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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), made this 1ST DAY OF JANUARY, 2005,
by and among JEFFERSON FEDERAL BANK (the "Bank") and XXXXXXX X. XXXXXXXXX
("Executive").
W I T N E S S E T H
WHEREAS, the Bank desires to retain the services of the Executive as
the Chairman of the Knoxville Region of the Bank;
WHEREAS, Executive and the respective Board of Directors of the Bank
desire to enter into an agreement setting forth the terms and conditions of the
continuing employment of Executive and the related rights and obligations of
each of the parties;
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. EMPLOYMENT. Executive is employed as the Chairman of the
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Knoxville Region of the Bank. Executive shall perform all duties and shall have
all powers which are commonly incident to the office of an Executive Officer of
the Bank and which, consistent with those offices, are delegated to him by the
President and CEO of the Bank.
2. LOCATION AND FACILITIES. Executive will be furnished with the
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working facilities and staff customary for executive officers with the title and
duties set forth in Section 1 and as are necessary for him to perform his
duties. The location of such facilities and staff shall be at the principal
administrative offices of the Knoxville Region of the Bank, or at such other
site as may be designated from time to time by the Bank.
3. TERM.
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a. The term of this Agreement shall be (i) the initial term,
consisting of the period commencing on the date of this
Agreement (the "Effective Date") and ending three and one-half
years from of the Effective Date, plus (ii) any and all
extensions of the initial term made pursuant to this Section
3.
b. Commencing on June 30, 2006, and continuing on each
anniversary (June 30) thereafter, the members of the board of
directors in concert with the President and CEO of the Bank
may extend the Agreement an additional year such that the
remaining term of the Agreement shall be thirty-six (36)
months, unless Executive elects not to extend the term of this
Agreement by giving written notice in accordance with Section
19 of this Agreement. The President and CEO and the Board of
Directors of the Bank (the "Board") will review the Agreement
and Executive's performance annually for purposes of
determining whether to extend the Agreement and the rationale
and results thereof shall be included in the minutes of the
Board's meeting. The President and CEO of the Bank shall give
notice to Executive as soon as possible after such review as
to whether the Agreement is to be extended.
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4. BASE COMPENSATION.
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a. The Bank agrees to pay the Executive during the term of
this Agreement a base salary at the rate of $159,400 per year,
payable in accordance with customary payroll practices.
b. The Board shall review annually the rate of the
Executive's base salary based upon factors they deem relevant,
and may maintain or increase his salary, provided that no such
action shall reduce the rate of salary below the rate in
effect on the Effective Date.
c. In the absence of action by the Board, the Executive
shall continue to receive salary at the annual rate specified
on the Effective Date or, if another rate has been established
under the provisions of this Section 4, the rate last properly
established by action of the Board under the provisions of
this Section 4.
5. BONUSES. In lieu of any bonus normally provided to permanent
full-time employees of the Bank, the Bank agrees to provide a bonus program to
the Executive which will provide the Executive with the opportunity to earn up
to 50% of the Executive's base salary, on an annual basis, the amount of which
shall be determined by specific performance standards and a formula agreed to by
Executive and the Bank annually. Performance standards shall be measured on a
fiscal year, and no bonus shall be payable if Executive is not employed on June
30th of the year in question; provided, however, in the event of death of the
Executive, the bonus for the calendar year of Executive's death shall be
prorated on a quarterly basis, using the information for the quarter(s)
completed prior to Executive's death.
6. BENEFIT PLANS. The Executive shall be entitled to participate
in such life insurance, medical, dental, pension, profit-sharing, retirement and
stock-based compensation plans and other programs and arrangements as may be
approved from time to time by the Bank and/or Jefferson Bancshares, Inc. (the
"Company") for the benefit of their employees.
7. VACATION AND LEAVE.
a. The Executive shall be entitled to vacations and other
leave in accordance with policy for senior executives, or
otherwise as approved by the Board, but, in any event, not
less than four (4) weeks vacation annually.
b. In addition to paid vacations and other leave, the
Executive shall be entitled, without loss of pay, to absent
himself voluntarily from the performance of his employment for
such additional periods of time and for such valid and
legitimate reasons as the President and CEO or Board may in
its discretion determine. Further, the President and CEO or
Board may grant to the Executive a leave or leaves of absence,
with or without pay, at such time or times and upon such terms
and conditions as the President and CEO or Board in its
discretion may determine.
8. EXPENSE PAYMENTS AND REIMBURSEMENTS. The Executive shall be
reimbursed for all reasonable out-of-pocket business expenses that he shall
incur in connection with his services under this Agreement upon substantiation
of such expenses in accordance with applicable policies of the Bank. In
addition, Executive shall receive an allowance of $2,400 per year for dues in
professional, social and civic organizations, and the sum of $1,200 per year for
miscellaneous expenses.
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9. AUTOMOBILE ALLOWANCE. During the term of this Agreement, the
Executive shall be entitled to an annual automobile allowance of $12,000,
payable in equal monthly installments. Executive shall comply with reasonable
reporting and expense limitations on the use of such automobile as may be
established by the Bank from time to time, and the Bank shall annually include
on Executive's Form W-2 any amount of income attributable to Executive's
personal use of such automobile.
10. LOYALTY AND CONFIDENTIALITY; NONCOMPETITION.
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a. During the term of this Agreement, Executive: (i) shall
devote all his time, attention, skill, and efforts to the
faithful performance of his duties hereunder; provided,
however, that from time to time, Executive may serve on the
boards of directors of, and hold any other offices or
positions in, companies or organizations which will not
present any conflict of interest with the Bank or any of their
subsidiaries or affiliates, unfavorably affect the performance
of Executive's duties pursuant to this Agreement, or violate
any applicable statute or regulation and (ii) shall not engage
in any business or activity contrary to the business affairs
or interests of the Bank and/or the Company.
b. Nothing contained in this Agreement shall prevent or limit
Executive's right to invest in the capital stock or other
securities of any business dissimilar from that of the Company
or, solely as a passive, minority investor, in any business.
c. Executive agrees to maintain the confidentiality of any
and all information concerning the operation or financial
status of the Bank and/or the Company; the names or addresses
of any of its borrowers, depositors and other customers; any
information concerning or obtained from such customers; and
any other information concerning the Bank and/or the Company
to which he may be exposed during the course of his
employment. The Executive further agrees that, unless required
by law or specifically permitted by the Board in writing, he
will not disclose to any person or entity, either during or
subsequent to his employment, any of the above-mentioned
information which is not generally known to the public, nor
shall he employ such information in any way other than for the
benefit of the Bank and/or the Company.
d. Upon the termination of Executive's employment hereunder
for any reason, Executive agrees not to compete with the Bank
and/or any entity owned by the Company for a period of two (2)
years following such termination in any city, town or county
in which the Executive's normal business office is located and
the Bank and/or the Company affiliate has an office or has
filed an application for regulatory approval to establish an
office (or within a 60-mile radius of each of such offices),
determined as of the effective date of such termination,
except as agreed to pursuant to a resolution duly adopted by
the Board. Executive agrees that during such period and within
said cities, towns and counties, Executive shall not work for
or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with
the depository, lending or other business activities of the
Bank and/or the Company. The parties hereto, recognizing that
irreparable injury will result to the Bank, its business and
property in the event of Executive's breach of his obligations
under this paragraph and agree that in the event of any such
breach by Executive, the Bank and/or the Company, will be
entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof
by Executive, Executive's partners, agents, servants,
employees and all persons acting for or under the direction of
Executive. Nothing herein will be construed as prohibiting the
Bank and/or the Company from pursuing any other remedies
available to the Bank and/or the Company for such breach or
threatened breach, including the recovery of damages from
Executive.
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11. TERMINATION AND TERMINATION PAY. Subject to Section 12 of this
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Agreement, Executive's employment under this Agreement may be terminated in the
following circumstances:
a. Death. Executive's employment under this Agreement shall
terminate upon his death during the term of this Agreement, in
which event Executive's estate shall be entitled to receive
the compensation due to the Executive through the last day of
the calendar month in which his death occurred.
b. Retirement. This Agreement shall be terminated upon
Executive's retirement under the retirement benefit plan or
plans in which he participates pursuant to Section 6 of this
Agreement or otherwise.
c. Disability.
i. The Board or Executive may terminate Executive's
employment after having determined Executive has a
Disability. For purposes of this Agreement, "Disability"
means a physical or mental infirmity that impairs
Executive's ability to substantially perform his duties
under this Agreement and that results in Executive
becoming eligible for long-term disability benefits under
any long-term disability plans of the Bank (or, if there
are no such plans in effect, that impairs Executive's
ability to substantially perform his duties under this
Agreement for a period of one hundred eighty (180)
consecutive days). The Board shall determine whether or
not Executive is and continues to be permanently disabled
for purposes of this Agreement in good faith, based upon
competent medical advice and other factors that they
reasonably believe to be relevant. As a condition to any
benefits, the Board may require Executive to submit to
such physical or mental evaluations and tests as it deems
reasonably appropriate.
ii. In the event of such Disability, Executive's
obligation to perform services under this Agreement will
terminate. The Bank will pay Executive, as Disability
pay, an amount equal to seventy-five (75) percent of
Executive's weekly rate of base salary in effect as of
the date of his termination of employment due to
Disability. Disability payments will be made on a monthly
basis and will commence on the first day of the month
following the effective date of Executive's termination
of employment for Disability and end on the earlier of:
(A) the date he returns to full-time employment at the
Bank in the same capacity as he was employed prior to his
termination for Disability; (B) his death; or (C) the
remaining term of the Agreement (if the Agreement had not
been earlier terminated by the Executive's Disability).
Such payments shall be reduced by the amount of any
short- or long-term disability benefits payable to the
Executive under any other disability programs sponsored
by the Bank. In addition, during any period of
Executive's Disability, Executive and his dependents
shall, to the greatest extent possible, continue to be
covered under all benefit plans (including, without
limitation, retirement plans and medical, dental and life
insurance plans) of the Bank, in which Executive
participated prior to his Disability on the same terms as
if Executive were actively employed by the Bank.
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d. Termination for Cause.
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i. The Board may, by written notice to the Executive in the form and
manner specified in this paragraph, immediately terminate his
employment at any time, for "Cause". The Executive shall have no
right to receive compensation or other benefits for any period
after termination for Cause except for vested benefits.
Termination for "Cause" shall mean termination because of, in the
good faith determination of the Board, Executive's:
(1) Personal dishonesty;
(2) Incompetence;
(3) Willful misconduct;
(4) Breach of fiduciary duty involving personal
profit;
(5) Intentional failure to perform duties under
this Agreement;
(6) Willful violation of any law, rule or
regulation (other than traffic violations or
similar offenses), any felony conviction, any
violation of law involving moral turpitude, or
any violation of a final cease-and-desist
order; or
(7) Material breach by Executive of any provision
of this Agreement.
ii. Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for Cause by the Bank unless there shall have
been delivered to Executive a copy of a resolution duly adopted by
the affirmative vote of a majority of the entire membership of the
Board at a meeting of such Board called and held for the purpose
(after reasonable notice to Executive), of finding that in the
good faith opinion of the Board, Executive was guilty of the
conduct described above and specifying the particulars thereof.
e. Voluntary Termination by Executive. In addition to his
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other rights to terminate under this Agreement, Executive may
voluntarily terminate employment during the term of this
Agreement upon at least sixty (60) days prior written notice
to the President and CEO or Board, in which case Executive
shall receive only his compensation, vested rights and
employee benefits up to the date of his termination.
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f. Without Cause or With Good Reason.
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i. In addition to termination pursuant to
Sections 11(a) through 11(e) the Board, may, by written
notice to Executive, immediately terminate his employment
at any time for a reason other than Cause (a termination
"Without Cause") and Executive may, by written notice to
the Board, immediately terminate this Agreement at any
time within ninety (90) days following an event
constituting "Good Reason" as defined below (a
termination "With Good Reason").
ii. Subject to Section 12 of this Agreement,
in the event of termination under this Section 11(f),
Executive shall be entitled to receive a payment equal to
the base salary (determined by reference to the
Executive's base salary on the termination date) and
bonuses (determined by reference to the Executive's
average bonus over the three (3) years preceding his
termination date or such lesser period as he was employed
by the Bank) that would otherwise have been payable over
the remaining term of the Agreement. Such amount shall be
paid in one lump sum within ten (10) calendar days of
such termination. Also, in such event, Executive shall,
for the remaining term of the Agreement, receive the
benefits he would have received during the remaining term
of the Agreement under any retirement programs (whether
tax-qualified or non-qualified) in which Executive
participated prior to his termination (with the amount of
the benefits determined by reference to the benefits
received by the Executive or accrued on his behalf under
such programs during the twelve (12) months preceding his
termination) and continue to participate in any benefit
plans of the Bank that provide health (including medical
and dental), life, or similar coverage upon terms no less
favorable than the most favorable terms provided to
senior executives of the Bank during such period. In the
event that the Bank are unable to provide such coverage
by reason of Executive no longer being an employee, the
Bank shall provide Executive with comparable coverage on
an individual policy basis.
iii. "Good Reason" shall exist if, without
Executive's express written consent, the Bank materially
breaches any of their respective obligations under this
Agreement. Without limitation, such a material breach
shall be deemed to occur upon any of the following:
(1) A material reduction in
Executive's responsibilities or authority in
connection with his employment with the Bank;
(2) Assignment to Executive of duties of
a non-executive nature or duties for which he is
not reasonably equipped by his skills and
experience;
(3) A reduction in salary or benefits
contrary to the terms of this Agreement, or,
following a Change in Control as defined in
Section 12 of this Agreement, any reduction in
salary or material reduction in benefits below
the amounts to which he was entitled prior to the
Change in Control;
(4) Termination of incentive and benefit
plans, programs or arrangements, or reduction of
Executive's participation to such an extent as to
materially reduce their aggregate value below
their aggregate value as of the Effective Date;
or
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(5) A requirement that Executive relocate
his principal business office or his principal
place of residence outside of the area consisting
of a twenty-five (25) mile radius from the
current central office of the Knoxville Region
and any branch of the Bank, or the assignment to
Executive of duties that would reasonably require
such a relocation; or
iv. Notwithstanding the foregoing, a reduction
or elimination of Executive's benefits under one or more
benefit plans maintained by the Bank and/or the Company
as part of a good faith, overall reduction or elimination
of such plans or benefits thereunder applicably to all
participants in a manner that does not discriminate
against Executive (except as such discrimination may be
necessary to comply with law) shall not constitute an
event of Good Reason or a material breach of this
Agreement, provided that benefits of the type or to the
general extent as those offered under such plans prior to
such reduction or elimination are not available to other
officers of the Bank or any company that controls either
of them under a plan or plans in or under which Executive
is not entitled to participate.
12. TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL.
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a. For purposes of this Agreement, a "Change in Control"
shall be deemed to occur on the earliest of:
(i) Merger: The Company merges into or consolidates with
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another corporation, or merges another corporation
into the Company, and as a result less than a
majority of the combined voting power of the
resulting corporation immediately after the merger or
consolidation is held by persons who were
stockholders of the Company immediately before the
merger or consolidation;
(ii) Acquisition of Significant Share Ownership: a
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report on Schedule 13D or another form or schedule
(other than Schedule 13G) is filed or is required to
be filed under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule
discloses that the filing person or persons acting in
concert has or have become the beneficial owner of
25% or more of a class of the Company's voting
securities, but this clause (ii) shall not apply to
beneficial ownership of Company voting shares held in
a fiduciary capacity by an entity of which the
Company directly or indirectly beneficially owns 50%
or more of its outstanding voting securities;
(iii) Change in Board Composition: during any period of
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two consecutive years, individuals who constitute the
Company's Board of Directors at the beginning of the
two-year period cease for any reason to constitute at
least a majority of the Company's Board of Directors;
provided, however, that for purposes of this clause
(iii) each director who is first elected by the board
(or first nominated by the board for election by
stockholders) by a vote of at least two-thirds of the
directors who were directors at the beginning of the
period shall be deemed to have been a director at the
beginning of the two-year period; or
(iv) Sale of Assets: Company sells to a third party all or
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substantially all of the Company's assets.
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b. Termination. If within the period ending two years after
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a Change in Control, (i) the Bank shall terminate the
Executive's employment Without Cause, or (ii) Executive
voluntarily terminates his employment With Good Reason, the
Bank shall, within ten calendar days of the termination of
Executive's employment, make a lump-sum cash payment to him
equal to 2.99 times the Executive's average Annual
Compensation over the five (5) most recently completed
calendar years ending with the year immediately preceding the
effective date of the Change in Control (or such lesser number
of completed calendar years as the Executive has been employed
by the Bank). In determining Executive's average Annual
Compensation, Annual Compensation shall include base salary
and any other taxable income, including but not limited to
amounts related to the granting, vesting or exercise of
restricted stock or stock option awards, commissions, bonuses
(whether paid or accrued for the applicable period), as well
as, retirement benefits, director or committee fees and fringe
benefits paid or to be paid to Executive or paid for
Executive's benefit during any such year, profit sharing,
employee stock ownership plan and other retirement
contributions or benefits, including to any tax-qualified plan
or arrangement (whether or not taxable) made or accrued on
behalf of Executive of such year. The cash payment made under
this Section 12(b) shall be made in lieu of any payment also
required under Section 11(f) of this Agreement because of a
termination in such period. Executive's rights under Section
11(f) are not otherwise affected by this Section 12. Also, in
such event, the Executive shall, for a thirty-six (36) month
period following his termination of employment, receive the
benefits he would have received over such period under any
retirement programs (whether tax-qualified or nonqualified) in
which the Executive participated prior to his termination
(with the amount of the benefits determined by reference to
the benefits received by the Executive or accrued on his
behalf under such programs during the twelve (12) months
preceding the Change in Control) and continue to participate
in any benefit plans of the Bank that provide health
(including medical and dental), life, or similar coverage upon
terms no less favorable than the most favorable terms provided
to senior executives during such period. In the event that the
Bank are unable to provide such coverage by reason of the
Executive no longer being an employee, the Bank shall provide
the Executive with comparable coverage on an individual
policy.
c. The provisions of Sections 12 and Sections 14 through 25,
including the defined terms used is such sections, shall
continue in effect until the later of the expiration of this
Agreement or two years following a Change in Control.
13. INDEMNIFICATION AND LIABILITY INSURANCE.
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a. Indemnification. The Bank agrees to indemnify Executive
(and his heirs, executors, and administrators), and to advance
expenses related thereto, to the fullest extent permitted
under applicable law and regulations against any and all
expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his having
been a director or executive of the Bank or any of their
subsidiaries (whether or not he continues to be a director or
executive at the time of incurring any such expenses or
liabilities) such expenses and liabilities to include, but not
be limited to, judgments, court costs, and attorneys' fees and
the cost of reasonable settlements, such settlements to be
approved by the Board, if such action is brought against
Executive in his capacity as an executive or director of the
Bank or any of their subsidiaries. Indemnification for expense
shall not extend to matters for which the Executive has been
terminated for Cause. Nothing contained herein shall be deemed
to provide indemnification prohibited by applicable law or
regulation. Notwithstanding anything herein to the contrary,
the obligations of this Section 13 shall survive the term of
this Agreement by a period of six (6) years.
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b. Insurance. During the period in which indemnification of
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Executive is required under this Section, the Company and the
Bank shall provide the Executive (and his heirs, executors,
and administrators) with coverage under a directors' and
Executives' liability policy at the expense of the Bank, at
least equivalent to such coverage provided to directors and
senior Executives of the Bank.
14. REIMBURSEMENT OF EXECUTIVE'S EXPENSES TO ENFORCE THIS AGREEMENT.
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The Bank shall reimburse the Executive for all out-of-pocket expenses,
including, without limitation, reasonable attorneys' fees, incurred by the
Executive in connection with successful enforcement by the Executive of the
obligations of the Bank to the Executive under this Agreement. Successful
enforcement shall mean the grant of an award of money or the requirement that
the Bank take some action specified by this Agreement (i) as a result of court
order; or (ii) otherwise by the Bank following an initial failure of and the
Bank to pay such money or take such action promptly after written demand
therefor from the Executive stating the reason that such money or action was due
under this Agreement at or prior to the time of such demand.
15. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
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and benefits pursuant to Section 12 of this Agreement, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Bank, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits pursuant to Section 12 shall be reduced or
revised, in the manner determined by the Executive, by the amount, if any, which
is the minimum necessary to result in no portion of the payments and benefits
under Section 12 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.
The determination of any reduction in the payments and benefits to be made
pursuant to Section 12 shall be based upon the opinion of the Bank's independent
public accountants and paid for by the Bank. In the event that the Bank and/or
the Executive do not agree with the opinion of such counsel, (i) the Bank shall
pay to the Executive the maximum amount of payments and benefits pursuant to
Section 12, as selected by the Executive, which opinion indicates there is a
high probability of such payments and benefits being non-deductible to the Bank
and subject to the imposition of the excise tax imposed under Section 4999 of
the Code and (ii) the Bank may request, and the Executive shall have the right
to demand that they request, a ruling from the IRS as to whether the disputed
payments and benefits pursuant to Section 12 have such consequences. Any such
request for a ruling from the IRS shall be promptly prepared and filed by the
Bank, but in no event later than thirty (30) days from the date of the opinion
of counsel referred to above, and shall be subject to the Executive's approval
prior to filing, which shall not be unreasonably withheld. The Bank and the
Executive agree to be bound by any ruling received from the IRS and to make
appropriate payments to each other to reflect any such rulings, together with
interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code. Nothing contained herein shall result in a reduction of any payments
or benefits to which the Executive may be entitled upon termination of
employment other than pursuant to Section 12 hereof, or a reduction in the
payments and benefits specified in Section 12 below zero.
16. INJUNCTIVE RELIEF. If there is a breach or threatened breach of
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Section 10 of this Agreement, the parties agree that there is no adequate remedy
at law for such breach, and that the Bank shall be entitled to injunctive relief
restraining the Executive from such breach or threatened breach, but such relief
shall not be the exclusive remedy hereunder for such breach. The parties hereto
likewise agree that the Executive, without limitation, shall be entitled to
injunctive relief to enforce the obligations of the Bank under this Agreement.
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17. SUCCESSORS AND ASSIGNS.
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a. This Agreement shall inure to the benefit of and be binding
upon any corporate or other successor of the Company and 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 Company and the Bank.
b. Since the Bank are contracting for the unique and personal
skills of Executive, Executive shall be precluded from
assigning or delegating his rights or duties hereunder without
first obtaining the written consent of the Company and the
Bank.
18. NOTICES. All notices, requests, demands and other communications in
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connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch United States Post Office, by registered or certified mail, postage
prepaid, addressed to the Bank at their principal business offices and to
Executive at his home address as maintained in the records of the Bank.
19. NO PLAN CREATED BY THIS AGREEMENT. Executive and the Bank expressly
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declare and agree that this Agreement was negotiated among them and that no
provision or provisions of this Agreement are intended to, or shall be deemed
to, create any plan for purposes of the Employee Retirement Income Security Act
or any other law or regulation, and each party expressly waives any right to
assert the contrary. Any assertion in any judicial or administrative filing,
hearing, or process that such a plan was so created by this Agreement shall be
deemed a material breach of this Agreement by the party making such an
assertion.
20. AMENDMENTS. No amendments or additions to this Agreement shall be
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binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
21. APPLICABLE LAW. Except to the extent preempted by Federal law, the
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laws of the State of Tennessee shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
22. SEVERABILITY. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
23. HEADINGS. Headings contained herein are for convenience of
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reference only.
24. ENTIRE AGREEMENT. This Agreement, together with any understanding
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or modifications thereof as agreed to in writing by the parties, shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, other than written agreements with respect to specific
plans, programs or arrangements described in Sections 5 and 6.
25. REQUIRED PROVISIONS. In the event any of the provisions of this
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Section 25 are in conflict with the terms of this Agreement, this Section 25
shall prevail.
a. The Bank may terminate Executive's employment at any time,
but any termination by the Bank, other than Termination for
Cause, shall not prejudice Executive's right to compensation
or other benefits under this Agreement. Executive shall not
have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 7
hereinabove.
b. If Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank's
affairs by a notice served under Section 8(e)(3) or 8(g)(1) of
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the Federal Deposit Insurance Act, 12 U.S.C. ss.1818(e)(3) or
(g)(1); the Bank's obligations under this contract 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 Executive
all or part of the compensation withheld while their contract
obligations were suspended; and (ii) reinstate (in whole or in
part) any of the obligations which were suspended.
c. If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order
issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. ss.1818(e)(4) or (g)(1), all
obligations of the Bank under this contract shall terminate as
of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
d. If the Bank is in default as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act, 12 U.S.C. ss.1813(x)(1) all
obligations of the Bank under this contract shall terminate as
of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.
e. All obligations of the Bank under this contract shall be
terminated, except to the extent determined that continuation
of the contract is necessary for the continued operation of
the institution: (i) by the Director of the OTS (or his
designee), the FDIC or the Resolution Trust Corporation, at
the time the 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 Federal Deposit Insurance
Act, 12 U.S.C. ss.1823(c); or (ii) by the Director of the OTS
(or his designee) at the time the Director (or his designee)
approves a supervisory merger to resolve problems related to
the operations of the Bank or when the Bank is determined by
the Director to be in an unsafe or unsound condition. Any
rights of the parties that have already vested, however, shall
not be affected by such action.
f. Any payments made to Executive pursuant to this Agreement,
or otherwise, are subject to and conditioned upon compliance
with 12 U.S.C. ss.1828(k) and 12 C.F.R. Section 545.121 and
any rules and regulations promulgated thereunder.
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
Attest: JEFFERSON FEDERAL BANK
/s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxxx
---------------------------- -------------------------------
President and CEO
Witness: EXECUTIVE
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxxxx
