EXHIBIT 10.7
Exhibit 10.7 Employment Agreement between Valley Financial Corp. and Valley
Savings Bank and Xxxxx X. Rule
EMPLOYMENT AGREEMENT
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This Agreement is made effective as of September 18, 1997, by and between
Valley Savings Bank ("Bank"), Burlington, Iowa, Valley Financial Corp.
("Company") and Xxxxx X. Xxxxx, Xx., ("Executive").
WHEREAS, the Bank and Company wish to be assured of the services of
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Bank as
determined by the Board of Directors of Bank for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES
During the period of his employment hereunder, the Executive agrees to
serve as President of Bank and, if the Executive agrees to serve, if
elected, as an officer and director of Company or any subsidiary or
affiliate of the Bank or Company.
2. TERMS AND DUTIES
(a) The term of this Agreement shall be deemed to have commenced
as of June 12, 1997 and shall continue through the close of
business on June 30, 1998; provided however, that if any
person or entity shall acquire beneficial ownership (within
the meaning of section 13 of the Securities Exchange Act of
1934, as amended) of fifty-one percent (51%) or more of the
outstanding common stock of either the Company or the Bank (an
"Acquisition of Control") after June 12, 1997 and on or before
June 30, 1998, the term of this Agreement shall continue
through the close of business on the first anniversary of such
Acquisition of Control. Following the expiration date of the
term of this Agreement, the Executive's employment shall
continue through the six (6) month anniversary of the date on
which the Bank or the Company gives notice of its intention to
terminate Executive's employment for reasons other than
"Termination for Cause," but such continued employment shall
not be deemed an extension of the term of this Agreement.
(b) The Executive shall devote substantially all of his business
time, attention, skill and efforts to the faithful performance
of his duties for the position elected regarding the operation
and management of Bank. The Executive may serve, or continue
to serve, on the Boards of Directors of, and hold any other
offices or positions in, companies or organizations, which in
the judgement of the Bank's Board of Directors, will not
present any conflict of interest with the Bank or Company, or
materially affect the performance of Executive's duties
pursuant to this Agreement.
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3. COMPENSATION AND REIMBURSEMENT
(a) The compensation specified under this Agreement shall be the
salary and benefits approved as compensation by the Board of
Directors of Bank which shall be approved no less than once a
calendar year; provided, however, in no event shall the salary
approved be less than the salary in effect on the date of this
Agreement, $87,400 per annum.
(b) In addition to the compensation provided by paragraph (a)
above, the Bank shall pay or reimburse the Executive for all
travel and other obligations incurred by Executive which are
reasonable and necessary for the Executive to complete his
required duties.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(a) Upon the occurrence of an Event of Termination (as herein
defined), the follo wing provisions shall apply.
(b) As used in this Agreement an "Event of Termination" shall mean
and include any one or more of the following; (1) death or
disability of the Executive or (2) termination of the
Executive's employment, other than "Termination for Cause," by
Bank or Company.
(c) Upon the occurrence of an Event of Termination during the term
of this Agreement and prior to an Acquisition of Control, the
Bank shall pay the Executive, or in the event of his
subsequent death, his beneficiaries or his estate as the case
may be, as severance pay or liquidated damages, or both, an
amount equal to one year's base salary, payable in twelve (12)
equal installments on the first business day of each month
commencing with the first day of the month following the
effective date of the Event of Termination and for eleven (11)
months thereafter. In the event of the death of the Executive
during the period from the Event of Termination until the
first anniversary thereof, the remaining payments shall be
paid to the Executive's beneficiaries or his estate, as the
case may be.
(d) In the event that the Bank or Company terminates the
Executive's employment, other than "Termination for Cause," on
any date following the term of this Agreement, the Bank or
Company shall provide Executive with at least six (6) month's
notice of such termination. In the event that the Bank or
Company fails to provide such notice, the Bank shall pay the
Executive, or in the event of his subsequent death, his
beneficiaries or his estate as the case may be, as severance
pay or liquidated damages, or both, an amount equal to his
monthly base salary, multiplied by the number of months during
the six (6) month period prior to the Executive's termination
for which the Executive did not receive notice of such
termination ("Non-notice Months"). Such amount shall be
payable in equal installments on the first business day of
each month commencing with the first day of the month
following the effective date of the Executive's termination
and shall continue to be paid for the number of Non-notice
Months. In the event of the death of the Executive during the
period from the Event of Termination until the payment period
described above has terminated, the remaining payments shall
be paid to the Executive's beneficiaries or his estate, as the
case may be.
(e) If, as a result of the Executive's incapacity due to physical
or mental illness, he shall have been absent from the
performance of his duties for Bank for six (6) consecutive
months, the Bank may terminate Executive's employment for
"disability".
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(f) Upon the occurrence of an Event of Termination, the Bank will
cause, to the extent it is able, continuation of life,
medical, dental and disability benefits coverage as maintained
for Executive prior to his termination. Such coverage shall
cease upon the expiration of payments due under the Agreement.
5. TERMINATION FOR CAUSE
The term "Termination for Cause" pursuant to this Agreement shall mean
termination of the Executive as a result of: (1) intentional failure
to perform stated duties, (2) personal dishonesty which results in
loss to the Bank or one of its affiliates, (3) willful violation of
any law, rule, regulation (other than traffic violations or similar
offenses), (4) breach of fiduciary duty involving personal profit, (5)
final cease-and-desist order or (6) material breach of this Agreement.
6. OTHER
(a) Any payments made to the Executive pursuant to this Agreement,
or otherwise, are subject to and conditioned upon compliance
with 12 U.S.C. §1828(k) regarding golden parachutes and
indemnification payments and any regulations promulgated
thereunder.
(b) The headings or sections and paragraphs herein are included
solely for convenience or reference and shall not control the
meaning or interpretation of any of the provisions of this
Agreement.
(c) This Agreement shall be governed by the laws of the State of
Iowa, unless otherwise specified herein.
(d) The Bank and the Company shall require any successor or
assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, of all or substantially all the
business or assets of the Bank or the Company, expressly and
unconditionally to assume and agree to perform the Bank's
obligations under this Agreement, in the same manner and to
the same extent that the Bank would be required to perform if
no such succession or assignment had taken place.
(e) This instrument contains the entire agreement of the parties
relating to the subject matter hereof, and supersedes in its
entirety any and all prior agreement, understandings or
representations relating to the subject matter hereof,
including, but not limited to, the Employment Agreement
effective as of June 12, 1997. No modifications of this
Agreement shall be valid unless made in writing and signed by
the parties hereto.
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IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement
to be executed by a duly authorized officer or member of the Board of
Directors and Executive has signed this Agreement, as of the date first above
written.
Attest: Valley Savings Bank
/s/ Xxxxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxx
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Attest: Valley Financial Corp.
/s/ Xxxxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxx
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Attest:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxx, Xx.
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Executive
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