Change-In-Control
CHANGE-IN-CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is entered into and effective this 14th day of June, 1996,
("Effective Date") by and between Coastal Bancorp, Inc. (the "Company") and
Coastal Banc ssb (the "Bank") and Xxxx X. Xxxxxxx (the "Employee").
WHEREAS, the Employee had heretofore been employed by the Company and the
Bank as an executive officer, and the Company and the Bank deems it to be in
their best interest to enter into this Agreement as additional incentive to
the Employee to continue as an executive employee of the Company and the Bank;
and
WHEREAS, the parties desire by this writing to set forth their
understanding as to their respective rights and obligations in the event a
"change in control" (as defined herein) occurs with respect to the Bank or the
Company;
NOW, THEREFORE, the undersigned parties AGREE as follows:
1. Defined Terms
When used anywhere in the Agreement, the following terms shall have
the meaning set forth herein.
(a) "Change in Control" shall mean any one of the following
events: (i) where, during any period of two consecutive years, individuals
(the "Continuing Directors") who at the beginning of such period constitute
the Board of Directors of the Bank or the Company (the "Existing Board") cease
for any reason to constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a member of the
Existing Board was approved by a vote of at least two-thirds of the Continuing
Directors then in office shall be considered a Continuing Director following:
(A) the acquisition by a person of ownership, holding or power to vote more
than 25% of the Bank's or the Company's voting stock, (B) the acquisition by
any person of the ability to control the election of a majority of any class
or classes of the Bank's or the Company's directors, or (C) the acquisition of
a controlling influence over the management or policies of the Bank or the
Company defined as set forth in 12 C.F.R. 574.4(b),(c) and (d) by any person
or to persons acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (ii) the sale, exchange, lease, transfer
or other disposition (in one or more transactions) to any person of all or a
substantial part of the assets, liabilities or business of the Company or the
Bank, (iii) any merger or consolidation or share exchange of the Company or
the Bank with any other person which subsequent thereto the Company or the
Bank is not the surviving entity, or (iv) any change in business of the
Company or the Bank such that the Company does not own the voting stock of an
insured depository institution or the business of the Bank is not as an
insured depository institution. Notwithstanding the foregoing, in the case of
(i) or (ii) or (iii) hereof, change of ownership or control of the Bank by the
Company itself to or among direct or indirect wholly-owned subsidiaries of the
Company shall not constitute a Change in Control. For purposes of this
paragraph only, the term "person" refers to an individual or a corporation,
limited liability company, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein. The decision of the Bank's
non-employee directors as to whether or not a Change in Control, as defined
herein, has occurred, and the date of such occurrence, shall be conclusive and
binding.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and
regulations in effect from time to time.
(c) "Code 280G Maximum" shall mean product of 2.99 and the "base
amount" as defined in Code 280G(b)(3).
(d) "Good Reason" shall mean any of the following events, which has
not been consented to in advance by the Employee in writing: (i) the
requirement that the Employee move his personal residence, or perform his
principal executive functions, more than thirty (30) miles from his primary
office as of the date of the Change in Control; (ii) a material (defined to be
10% or more) reduction in the Employee's base compensation as in effect on the
date of the Change in Control or as the same may be increased from time to
time; (iii) a successor to the Company or the Bank fails or refuses to assume
the Company's and the Bank's obligations under this Agreement; (iv) the
Company, the Bank or successor thereto breaches any provision of this
Agreement; or (v) the Employee is terminated for other than just cause after
the Change in Control.
(e) "Just Cause" shall mean, in the good faith determination of the
Company's and the Bank's Boards of Directors, the Employee'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. The Employee shall have the right
to make a presentation to the Board of Directors with counsel prior to the
rendering of such determination by the Board. The Employee shall have no
right to receive compensation or other benefits for any period after
termination for Just Cause. No act, or failure to act, on the Employee's part
shall be considered "willful" unless he has acted, or failed to act, with an
absence of good faith and without a reasonable belief that his action or
failure to act was in the best interest of the Bank and the Company.
(f) "Protected Period" shall mean the period that begins on the date
six months before a Change in Control and ends on the later of the third
annual anniversary of the Change in Control or the expiration date of this
Agreement.
2. Trigger Events
The Employee shall be entitled to collect the severance benefits set
forth in Section 3 of this Agreement in the event that (a) a Change of Control
has occurred and the Employee voluntarily terminates his employment within the
30-day period beginning on the first anniversary of the date of the occurrence
of a Change in Control, (b) the Employee voluntarily terminates employment
within 90 days of an event that both occurs during the Protected Period and
constitutes Good Reason, or (c) the Bank, the Company, or their successor(s)
in interest terminate the Employee's employment for any reason other than Just
Cause during the Protected Period.
3. Amount of Severance Benefit
(a) If the Employee becomes entitled to collect severance benefits
pursuant to Section 2(a) hereof, the Company and/or the Bank shall pay
Employee one (1) times the annual salary and bonus or incentive compensation
(not including stock compensation plans) paid to Employee by the Company
and/or the Bank during the immediately preceding year of the term of
employment, such sum to be paid within five (5) days of the date that
Employee's employment actually ceases.
(b) If the Employee becomes entitled to collect severance benefits
pursuant to Section 2(b) or 2(c) hereof, the Company and/or the Bank shall pay
Employee 2.99 times the annual salary and bonus or incentive compensation (not
including stock compensation plans) paid to Employee by the Company and/or the
Bank during the immediately preceding year of the term of employment, such sum
to be paid within five (5) days of the date that Employee's employment
actually ceases.
(c) The provisions of this Agreement shall not reduce any amounts
otherwise payable to the Employee or in any way diminish the employee's
rights, whether existing now or hereafter under any benefit plan of the
Company or the Bank. The Employee shall not be obligated to mitigate any
payments entitled to be received hereunder.
(d) The foregoing payments and benefits shall be paid to the
Employee's beneficiaries by testate or intestate succession in the event of
Employee's death during the period during which such payments and benefits are
being provided.
(e) In the event that the Employee and the Company or the Bank, as
the case may be (hereinafter, in this Section 3(e), the "Company") agree that
the Employee has collected an amount exceeding the Code 280G Maximum, the
parties agree as follows:
(i) In the calendar year that the Employee is entitled to
receive a payment or benefits under the provisions of this Agreement, the
independent accountants of the Company shall determine if an excess parachute
payment (as defined in Section 4999 of the Code, as amended, and any successor
provision thereto) exists.
Such determination shall be made after taking any reductions
permitted pursuant to Section 280G of the Code and the regulations thereunder.
Any amount determined to be an excess parachute payment after taking into
account such reductions shall be hereafter referred to as the "Initial Excess
Parachute Payment". As soon as practicable after a Change in Control of the
Company or the Bank, the Initial Excess Parachute Payment shall be determined.
Immediately following a Change in Control of the Company or the Bank, the
Company or the Bank shall pay the Employee, subject to applicable withholding
requirements under applicable state or federal law an amount equal to:
(a) twenty (20) percent of the Initial Excess Parachute Payment (or such
other amount equal to the tax imposed under Section 4999 of the Code), and
(b) such additional amount (tax allowance) as may be necessary to
compensate the Employee for the payment by the Employee of state and federal
income and excise taxes on the payment provided under Clause (a) and on any
payments under this Clause (b). In computing such tax allowance, the payment
to be made under Clause (a) shall be multiplied by the "gross up percentage"
("GUP"). The GUP shall be determined as follows:
GUP = Tax Rate
1 - Tax Rate
The Tax Rate for purposes of computing the GUP shall be the highest marginal
federal and state income and employment-related tax rate, including any
applicable excise tax rate, applicable to the Employee in the year in which
the payment under Clause (a) is made.
(ii) Notwithstanding the foregoing, if it shall subsequently be
determined in a final judicial determination or a final administrative
settlement to which the Employee is a party that the excess parachute payment
is defined in Section 4999 of the Code, reduced as described above, is
different from the Initial Excess Parachute Payment (such different amount
being hereafter referred to as the "Determinative Excess Parachute Payment")
then the Company's independent accountants shall determine the amount (the
"Adjustment Amount") the Employee must pay to the Company or the Bank or the
Company or the Bank must pay to the Employee in order to put the Employee (or
the Company or the Bank, as the case may be) in the same position the Employee
(or the Company or the Bank, as the case may be) would have been if the
Initial Excess Parachute Payment had been equal to the Determinative Excess
Parachute Payment. In determining the Adjustment Amount, the independent
accountants shall take into account any and all taxes (including any penalties
and interest) paid by or for the Employee or refunded to the Employee or for
the Employee's benefit. As soon as practicable after the Adjustment Amount
has been so determined, the Company or the Bank shall pay the Adjustment
Amount to the Employee or the Employee shall repay the Adjustment Amount to
the Company or the Bank, as the case may be.
(iii) In any calendar year that the Employee receives payments of
benefits under this Agreement, the Employee shall report on his state and
federal income tax returns such information as is consistent with the
determination made by the independent accountants of the Company as described
above. The Company and the Bank shall indemnify and hold the Employee
harmless from any and all losses, costs and expenses (including without
limitation, reasonable attorney's fees, interest, fines and penalties) which
the Employee incurs as a result of so reporting such information. Employee
shall promptly notify the Company and the Bank in writing whenever the
Employee receives notice of the institution of a judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under
Section 4999 of the Code of any amount paid or payable under this the
Employment Agreement is being reviewed or is in dispute. The Company or the
Bank shall assume control at its expense over all legal and accounting matters
pertaining to such federal tax treatment (except to the extent necessary or
appropriate for the Employee to resolve any such proceeding with respect to
any matter unrelated to amounts paid or payable pursuant to this contract) and
the Employee shall cooperate fully with the Company or the Bank in any such
proceeding. The Employee shall not enter into any compromise or settlement or
otherwise prejudice any rights the Company or the Bank may have in connection
therewith without prior consent of the Company.
4. Term of the Agreement
This Agreement shall remain in effect for the period commencing on the
Effective Date and ending on the earlier of (i) the date 36 months after the
Effective Date, and (ii) the date on which the Employee terminates employment
with the Company or the Bank; provided that the Employee's rights hereunder
shall continue following the termination of his employment with the Company or
the Bank under any of the circumstances described in Section 2 hereof.
5. Termination or Suspension Under Federal Law
Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
1828(k) and any regulations promulgated thereunder.
6. Expense Reimbursement
In the event that any dispute arises between the Employee and the Company
or the Bank as to the terms or interpretations of this Agreement, whether
instituted by formal legal proceedings or otherwise, including any action that
the Employee takes to enforce the terms of this Agreement or to defend against
any action taken by the Company or the Bank, the Employee shall be reimbursed
for all costs and expenses, including reasonable attorneys' fees, arising from
such dispute, proceedings or actions, provided that the Employee shall obtain
a final judgment in favor of the Employee in a court or competent jurisdiction
or in binding arbitration under the rules of the American Arbitration
Association. Such reimbursement, which may be in advance of any final
judgment or determination in arbitration, if requested in writing by the
Employee, shall be paid within ten (10) days of Employee's furnishing to the
Company or the Bank written evidence, which may be in the form, among other
things, or a canceled check or receipt, of any costs or expenses incurred by
the Employee.
7. Successors and Assigns
(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor or assign of the Company or the Bank which
shall acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Bank or
Company. This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal and legal representatives, executors, administrators,
successors, heirs, devisees and legatees. If the Employee should die while
any amounts are still payable to him/her hereunder, all such amounts shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee, or if there be no such designee, to the Employee's
Estate.
(b) Since the Company and the Bank are contracting for the unique and
personal skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties hereunder without first obtaining
the written consent of the Company or the Bank.
8. Amendments
No amendments or additions to this Agreement shall be binding unless made
in writing and signed by all of the parties, except as herein otherwise
specifically provided. No waiver by either party hereto at any time of any
breach by the other party hereto, or of compliance with, any condition or
provision of this Agreement to be performed by such other party will be deemed
to be a waiver of similar or dissimilar provisions or conditions, at the same
or any prior or subsequent time.
9. Applicable Law
Except to the extent preempted by Federal law, the laws of the State of
Texas shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
10. Severability
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof.
11. Entire Agreement
This Agreement, together with any understanding or modifications thereof
as agreed to in writing by the parties, shall constitute the entire agreement
between the parties hereto.
12. Notices
For purposes of this Agreement, notices and 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 U.S. registered or certified mail,
return receipt requested, postage prepaid, as follows: If to the Company or
the Bank: Chairman of the Board and Chief Executive Officer, Coastal Bancorp,
Inc., 0 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000. If to the Employee:
Xxxx X. Xxxxxxx
0000 Xxxxxxxxx
Xxxxxxxxx, Xxxxx 00000
ss# ###-##-####
Employee Name & Address
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first herein above written.
ATTEST: COASTAL BANCORP, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
Secretary Xxxxxx X. Xxxxx,
Chairman of the Board
and Chief Executive Officer
ATTEST: COASTAL Banc ssb
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
Secretary Xxxxxx X. Xxxxx,
Chairman of the Board
and Chief Executive Officer
WITNESS
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
CHANGE-IN-CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is entered into and effective this 14th day of June, 1996,
("Effective Date") by and between Coastal Bancorp, Inc. (the "Company") and
Coastal Banc ssb (the "Bank") and Xxxxxxxxx X. Xxxxx (the "Employee").
WHEREAS, the Employee had heretofore been employed by the Company and the
Bank as an executive officer, and the Company and the Bank deems it to be in
their best interest to enter into this Agreement as additional incentive to
the Employee to continue as an executive employee of the Company and the Bank;
and
WHEREAS, the parties desire by this writing to set forth their
understanding as to their respective rights and obligations in the event a
"change in control" (as defined herein) occurs with respect to the Bank or the
Company;
NOW, THEREFORE, the undersigned parties AGREE as follows:
1. Defined Terms
When used anywhere in the Agreement, the following terms shall have
the meaning set forth herein.
(a) "Change in Control" shall mean any one of the following
events: (i) where, during any period of two consecutive years, individuals
(the "Continuing Directors") who at the beginning of such period constitute
the Board of Directors of the Bank or the Company (the "Existing Board") cease
for any reason to constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a member of the
Existing Board was approved by a vote of at least two-thirds of the Continuing
Directors then in office shall be considered a Continuing Director following:
(A) the acquisition by a person of ownership, holding or power to vote more
than 25% of the Bank's or the Company's voting stock, (B) the acquisition by
any person of the ability to control the election of a majority of any class
or classes of the Bank's or the Company's directors, or (C) the acquisition of
a controlling influence over the management or policies of the Bank or the
Company defined as set forth in 12 C.F.R. 574.4(b),(c) and (d) by any person
or to persons acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (ii) the sale, exchange, lease, transfer
or other disposition (in one or more transactions) to any person of all or a
substantial part of the assets, liabilities or business of the Company or the
Bank, (iii) any merger or consolidation or share exchange of the Company or
the Bank with any other person which subsequent thereto the Company or the
Bank is not the surviving entity, or (iv) any change in business of the
Company or the Bank such that the Company does not own the voting stock of an
insured depository institution or the business of the Bank is not as an
insured depository institution. Notwithstanding the foregoing, in the case of
(i) or (ii) or (iii) hereof, change of ownership or control of the Bank by the
Company itself to or among direct or indirect wholly-owned subsidiaries of the
Company shall not constitute a Change in Control. For purposes of this
paragraph only, the term "person" refers to an individual or a corporation,
limited liability company, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein. The decision of the Bank's
non-employee directors as to whether or not a Change in Control, as defined
herein, has occurred, and the date of such occurrence, shall be conclusive and
binding.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and
regulations in effect from time to time.
(c) "Code 280G Maximum" shall mean product of 2.99 and the "base
amount" as defined in Code 280G(b)(3).
(d) "Good Reason" shall mean any of the following events, which has
not been consented to in advance by the Employee in writing: (i) the
requirement that the Employee move his personal residence, or perform his
principal executive functions, more than thirty (30) miles from his primary
office as of the date of the Change in Control; (ii) a material (defined to be
10% or more) reduction in the Employee's base compensation as in effect on the
date of the Change in Control or as the same may be increased from time to
time; (iii) a successor to the Company or the Bank fails or refuses to assume
the Company's and the Bank's obligations under this Agreement; (iv) the
Company, the Bank or successor thereto breaches any provision of this
Agreement; or (v) the Employee is terminated for other than just cause after
the Change in Control.
(e) "Just Cause" shall mean, in the good faith determination of the
Company's and the Bank's Boards of Directors, the Employee'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. The Employee shall have the right
to make a presentation to the Board of Directors with counsel prior to the
rendering of such determination by the Board. The Employee shall have no
right to receive compensation or other benefits for any period after
termination for Just Cause. No act, or failure to act, on the Employee's part
shall be considered "willful" unless he has acted, or failed to act, with an
absence of good faith and without a reasonable belief that his action or
failure to act was in the best interest of the Bank and the Company.
(f) "Protected Period" shall mean the period that begins on the date
six months before a Change in Control and ends on the later of the third
annual anniversary of the Change in Control or the expiration date of this
Agreement.
2. Trigger Events
The Employee shall be entitled to collect the severance benefits set
forth in Section 3 of this Agreement in the event that (a) a Change of Control
has occurred and the Employee voluntarily terminates his employment within the
30-day period beginning on the first anniversary of the date of the occurrence
of a Change in Control, (b) the Employee voluntarily terminates employment
within 90 days of an event that both occurs during the Protected Period and
constitutes Good Reason, or (c) the Bank, the Company, or their successor(s)
in interest terminate the Employee's employment for any reason other than Just
Cause during the Protected Period.
3. Amount of Severance Benefit
(a) If the Employee becomes entitled to collect severance benefits
pursuant to Section 2(a) hereof, the Company and/or the Bank shall pay
Employee one (1) times the annual salary and bonus or incentive compensation
(not including stock compensation plans) paid to Employee by the Company
and/or the Bank during the immediately preceding year of the term of
employment, such sum to be paid within five (5) days of the date that
Employee's employment actually ceases.
(b) If the Employee becomes entitled to collect severance benefits
pursuant to Section 2(b) or 2(c) hereof, the Company and/or the Bank shall pay
Employee 2.99 times the annual salary and bonus or incentive compensation (not
including stock compensation plans) paid to Employee by the Company and/or the
Bank during the immediately preceding year of the term of employment, such sum
to be paid within five (5) days of the date that Employee's employment
actually ceases.
(c) The provisions of this Agreement shall not reduce any amounts
otherwise payable to the Employee or in any way diminish the employee's
rights, whether existing now or hereafter under any benefit plan of the
Company or the Bank. The Employee shall not be obligated to mitigate any
payments entitled to be received hereunder.
(d) The foregoing payments and benefits shall be paid to the
Employee's beneficiaries by testate or intestate succession in the event of
Employee's death during the period during which such payments and benefits are
being provided.
(e) In the event that the Employee and the Company or the Bank, as
the case may be (hereinafter, in this Section 3(e), the "Company") agree that
the Employee has collected an amount exceeding the Code 280G Maximum, the
parties agree as follows:
(i) In the calendar year that the Employee is entitled to
receive a payment or benefits under the provisions of this Agreement, the
independent accountants of the Company shall determine if an excess parachute
payment (as defined in Section 4999 of the Code, as amended, and any successor
provision thereto) exists.
Such determination shall be made after taking any reductions
permitted pursuant to Section 280G of the Code and the regulations thereunder.
Any amount determined to be an excess parachute payment after taking into
account such reductions shall be hereafter referred to as the "Initial Excess
Parachute Payment". As soon as practicable after a Change in Control of the
Company or the Bank, the Initial Excess Parachute Payment shall be determined.
Immediately following a Change in Control of the Company or the Bank, the
Company or the Bank shall pay the Employee, subject to applicable withholding
requirements under applicable state or federal law an amount equal to:
(a) twenty (20) percent of the Initial Excess Parachute Payment (or such
other amount equal to the tax imposed under Section 4999 of the Code), and
(b) such additional amount (tax allowance) as may be necessary to
compensate the Employee for the payment by the Employee of state and federal
income and excise taxes on the payment provided under Clause (a) and on any
payments under this Clause (b). In computing such tax allowance, the payment
to be made under Clause (a) shall be multiplied by the "gross up percentage"
("GUP"). The GUP shall be determined as follows:
GUP = Tax Rate
1 - Tax Rate
The Tax Rate for purposes of computing the GUP shall be the highest marginal
federal and state income and employment-related tax rate, including any
applicable excise tax rate, applicable to the Employee in the year in which
the payment under Clause (a) is made.
(ii) Notwithstanding the foregoing, if it shall subsequently be
determined in a final judicial determination or a final administrative
settlement to which the Employee is a party that the excess parachute payment
is defined in Section 4999 of the Code, reduced as described above, is
different from the Initial Excess Parachute Payment (such different amount
being hereafter referred to as the "Determinative Excess Parachute Payment")
then the Company's independent accountants shall determine the amount (the
"Adjustment Amount") the Employee must pay to the Company or the Bank or the
Company or the Bank must pay to the Employee in order to put the Employee (or
the Company or the Bank, as the case may be) in the same position the Employee
(or the Company or the Bank, as the case may be) would have been if the
Initial Excess Parachute Payment had been equal to the Determinative Excess
Parachute Payment. In determining the Adjustment Amount, the independent
accountants shall take into account any and all taxes (including any penalties
and interest) paid by or for the Employee or refunded to the Employee or for
the Employee's benefit. As soon as practicable after the Adjustment Amount
has been so determined, the Company or the Bank shall pay the Adjustment
Amount to the Employee or the Employee shall repay the Adjustment Amount to
the Company or the Bank, as the case may be.
(iii) In any calendar year that the Employee receives payments of
benefits under this Agreement, the Employee shall report on his state and
federal income tax returns such information as is consistent with the
determination made by the independent accountants of the Company as described
above. The Company and the Bank shall indemnify and hold the Employee
harmless from any and all losses, costs and expenses (including without
limitation, reasonable attorney's fees, interest, fines and penalties) which
the Employee incurs as a result of so reporting such information. Employee
shall promptly notify the Company and the Bank in writing whenever the
Employee receives notice of the institution of a judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under
Section 4999 of the Code of any amount paid or payable under this the
Employment Agreement is being reviewed or is in dispute. The Company or the
Bank shall assume control at its expense over all legal and accounting matters
pertaining to such federal tax treatment (except to the extent necessary or
appropriate for the Employee to resolve any such proceeding with respect to
any matter unrelated to amounts paid or payable pursuant to this contract) and
the Employee shall cooperate fully with the Company or the Bank in any such
proceeding. The Employee shall not enter into any compromise or settlement or
otherwise prejudice any rights the Company or the Bank may have in connection
therewith without prior consent of the Company or the Bank.
4. Term of the Agreement
This Agreement shall remain in effect for the period commencing on the
Effective Date and ending on the earlier of (i) the date 36 months after the
Effective Date, and (ii) the date on which the Employee terminates employment
with the Company or the Bank; provided that the Employee's rights hereunder
shall continue following the termination of his employment with the Company or
the Bank under any of the circumstances described in Section 2 hereof.
5. Termination or Suspension Under Federal Law
Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
1828(k) and any regulations promulgated thereunder.
6. Expense Reimbursement
In the event that any dispute arises between the Employee and the Company
or the Bank as to the terms or interpretations of this Agreement, whether
instituted by formal legal proceedings or otherwise, including any action that
the Employee takes to enforce the terms of this Agreement or to defend against
any action taken by the Company or the Bank, the Employee shall be reimbursed
for all costs and expenses, including reasonable attorneys' fees, arising from
such dispute, proceedings or actions, provided that the Employee shall obtain
a final judgment in favor of the Employee in a court or competent jurisdiction
or in binding arbitration under the rules of the American Arbitration
Association. Such reimbursement, which may be in advance of any final
judgment or determination in arbitration, if requested in writing by the
Employee, shall be paid within ten (10) days of Employee's furnishing to the
Company or the Bank written evidence, which may be in the form, among other
things, or a canceled check or receipt, of any costs or expenses incurred by
the Employee.
7. Successors and Assigns
(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor or assign of the Company or the Bank which
shall acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Bank or
Company. This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal and legal representatives, executors, administrators,
successors, heirs, devisees and legatees. If the Employee should die while
any amounts are still payable to him/her hereunder, all such amounts shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee, or if there be no such designee, to the Employee's
Estate.
(b) Since the Company and the Bank are contracting for the unique and
personal skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties hereunder without first obtaining
the written consent of the Company or the Bank.
8. Amendments
No amendments or additions to this Agreement shall be binding unless made
in writing and signed by all of the parties, except as herein otherwise
specifically provided. No waiver by either party hereto at any time of any
breach by the other party hereto, or of compliance with, any condition or
provision of this Agreement to be performed by such other party will be deemed
to be a waiver of similar or dissimilar provisions or conditions, at the same
or any prior or subsequent time.
9. Applicable Law
Except to the extent preempted by Federal law, the laws of the State of
Texas shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
10. Severability
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof.
11. Entire Agreement
This Agreement, together with any understanding or modifications thereof
as agreed to in writing by the parties, shall constitute the entire agreement
between the parties hereto.
12. Notices
For purposes of this Agreement, notices and 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 U.S. registered or certified mail,
return receipt requested, postage prepaid, as follows: If to the Company or
the Bank: Chairman of the Board and Chief Executive Officer, Coastal Bancorp,
Inc., 0 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000. If to the Employee:
Xxxxxxxxx X. Xxxxx
0000 Xxxxxxxxxxxxx
Xxxxxxx, Xxxxx 00000
ss# ###-##-####
Employee Name & Address
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first herein above written.
ATTEST: COASTAL BANCORP, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
Secretary Xxxxxx X. Xxxxx,
Chairman of the Board
and Chief Executive Officer
ATTEST: COASTAL Banc ssb
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
Secretary Xxxxxx X. Xxxxx,
Chairman of the Board
and Chief Executive Officer
WITNESS
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxxxx X. Xxxxx
Xxxxxxxxx X. Xxxxx
