive is currently employed as President and Chief Executive Officer of
the Corporation, a Louisiana corporation (the Corporation and the Bank are referred to together herein as the “Employers”);
WHEREAS,
the Bank adopted a Plan of Conversion pursuant to which the Bank converted to a
federally chartered stock savings bank and became a wholly owned subsidiary of
the Corporation (the “Conversion”);
WHEREAS,
the Bank and the Executive have previously entered into an employment agreement
dated July 9, 2007 (the “Prior Agreement”);
WHEREAS,
the Bank desires to amend and restate the Prior Agreement in order to make
changes to comply with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), as well as certain other changes;
WHEREAS,
the Bank desires to assure itself of the continued availability of the
Executive’s services as provided in this Agreement;
WHEREAS, the Executive
is willing to serve the Bank
on the terms and conditions
hereinafter set forth; and
WHEREAS, the Executive
is concurrently entering into a
separate employment agreement with the
Corporation;
NOW
THEREFORE, in consideration of the mutual agreements herein contained, and upon
the other terms and conditions hereinafter provided, the Bank and the Executive
hereby agree as follows:
1. Definitions. The
following words and terms shall have the meanings set forth below for the
purposes of this Agreement:
(a) Annual
Compensation. The Executive's “Annual Compensation” for
purposes of determining severance payable under this Agreement shall be deemed
to mean the sum of (i) the annual rate of Base Salary as of the Date of
Termination, and (ii) the cash bonus, if any, earned by the Executive for the
calendar year immediately preceding the year in which the Date of Termination
occurs.
(b) Base
Salary. “Base Salary” shall have
the meaning set forth in Section 3(a)
hereof.
(c) Cause.
Termination of the Executive's employment for “Cause” shall mean termination
because of 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.
(d) Change in
Control. “Change in Control” shall mean a change in the
ownership of the Corporation or the Bank, a change in the effective control of
the Corporation or the Bank or a change in the ownership of a substantial
portion of the assets of the Corporation or the Bank, in each case as provided
under Section 409A of the Code and the regulations thereunder, provided that the
Conversion shall not be deemed to constitute a Change in
Control.
(e) Code. “Code”
shall mean the Internal Revenue Code of 1986, as amended.
(f) Date of
Termination. “Date of Termination” shall mean (i) if the
Executive's employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment is terminated for
any other reason, the date specified in such Notice of
Termination.
(g) Disability. “Disability”
shall mean the Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Employers.
(h) ERISA. “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
(i) Good
Reason. “Good Reason” means the occurrence of any of the
following conditions:
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(i)
any material breach of this Agreement by the Bank, 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, or (C) any requirement
that the Executive report to a corporate officer or employee of the Bank
instead of reporting directly to the Board of Directors of the Bank,
or
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(ii)
any material change in the geographic location at which the Executive must
perform his 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 Bank within ninety (90) days
of the initial existence of the condition, describing the existence of such
condition, and the Bank shall thereafter have the right to remedy the condition
within thirty (30) days of the date the Bank received the written notice from
the Executive. If the Bank remedies 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 Bank does 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.
(j) IRS. IRS
shall mean the Internal Revenue Service.
(k) Notice of
Termination. Any purported termination of the Executive's
employment by the Bank for any reason, including without limitation for Cause,
Disability or Retirement, or by the Executive for any reason, including without
limitation for Good Reason, shall be communicated by a written “Notice of
Termination” to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be effective
immediately if the Bank terminates the Executive’s employment for Cause, and
(iv) is given in the manner specified in Section 10 hereof.
(l) Retirement. “Retirement”
shall means voluntary termination by the Executive which constitutes a
retirement, including early retirement, under the Bank’s 401(k)
plan.
2. Term
of Employment and Duties.
(a) The
Bank hereby employs the Executive as President and Chief Executive Officer and
the Executive hereby accepts said employment and agrees to render such services
to the Bank on the terms and conditions set forth in this
Agreement. The terms and conditions of this Agreement shall be and
remain in effect during the period of three years beginning on the
date first written above (the “Effective Date”) and ending on the third
anniversary of the Effective Date, plus such extensions, if any, as are provided
pursuant to Section 2(b) hereof (the "Employment Period").
(b) Except
as provided in Section 2(c), and subject to the requirement below that the Board
of Directors of the Bank determine at least annually that continued extensions
are appropriate, beginning on the Effective Date, on each day during the
Employment Period, the Employment Period shall automatically be extended for one
additional day, unless either the Bank, on the one hand, or the Executive, on
the other hand, elects not to extend the Agreement further by giving written
notice thereof to the other party, in which case the Employment Period shall end
on the third anniversary of the date on which such written notice is
given. At least annually, the Board of Directors of the Bank shall
consider and review (with appropriate corporate documentation thereof, and
taking into account all relevant factors) the Executive's performance hereunder
and whether the Employment Period shall continue to be extended. If
the Board of Directors determines at least annually that continued extensions of
the Employment Period are appropriate, then the Employment Period shall continue
to extend each day as set forth above. If the Board of Directors
determines not to extend the Employment Period, it shall provide written notice
to the Executive as set forth above. Upon termination of the
Executive's employment with the Bank for any reason whatsoever, any daily
extensions provided pursuant to this Section 2(b), if not theretofore
discontinued, shall automatically cease.
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(c) Nothing
in this Agreement shall be deemed to prohibit the Bank at any time from
terminating the Executive's employment during the Employment Period for any
reason, provided that the relative rights and obligations of the Bank and the
Executive in the event of any such termination shall be determined under this
Agreement.
(d) During
the term of this Agreement, the Executive shall manage the operations of the
Bank and oversee the officers that report to him. The Executive shall
also oversee the implementation of the policies adopted by the Board of
Directors of the Bank and shall report directly to the Board of
Directors. In addition, the Executive shall perform such executive
services for the Bank as may be consistent with his titles and from time to time
assigned to him by the Bank's Board of Directors.
3. Compensation
and Benefits.
(a) The
Employers shall compensate and pay the Executive for his services during the
term of this Agreement at a minimum base salary of $225,750 per year (“Base
Salary”), which may be increased from time to time in such amounts as may be
mutually determined by the Boards of Directors of the Employers and may not be
decreased without the Executive's express written consent. In
addition to his 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 this Agreement, the 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 his then duties and responsibilities, as fixed by the Boards
of Directors of the Employers, as well as his Supplemental Executive Retirement
Agreement with the Bank dated December 19, 2006, as subsequently amended and
restated. The Bank shall not make any changes in such plans, benefits
or privileges which would adversely affect the Executive's rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Bank and does not result in a proportionately greater
adverse change in the rights of or benefits to the Executive as compared with
any other executive officer of the Bank. Nothing paid to the
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.
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(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 an automobile comparable to the one
currently provided to him. 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.
(e) During
the term of this Agreement, in keeping with past practices, the Employers shall
continue to pay club dues and assessments for the Metairie Country Club on
behalf of the Executive so that the Executive may use such club for business
purposes.
(f) The
Executive's compensation, benefits, severance 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. No provision contained in this Agreement shall require the
Bank to pay any portion of the Executive’s compensation, benefits, severance and
expenses required to be paid by the Corporation pursuant to this Agreement or
the agreement of even date being entered into between the Corporation and the
Executive.
4. Expenses. The
Employers shall reimburse the Executive or otherwise provide for or pay for all
reasonable expenses incurred by the Executive in furtherance of or in connection
with the business of the Employers, including, but not by way of limitation,
automobile expenses described in Section 3(d) hereof, and traveling expenses,
and all reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and policies as may be established by the Boards of Directors of
the Employers. If such expenses are paid in the first instance 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.
5. Termination.
(a) The
Bank 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 his
employment hereunder for any reason.
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(b) In
the event that (i) the Executive's employment is terminated by the Bank for
Cause or (ii) the Executive terminates his employment hereunder other than for
Disability, Retirement, death or 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.
(c) In
the event that the Executive's employment is terminated as a result of
Disability, Retirement or the Executive's death during the term of this
Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.
(d) In
the event that (i) the Executive's employment is terminated by the Bank for
other than Cause, Disability, Retirement or the Executive's death or (ii) such
employment is terminated by the Executive for Good Reason, in each case either
before or after a Change in Control, then the Bank shall, subject to the
provisions of Section 6 hereof, if applicable,
(A) pay
to the Executive, in a lump sum as of the Date of Termination, a cash severance
amount equal to three (3) times that portion of the Executive's Annual
Compensation paid by the Bank,
(B) maintain
and provide for a period ending at the earlier of (i) thirty-six (36) months
after the Date 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 offered by the Bank in
which the Executive was entitled to participate immediately prior to the Date of
Termination, subject to subparagraphs (C) and (D) below,
(C) in
the event that the Executive's participation in any plan, program or arrangement
as provided in subparagraph (B) of this Section 5(d) is barred, or during such
period any such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Bank shall arrange to provide the
Executive with benefits substantially similar to those which the Executive was
entitled to receive under such plans, programs and arrangements immediately
prior to the Date of Termination, and
(D) any
insurance premiums payable by the Bank pursuant to Section 5(d)(B) or (C) shall
be payable at such times and in such amounts (except that the Bank shall also
pay any employee portion of the premiums) as if the Executive was still an
employee of the Bank, 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 Bank in any taxable year shall not affect the amount of insurance
premiums required to be paid by the Bank in any other taxable
year.
6. Limitation of
Benefits under Certain Circumstances. If the payments and
benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Corporation or the Bank, would constitute a “parachute payment” under Section
280G of the Code, then the payments and benefits payable by the Bank pursuant to
Section 5 hereof shall be reduced by the minimum amount necessary to result in
no portion of the payments and benefits payable by the Bank under Section 5
being non-deductible to the Bank pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code. In
no event shall the payments and benefits payable under Section 5 exceed three
times the Executive’s average taxable income from the Bank for the five calendar
years preceding the year in which the Date of Termination occurs, with any
benefits to be provided subsequent to the Date of Termination to be discounted
to present value in accordance with Section 280G of the Code. If the
payments and benefits under Section 5 are required to be reduced, the cash
severance shall be reduced first, followed by a reduction in the fringe
benefits. The determination of any reduction in the payments and
benefits to be made pursuant to Section 5 shall be based upon the opinion of
independent tax counsel selected by the Bank and paid by the
Bank. Such counsel shall promptly prepare the foregoing opinion, but
in no event later than thirty (30) days from the Date of Termination, and may
use such actuaries as such counsel deems necessary or advisable for the
purpose. Nothing contained in this Section 6 shall result in a
reduction of any payments or benefits to which the Executive may be entitled
upon termination of employment under any circumstances other than as specified
in this Section 6, or a reduction in the payments and benefits specified in
Section 5 below zero.
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7. Mitigation;
Exclusivity of Benefits.
(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 Section 5(d)(B) above.
(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.
8. Withholding. All
payments required to be made by the Bank hereunder to the Executive shall be
subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Bank shall determine are required to be withheld
pursuant to any applicable law or regulation.
9. Assignability. The
Bank may assign this Agreement and its rights and obligations hereunder in
whole, but not in part, to any corporation, bank or other entity with or into
which the Bank may hereafter merge or consolidate or to which the Bank may
transfer all or substantially all of its assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Bank hereunder as fully as if it had been
originally made a party hereto, but may not otherwise assign this Agreement or
its rights and obligations hereunder. The Executive may not assign or
transfer this Agreement or any rights or obligations
hereunder.
10. Notice. For
the purposes of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below:
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To the
Bank: Secretary
Bank of
New Orleans
0000
Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxx 00000
To the
Corporation: Secretary
Louisiana Bancorp, Inc.
0000
Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxx 00000
To the
Executive: Xxxxxxxx
X. XxXxx, III
At the
address last appearing on
the
personnel records of the Employers
11. Amendment;
Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Bank to sign on its
behalf. No waiver by any party hereto at any time of any breach by
any 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. In addition, notwithstanding anything in this
Agreement to the contrary, the Bank may amend in good faith any terms of this
Agreement, including retroactively, in order to comply with Section 409A of the
Code.
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
Louisiana.
13. Nature of
Obligations. Nothing contained herein shall create or require
the Bank to create a trust of any kind to fund any benefits which may be payable
hereunder, and to the extent that the Executive acquires a right to receive
benefits from the Bank hereunder, such right shall be no greater than the right
of any unsecured general creditor of the Bank.
14. Headings. The
section headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
15. Validity. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
16. Changes in Statutes
or Regulations. If any statutory or regulatory provision referenced
herein is subsequently changed or re-numbered, or is replaced by a separate
provision, then the references in this Agreement to such statutory or regulatory
provision shall be deemed to be a reference to such section as amended,
re-numbered or replaced.
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17. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.
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 bank and its employees pursuant to Section
563.39(b) of the Office of Thrift Supervision (“OTS”) Rules and Regulations, 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
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank's affairs pursuant to 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 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, in its 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 Bank's 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 Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the Executive and the Bank
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 Bank 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 Bank is necessary: (i) by the
Director of the OTS, or his/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 his/her
designee, at the time the Director or his/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.
19. Regulatory
Prohibition. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and 12 C.F.R. Part
359.
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20. Entire
Agreement. This Agreement embodies the entire agreement
between the Bank and the Executive with respect to the matters agreed to
herein. All prior agreements between the Bank and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect, including the Prior Agreement. Notwithstanding the
foregoing, nothing contained in this Agreement shall affect the agreement of
even date being entered into between the Corporation and the
Executive.
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first written
above.
| Attest: | BANK OF NEW ORLEANS | ||
| /s/Xxxx X. Xxxxxxxxxxxx | By: | /s/Xxxxxx X. Xxxxxx | |
| Xxxx X. Xxxxxxxxxxxx | Xxxxxx X. Xxxxxx | ||
| Corporate Secretary | Chairman of the Compensation Committee | ||
| EXECUTIVE | |||
| By: | /s/Xxxxxxxx X. XxXxx, III | ||
| Xxxxxxxx X. XxXxx, III | |||
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