HOME BANCORP OF ELGIN, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of September 26, 1996 by and between HOME BANCORP OF ELGIN, INC., a
publicly held business corporation organized and operating under the laws of the
State of Delaware and having an office at 00 Xxxxx Xxxxxx Xxxxxx, Xxxxx,
Xxxxxxxx 00000-0000 ("Holding Company") and XXXXXX X. XXXXXXX, an individual
residing at 000 Xxxx Xxxxx, Xxxxx, Xxxxxxxx 00000 ("Executive").
W I T N E S S E T H :
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WHEREAS, Executive currently serves the Holding Company in the
capacity of President and Chief Executive Officer; and
WHEREAS, effective as of the date of this Agreement, Home
Federal Savings and Loan Association of Elgin ("Association") has converted from
a federal mutual savings and loan association to a federal stock savings and
loan association and has become the wholly-owned subsidiary of the Holding
Company; and
WHEREAS, the Holding Company desires to assure for itself the
continued availability of the Executive's services and the ability of the
Executive to perform such services with a minimum of personal distraction in the
event of a pending or threatened Change of Control (as hereinafter defined); and
WHEREAS, the Executive is willing to continue to serve the
Holding Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions hereinafter set forth, the Holding Company and
the Executive hereby agree as follows:
SECTION 1. EMPLOYMENT.
The Holding Company agrees to continue to employ the
Executive, and the Executive hereby agrees to such continued employment, during
the period and upon the terms and conditions set forth in this Agreement.
SECTION 2. EMPLOYMENT PERIOD; REMAINING UNEXPIRED
EMPLOYMENT PERIOD.
(a) The terms and conditions of this Agreement shall be and
remain in effect during the period of employment established under this section
2 ("Employment Period"). The Employment Period shall be for an initial term of
three (3) years beginning on the date of this Agreement and ending on the third
(3rd) anniversary date of this Agreement (each, an
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"Anniversary Date"), plus such extensions, if any, as are provided by the Board
of Directors of the Holding Company ("Board") pursuant to section 2(b).
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the Employment Period shall automatically be extended for one
(1) additional day each day, unless either the Holding Company or the Executive
elects not to extend the Agreement further by giving written notice to the other
party, in which case the Employment Period shall end on the third (3rd)
anniversary of the date on which such written notice is given. For all purposes
of this Agreement, the term "Remaining Unexpired Employment Period" as of any
date shall mean the period beginning on such date and ending on: (i) if a notice
of non-extension has been given in accordance with this section 2(b), the third
(3rd) anniversary of the date on which such notice is given; and (ii) in all
other cases, the third (3rd) anniversary of the date as of which the Remaining
Unexpired Employment Period is being determined. Upon termination of the
Executive's employment with the Holding Company for any reason whatsoever, any
daily extensions provided pursuant to this section 2(b), if not therefore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Holding Company at any time from terminating the Executive's employment during
the Employment Period with or without notice for any reason; PROVIDED, HOWEVER,
that the relative rights and obligations of the Holding Company and the
Executive in the event of any such termination shall be determined under this
Agreement.
SECTION 3. DUTIES.
The Executive shall serve as President and Chief Executive
Officer of the Holding Company, having such power, authority and responsibility
and performing such duties as are prescribed by or under the By-Laws of the
Holding Company and as are customarily associated with such position. The
Executive shall devote his full business time and attention (other than during
holidays, approved vacation periods, and periods of illness or approved leaves
of absence) to the business and affairs of the Holding Company and shall use his
best efforts to advance the interests of the Holding Company.
SECTION 4. CASH COMPENSATION.
In consideration for the services to be rendered by Executive
hereunder, the Holding Company shall pay to him a salary at an initial annual
rate of TWO HUNDRED AND FOURTEEN THOUSAND, SIX HUNDRED AND FIFTY-FIVE DOLLARS
($214,655), payable in approximately equal installments in accordance with the
Company's customary payroll practices for senior officers. The Board shall
review the Executive's annual rate of salary at such times during the Employment
Period as it deems appropriate, but not less frequently than once every twelve
months, and may, in its discretion, approve an increase therein. In addition to
salary, the Executive may receive other cash compensation from the Holding
Company for services hereunder at such times, in such amounts, and on such terms
and conditions, as the Board may determine from time to time.
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SECTION 5. EMPLOYEE BENEFIT PLANS AND PROGRAMS.
During the Employment Period, the Executive shall be treated
as an employee of the Holding Company and shall be entitled to participate in
and receive benefits under any and all qualified or non-qualified retirement,
pension, savings, profit-sharing or stock bonus plans, any and all group life,
health (including hospitalization, medical and major medical), dental, accident
and long-term disability insurance plans, and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Holding Company, in accordance with the terms and conditions of such
employee benefit plans and programs and compensation plans and programs and
consistent with the Holding Company's customary practices.
SECTION 6. INDEMNIFICATION AND INSURANCE.
(a) During the Employment Period and for a period of six (6)
years thereafter, the Holding Company shall cause the Executive to be covered by
and named as an insured under any policy or contract of insurance obtained by it
to insure its directors and officers against personal liability for acts or
omissions in connection with service as an officer or director of the Holding
Company or service in other capacities at the request of the Holding Company.
The coverage provided to the Executive pursuant to this section 6 shall be of
the same scope and on the same terms and conditions as the coverage (if any)
provided to other officers or directors of the Holding Company.
(b) To the maximum extent permitted under applicable law,
during the Employment Period and for a period of six (6) years thereafter, the
Holding Company shall indemnify the Executive against and hold him harmless from
any costs, liabilities, losses and exposures to the fullest extent and on the
most favorable terms and conditions that similar indemnification is offered to
any director or officer of the Holding Company or any subsidiary or affiliate
thereof.
SECTION 7. OUTSIDE ACTIVITIES.
The Executive may serve as a member of the boards of directors
of such business, community and charitable organizations as he may disclose to
and as may be approved by the Board (which approval shall not be unreasonably
withheld); PROVIDED, HOWEVER, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; PROVIDED, HOWEVER, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Holding Company and generally
applicable to all similarly situated executives. The Executive may also serve as
an officer or director of the Association on such terms and conditions as the
Holding Company and the Association may mutually agree upon, and such service
shall not be
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deemed to materially interfere with Executive's performance of his duties
hereunder or otherwise result in a material breach of this Agreement. If
Executive is discharged or suspended, or is subject to any regulatory
prohibition or restriction with respect to participation in the affairs of the
Association, he shall continue to perform services for the Holding Company in
accordance with this Agreement but shall not directly or indirectly provide
services to or participate in the affairs of the Association in a manner
inconsistent with the terms of such discharge or suspension or any applicable
regulatory order.
SECTION 8. WORKING FACILITIES AND EXPENSES.
Executive's principal place of employment shall be at the
Holding Company's executive offices at the address first above written, or at
such other location within a 25-mile radius thereof at which the Holding Company
shall maintain its principal executive offices, or at such other location as the
Holding Company and the Executive may mutually agree upon. The Holding Company
shall provide Executive at his principal place of employment with a private
office, secretarial services, and other support services and facilities suitable
to his position with the Company and necessary or appropriate in connection with
the performance of his assigned duties under this Agreement. The Holding Company
shall provide to Executive for his exclusive use an automobile owned or leased
by the Holding Company and appropriate to his position, to be used in the
performance of his duties hereunder, including commuting to and from his
personal residence. The Holding Company shall reimburse Executive for his
ordinary and necessary business expenses, including, without limitation, all
expenses associated with his business use of the aforementioned automobile, fees
for memberships in such clubs and organizations as Executive and the Holding
Company shall mutually agree are necessary and appropriate for business purpos
es, and his travel and entertainment expenses incurred in connection with the
performance of his duties under this Agreement, in each case upon presentation
to the Holding Company of an itemized account of such expenses in such form as
the Holding Company may reasonably require.
SECTION 9. TERMINATION OF EMPLOYMENT WITH SEVERANCE
BENEFITS.
(a) The Executive shall be entitled to the severance benefits
described herein in the event that his employment with the Holding Company
terminates during the Employment Period under any of the following
circumstances:
(i) Executive's voluntary resignation from employment with the
Holding Company within ninety (90) days following:
(A) the failure of the Board to appoint or re-appoint
or elect or re-elect the Executive to the position stated in
section 3 of this Agreement (or a more senior office) of the
Holding Company;
(B) if the Executive is a member of the Board as of
the date of this Agreement, the failure of the stockholders of
the Holding Company to elect or re-elect the Executive to the
Board or the failure of the Board (or
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the nominating committee thereof) to nominate the Executive
for such election or re-election;
(C) the expiration of a thirty (30) day period
following the date on which the Executive gives written notice
to the Holding Company of its material failure, whether by
amendment of the Holding Company's Or ganization Certificate
or its By-Laws, action of the Board or the Holding Company's
stockholders or otherwise, to vest in the Executive the
functions, duties, or responsibilities prescribed in section 3
of this Agreement, unless, during such thirty (30) day period,
the Holding Company fully cures such failure; or
(D) the expiration of a thirty (30) day period
following the date on which the Executive gives written notice
to the Holding Company of its material breach of any term,
condition or covenant contained in this Agreement (including,
without limitation any reduction of Executive's rate of base
salary in effect from time to time and any change in the terms
and conditions of any compensation or benefit program in which
Executive participates which, either individually or together
with other changes, has a material adverse effect on the
aggregate value of his total compensation package), unless,
during such thirty (30) day period, the Holding Company fully
cures such failure; or
(ii) subject to the provisions of section 10, the termination
of Executive's employment with the Company for any other reason not
described in section 9(a);
then, the Holding Company shall provide the benefits and pay to Executive the
amounts described in section 9(b).
(b) Upon the termination of the Executive's employment with
the Holding Company under circumstances described in section 9(a) of this
Agreement, the Holding Company shall pay and provide to Executive (or, in the
event of his death, to his estate):
(i) his earned but unpaid compensation as of the date of the
termination of his employment with the Holding Company, such payment to
be made at the time and in the manner prescribed by law applicable to
the payment of wages but in no event later than thirty (30) days after
termination of employment;
(ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation
plans and pro grams maintained for the benefit of the Holding Company's
officers and employees;
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(iii) continued group life, health (including hospitalization,
medical and major medical), dental, accident and long-term disability
insurance benefits, in addition to that provided pursuant to section
9(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for the Remaining Unexpired Employment Period, coverage
equivalent to the coverage to which he would have been entitled under
such plans (as in effect on the date of his termination of employment,
or, if his termination of employment occurs after a Change of Control,
on the date of such Change of Control, whichever benefits are greater),
if he had continued working for the Holding Company during the
Remaining Unexpired Employment Period at the highest annual rate of
compensation achieved during that portion of the Employment Period
which is prior to Executive's termination of employment with the
Holding Company;
(iv) within thirty (30) days following his termination of
employment with the Holding Company, a lump sum payment, in an amount
equal to the present value of the salary that Executive would have
earned if he had continued working for the Holding Company during the
Remaining Unexpired Employment Period at the highest annual rate of
salary achieved during that portion of the Employment Period which is
prior to Executive's termination of employment with the Holding
Company, where such present value is to be determined using a discount
rate equal to the applicable short-term federal rate prescribed under
section 1274(d) of the Internal Revenue Code of 1986 ("Code"),
compounded using the compounding period corresponding to the Holding
Company's regular payroll periods for its officers, such lump sum to be
paid in lieu of all other payments of salary provided for under this
Agreement in respect of the period following any such termination;
(v) within thirty (30) days following his termination of
employment with the Holding Company, a lump sum payment in an amount
equal to the excess, if any, of:
(A) the present value of the aggregate benefits to
which he would be entitled under any and all qualified and
non-qualified defined benefit pension plans maintained by, or
covering employees of, the Holding Company, if he were
one-hundred percent (100%) vested thereunder and had continued
working for the Holding Company during the Remaining Unexpired
Employment Period, such benefits to be determined as of the
date of termination of employment by adding to the service
actually recognized under such plans an additional period
equal to the Remaining Unexpired Employment Period and by
adding to the compensation recognized under such plans for the
year in which termination of employment occurs all amounts
payable under sections 9(b)(i), (iv) and (vii); over
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(B) the present value of the benefits to which he is
actually entitled under such defined benefit pension plans as
of the date of his termination;
where such present values are to be determined using the mortality
tables prescr ibed under section 415(b)(2)(E)(v) of the Code and a
discount rate, compounded monthly equal to the annualized rate of
interest prescribed by the Pension Benefit Guaranty Corporation for the
valuation of immediate annuities payable under terminating
single-employer defined benefit plans for the month in which the
Executive's termination of employment occurs ("Applicable PBGC Rate");
(vi) within thirty (30) days following his termination of
employment with the Holding Company, a lump sum payment in an amount
equal to the present value of the additional employer contributions (or
if greater in the case of a leveraged employee stock ownership plan or
similar arrangement, the additional assets allocable to him through
debt service, based on the fair market value of such assets at
termination of employment) to which he would have been entitled under
any and all qualified and non-qualified defined contribution plans
maintained by, or covering employees of, the Holding Company, as if he
were one-hundred percent (100%) vested thereunder and had continued
working for the Holding Company during the Remaining Unexpired
Employment Period at the highest annual rate of compensation achieved
during that portion of the Employment Period which is prior to the
Executive's termination of employment with the Holding Company, and
making the maximum amount of employee contributions, if any, re quired
under such plan or plans, such present value to be determined on the
basis of a discount rate, compounded using the compounding period that
corresponds to the frequency with which employer contributions are made
to the relevant plan, equal to the Applicable PBGC Rate; and
(vii) the payments that would have been made to Executive
under any cash bonus or long-term or short-term cash incentive
compensation plan maintained by, or covering employees of, the Holding
Company if he had continued working for the Holding Company during the
Remaining Unexpired Employment Period and had earned a bonus or
incentive award in each calendar year that ends during the Remaining
Unexpired Employment Period in an amount equal to the highest annual
bonus or incentive award actually paid to him in any calendar year
ending during the three-year period ending on the date of termination
of employment.
The Holding Company and the Executive hereby stipulate that the damages which
may be incurred by Executive following any such termination of employment are
not capable of accurate measurement as of the date first above written and that
the payments and benefits contemplated by this section 9(b) constitute
reasonable damages under the circumstances and shall be payable without any
requirement of proof of actual damage and without regard to Executive's efforts,
if any, to mitigate damages. The Holding Company and the Executive further agree
that the Holding Company may condition the payments and benefits (if any) due
under sections 9(b)(iii), (iv), (v), (vi) and (vii) on the receipt of the
Executive's resignation from any and all positions which he
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holds as an officer, director or committee member with respect to the Holding
Company, the Association or any subsidiary or affiliate of either of them.
SECTION 10. TERMINATION WITHOUT ADDITIONAL HOLDING
COMPANY LIABILITY.
In the event that the Executive's employment with the Holding
Company shall terminate during the Employment Period on account of:
(a) the discharge of the Executive for "cause," which, for
purposes of this Agreement shall mean 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 any material
breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community
banking industry; PROVIDED, HOWEVER, that the Executive shall not be
deemed to have been discharged for cause unless and until the following
procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved
by affirmative vote of a majority of the entire Board at a
meeting called and held for such purpose calling for the
Executive's termination for cause and setting forth the
purported grounds for such termination ("Proposed Termination
Resolution");
(ii) as soon as practicable, and in any event within
five (5) days, after adoption of such resolution, the Board
shall furnish to the Executive a written notice of termination
which shall be accompanied by a certified copy of the Proposed
Termination Resolution ("Notice of Proposed Termination");
(iii) the Executive shall be afforded a reasonable
opportunity to to make oral and written presentations to the
members of the Board, on his own behalf, or through a
representative, who may be his legal counsel, to refute the
grounds set forth in the Proposed Termination Resolution at
one or more meetings of the Board to be held no sooner than
fifteen (15) days and no later than thirty (30) days after the
Executive's receipt of the Proposed Termination Notice
("Termination Hearings"); and
(iv) within ten (10) days following the end of the
Termination Hearings, the Board shall adopt a resolution duly
approved by affirmative vote of a majority of the entire Board
at a meeting called and held for such purpose (A) finding that
in the good faith opinion of the Board the grounds for
termination set forth in the Proposed Termination Resolution
exist and (B) terminating the Executive's employment
("Termination Resolution"); and
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(v) as promptly as practicable, and in any event
within one (1) business day after adoption of the Termination
Resolution, the Board shall furnish to the Executive written
notice of termination, which notice shall include a copy of
the Termination Resolution and specify an effective date of
termination that is not later than the date on which such
notice is given;
(b) the Executive's voluntary resignation from employment with
the Holding Company for reasons other than those specified in section
9(a);
(c) the Executive's death; or
(d) a determination that the Executive is eligible for
long-term disability benefits under the Holding Company's long-term
disability insurance program or, if there is no such program, under the
federal Social Security Act;
then the Holding Company shall have no further obligations under this Agreement,
other than the payment to the Executive (or, in the event of his death, to his
estate) of his earned but unpaid salary as of the date of the termination of his
employment, and the provision of such other benefits, if any, to which he is
entitled as a former employee under the employee benefit plans and programs and
compensation plans and programs maintained by, or covering employees of, the
Holding Company.
(e) For purposes of section 10(a), no act or failure to act,
on the part of the Executive, shall be considered "willful" unless it is done,
or omitted to be done, by the Executive in bad faith or without reasonable
belief that the Executive's action or omission was in the best interests of the
Holding Company. Any act, or failure to act, based upon authority given pursuant
to a resolution duly adopted by the Board or based upon the written advice of
counsel for the Holding Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Holding Company. The cessation of employment of the Executive shall not be
deemed to be for "cause" within the meaning of section 10(a) unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of three-fourths of the non-employee members of
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to Executive and Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in section 10(a) above, and specifying the particulars thereof in
detail.
SECTION 11. TERMINATION UPON OR FOLLOWING A CHANGE OF
CONTROL.
(a) A Change of Control of the Holding Company ("Change of
Control") shall be deemed to have occurred upon the happening of any of the
following events:
(i) approval by the stockholders of the Holding Company of a
transaction that would result in the reorganization, merger or
consolidation of the
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Holding Company, respectively, with one or more other persons, other
than a transaction following which:
(A) at least fifty-one percent (51%) of the equity
ownership interests of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934,
as amended ("Exchange Act") in substantially the same relative
proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule
13d-3 promulgated under the Exchange Act) at least fifty-one
percent (51%) of the outstanding equity ownership interests in
the Holding Company; and
(B) at least fifty-one percent (51%) of the
securities entitled to vote generally in the election of
directors of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially the same
relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule
13d-3 promulgated under the Exchange Act) at least fifty-one
percent (51%) of the securities entitled to vote generally in
the election of directors of the Holding Company;
(ii) the acquisition of all or substantially all of the assets
of the Holding Company or beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent
(25%) or more of the outstanding securities of the Holding Company
entitled to vote generally in the election of directors by any person
or by any persons acting in concert, or approval by the stockholders of
the Holding Company of any transaction which would result in such an
acquisition;
(iii) a complete liquidation or dissolution of the Holding
Company, or approval by the stockholders of the Holding Company of a
plan for such liquidation or dissolution;
(iv) the occurrence of any event if, immediately following
such event, at least fifty percent (50%) of the members of the board of
directors of the Holding Company do not belong to any of the following
groups:
(A) individuals who were members of the board of
directors of the Holding Company on the date of this
Agreement; or
(B) individuals who first became members of the board
of directors of the Holding Company after the date of this
Agreement either:
(I) upon election to serve as a member of
the board of directors of the Holding Company by
affirmative vote of three-
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quarters of the members of such board, or of a
nominating committee thereof, in office at the time
of such first election; or
(II) upon election by the stockholders of
the Holding Company to serve as a member of the board
of directors of the Holding Company, but only if
nominated for election by affirmative vote of
three-quarters of the members of such board, or of a
nominating committee thereof, in office at the time
of such first nomination;
PROVIDED, HOWEVER, that such individual's election or
nomination did not result from an actual or threatened
election contest (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents
(within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf
of the board of directors of the Holding Company; or
(v) any event which would be described in section 11(a)(i),
(ii), (iii) or (iv) if the term "Association" were substituted for the
term "Holding Company" therein.
In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Holding Company, the
Association, or a subsidiary of either of them, by the Holding Company, the
Association, or a subsidiary of either of them, or by any employee benefit plan
maintained by any of them. For purposes of this section 11(a), the term "person"
shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the
Exchange Act.
(b) In the event of a Change of Control, the Executive shall
be entitled to the payments and benefits contemplated by section 9(b) in the
event of his termination employment with the Holding Company under any of the
circumstances described in section 9(a) of this Agreement or under any of the
following circumstances:
(i) resignation, voluntary or otherwise, by the Executive at
any time during the Employment Period following his demotion, loss of
title, office or significant authority or responsibility, or following
any material reduction in any element of his compensation and benefits;
(ii) resignation, voluntary or otherwise, by the Executive at
any time during the Employment Period following (A) any relocation of
his principal place of employment outside of a 25-mile radius of the
principal place of employment immediately prior to the Change of
Control that would require a relocation of his
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residence in order to be able to commute to such new place of
employment within a commuting time not in excess of the greater of
sixty (60) minutes or the Executive's commuting time prior to the
Change of Control or (B) any material adverse change in working
conditions at such principal place of employment; or
(iii) resignation, voluntary or otherwise, by the Executive at
any time during the Employment Period following the failure of any
successor to the Holding Company in the Change of Control to include
the Executive in any compensation or benefit program maintained by it
or covering any of its executive officers, unless the Executive is
already covered by a substantially similar plan of the Holding Company
which is at least as favorable to him.
SECTION 12. TAX INDEMNIFICATION.
(a) This section 12 shall apply if the Executive's employment
is terminated upon or following (i) a Change of Control (as defined in section
11 of this Agreement); or (ii) a change "in the ownership or effective control"
of the Holding Company or the Association or "in the ownership of a substantial
portion of the assets" of the Holding Company or the Association within the
meaning of section 280G of the Code. If this Section 12 applies, then, if for
any taxable year, the Executive shall be liable for the payment of an excise tax
under section 4999 of the Code with respect to any payment in the nature of
compensation made by the Holding Company, the Association or any direct or
indirect subsidiary or affiliate of the Holding Company or the Association to
(or for the benefit of) the Executive, the Holding Company shall pay to
Executive an amount equal to X determined under the following formula:
X = E x P
------------------------------------
1 - [(FI x (1 - SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under
section 4999 of the Code;
P = the amount with respect to which such excise tax is
assessed, determined without regard to this section
12;
FI = the highest marginal rate of income tax applicable to
Executive under the Code for the taxable year in
question;
SLI = the sum of the highest marginal rates of income tax
applicable to Executive under all applicable state
and local laws for the taxable year in question; and
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M = the highest marginal rate of Medicare tax applicable
to Executive under the Code for the taxable year in
question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) the Executive under the terms of this Agreement, or
otherwise, and on which an excise tax under section 4999 of the Code will be
assessed, the payment determined under this section 12(a) shall be made to the
Executive on the earlier of (i) the date the Holding Company, the Association or
any direct or indirect subsidiary or affiliate of the Holding Company or the
Association is required to withhold such tax, or (ii) the date the tax is
required to be paid by the Executive.
(b) Notwithstanding anything in this section 12 to the
contrary, in the event that Executive's liability for the excise tax under
section 4999 of the Code for a taxable year is subse quently determined to be
different than the amount determined by the formula (X + P) x E, where X, P and
E have the meanings provided in section 12(a), the Executive or the Holding
Company, as the case may be, shall pay to the other party at the time that the
amount of such excise tax is finally determined, an appropriate amount, plus
interest, such that the payment made under section 12(a), when increased by the
amount of the payment made to Executive under this section 12(b) by the Holding
Company, or when reduced by the amount of the payment made to the Holding
Company under this section 12(b) by the Executive, equals the amount that should
have properly been paid to Executive under section 12(a). The interest paid
under this section 12(b) shall be determined at the rate provided under section
1274(b)(2)(B) of the Code. To confirm that the proper amount, if any, was paid
to Executive under this section 12, Executive shall furnish to the Holding
Company a copy of each tax return which reflects a liability for an excise tax
payment made by the Holding Company, at least 20 days before the date on which
such return is required to be filed with the Internal Revenue Service.
SECTION 13. COVENANT NOT TO COMPETE.
In the event of the Executive's termination of employment with
the Holding Company prior to the expiration of the Employment Period, for a
period of one (1) year following the date of his termination of employment with
the Holding Company (or, if less, for the Remaining Unexpired Employment
Period), the Executive shall not, without the written consent of the Holding
Company, become an officer, employee, consultant, director or trustee of any
competitor (as herein defined) if in this capacity he would be working within
one hundred (100) miles of the place where the headquarters of the Holding
Company are located on the date of the Executive's termination of employment.
For this purpose, a "competitor" is any savings bank, savings and loan
association, savings and loan holding company, bank or bank holding company, or
any direct or indirect subsidiary or affiliate of any such entity. This section
13 shall not apply if Executive's employment is terminated without cause or due
to death or voluntary resignation as described in section 9(a). If the
Executive's employment shall be terminated on account of disability as provided
in section 10(d) of this Agreement, this section 13 shall not apply if (a) the
Executive first offers, by written notice, to accept a similar position with, or
perform similar services for, the Holding Company on substantially the same
terms and conditions proposed by the competitor and (b) the Holding Company
declines to accept such offer within ten (10) days after such notice is given.
Page 13 of 19
SECTION 14. CONFIDENTIALITY.
Unless the Executive obtains the prior written consent of the
Holding Company, he shall keep confidential and shall refrain from using for the
benefit of himself, or any person or entity other than the Holding Company or
any entity which is a subsidiary of the Holding Company or of which the Holding
Company is a subsidiary, any material document or information obtained from the
Holding Company, or from its parent or subsidiaries, in the course of his
employment with any of them concerning their properties, operations or business
(unless such document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made available to
the public through no fault of his own) until the same ceases to be material (or
becomes so ascertainable or available); PROVIDED, HOWEVER, that nothing in this
section 14 shall prevent Executive, with or without the Holding Company's
consent, from participating in or disclosing documents or information in
connection with any judicial or administrative investigation, inquiry or
proceeding to the extent that such participation or disclosure is required under
applicable law.
SECTION 15. SOLICITATION.
Executive hereby covenants and agrees that, for a period of
one (1) year following his termination of employment with the Holding Company,
he shall not, without the written consent of the Holding Company, either
directly or indirectly:
(a) solicit, offer employment to, or take any other action
intended, or that a reasonable person acting in like circumstances
would expect, to have the effect of causing any officer or employee of
the Holding Company, the Association or any affiliate, as of the date
of this Agreement, of either of them, to terminate his or his
employment and accept employment or become affiliated with, or provide
services for compensation in any capacity whatsoever to, any savings
bank, savings and loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged in the business
of accepting deposits and making loans, doing business within one
hundred (100) miles of the headquarters of the Holding Company, the
Association or any affiliate, as of the date of this Agreement, of
either of them;
(b) provide any information, advice or recommendation with
respect to any such officer or employee of any savings bank, savings
and loan association, bank, bank holding company, savings and loan
holding company, or other institution engaged in the business of
accepting deposits and making loans, doing business within one hundred
(100) miles of the headquarters of the Holding Company, the
Association, or any affiliate, as of the date of this Agreement, of
either of them, that is intended, or that a reasonable person acting in
like circumstances would expect, to have the effect of causing any
officer or employee of the Holding Company, the Association, or any
affiliate, as of the date of this Agreement, of either of them, to
terminate his employment and accept employment
Page 14 of 19
or become affiliated with, or provide services for compensation in any
capacity whatsoever to, any savings bank, savings and loan association,
bank, bank holding company, savings and loan holding company, or other
institution engaged in the business of accepting deposits and making
loans, doing business within one hundred (100) miles of the
headquarters of the Holding Company, the Association, or any affiliate,
as of the date of this Agreement, of either of them; or
(c) solicit, provide any information, advice or recommendation
or take any other action intended, or that a reasonable person acting
in like circumstances would expect, to have the effect of causing any
customer of the Holding Company to terminate an existing business or
commercial relationship with the Holding Company.
SECTION 16. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR
PROGRAMS.
The termination of Executive's employment during the term of
this Agreement or thereafter, whether by the Holding Company or by the
Executive, shall have no effect on the rights and obligations of the parties
hereto under the Holding Company's qualified or non-qualified retirement,
pension, savings, thrift, profit-sharing or stock bonus plans, group life,
health (includ ing hospitalization, medical and major medical), dental, accident
and long term disability insurance plans or such other employee benefit plans or
programs, or compensation plans or programs, as may be maintained by, or cover
employees of, the Holding Company from time to time.
SECTION 17. SUCCESSORS AND ASSIGNS.
This Agreement will inure to the benefit of and be binding
upon the Executive, his legal representatives and testate or intestate
distributees, and the Holding Company and its successors and assigns, including
any successor by merger or consolidation or a statutory receiver or any other
person or firm or corporation to which all or substantially all of the assets
and business of the Holding Company may be sold or otherwise transferred.
Failure of the Holding Company to obtain from any successor its express written
assumption of the Holding Company's obligations hereunder at least sixty (60)
days in advance of the scheduled effective date of any such succession shall be
deemed a material breach of this Agreement.
SECTION 18. NOTICES.
Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
Page 15 of 19
If to the Executive:
Xx. Xxxxxx X. Xxxxxxx
000 Xxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
If to the Holding Company:
Home Bancorp of Elgin, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Attention: BOARD OF DIRECTORS --
NON-EMPLOYEE DIRECTORS
WITH A COPY TO:
Xxxxxxx Xxxxxxxx & Xxxx
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. XXXXXX XXXXXX, ESQ.
SECTION 19. INDEMNIFICATION FOR ATTORNEYS' FEES.
The Holding Company shall indemnify, hold harmless and defend
the Executive against reasonable costs, including legal fees, incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved, as a result of his efforts, in good faith, to defend or enforce the
terms of this Agreement; PROVIDED, HOWEVER, that the Executive shall have
substantially prevailed on the merits pursuant to a judgment, decree or order of
a court of competent jurisdiction or of an arbitrator in an arbitration
proceeding, or in a settlement. For purposes of this Agreement, any settlement
agreement which provides for payment of any amounts in settlement of the Holding
Company's obligations hereunder shall be conclusive evidence of Executive's
entitlement to indemnification hereunder, and any such indemnification payments
shall be in addition to amounts payable pursuant to such settlement agreement,
unless such settlement agreement expressly provides otherwise.
SECTION 20. SEVERABILITY.
A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof.
Page 16 of 19
SECTION 21. WAIVER.
Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
SECTION 23. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced
in accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the State of
Illinois applicable to contracts entered into and to be performed entirely
within the State of Illinois.
SECTION 24. HEADINGS AND CONSTRUCTION.
The headings of sections in this Agreement are for convenience
of reference only and are not intended to qualify the meaning of any section.
Any reference to a section number shall refer to a section of this Agreement,
unless otherwise stated.
SECTION 25. ENTIRE AGREEMENT; MODIFICATIONS.
This instrument contains the entire agreement of the parties
relating to the subject matter hereof, and supersedes in its entirety any and
all prior agreements, understandings or rep resentations relating to the subject
matter hereof. No modifications of this Agreement shall be
valid unless made in writing and signed by the parties hereto.
SECTION 26. GUARANTEE.
The Holding Company hereby agrees to guarantee the payment by
the Association of any benefits and compensation to which Executive is or may be
entitled to under the terms and conditions of the employment agreement dated as
of September 26, 1996 between the Association and the Executive, a copy of which
is attached hereto as Exhibit A ("Association Agreement").
Page 17 of 19
SECTION 27. NON-DUPLICATION.
In the event that the Executive shall perform services for the
Association or any other direct or indirect subsidiary of the Holding Company,
any compensation or benefits provided to Executive by such other employer shall
be applied to offset the obligations of the Holding Company hereunder, it being
intended that this Agreement set forth the aggregate compensation and benefits
payable to Executive for all services to the Holding Company and all of its
direct or indirect subsidiaries.
SECTION 28. REQUIRED REGULATORY PROVISIONS.
Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Holding Company, whether pursuant to this Agreement
or otherwise, are subject to and conditioned upon their compliance with section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. ss.1828(k), and any
regulations promulgated thereunder.
IN WITNESS WHEREOF, the Holding Company has caused this
Agreement to be executed and Executive has hereunto set his hand, all as of the
day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
ATTEST: HOME BANCORP OF ELGIN, INC.
By /s/ Xxxxxxxx X. Xxxxxxxxx
-------------------------
Secretary By /s/ Xxxxx X. X'Xxxxxx
-------------------------
NAME: Xxxxx X. X'Xxxxxx
TITLE: Chairman, Compensation
Committee
[Seal]
Page 18 of 19
STATE OF ILLINOIS )
: ss.:
COUNTY OF )
On this 15th day of January, 1998, before me personally came
XXXXXX X. XXXXXXX, to me known, and known to me to be the individual described
in the foregoing instrument, who, being by me duly sworn, did depose and say
that he resides at the address set forth in said instrument, and that he signed
his name to the foregoing instrument.
/s/ Xxxx X. Xxxx
------------------------------
Notary Public
[SEAL]
STATE OF ILLINOIS )
: ss.:
COUNTY OF )
On this 15th day of January, 1998, before me personally came
Xxxxx X. X'Xxxxxx, to me known, who, being by me duly sworn, did depose and say
that he resides at 000 Xxxxxxxx Xxx., Xxxxx, XX 00000, that he is a member of
the Board of Directors of HOME BANCORP OF ELGIN, INC., the Delaware corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such seal; that
it was so affixed by order of the Board of Directors of said corporation; and
that he signed his name thereto by like order.
/s/ Xxxx X. Xxxx
------------------------------
Notary Public
[SEAL]
Page 19 of 19
