Contract
AGREEMENT
dated this 1st
day of
July 2006 between Citizens Financial Bank (the "Bank"), a federally chartered
savings bank, and Xxxxxx X. Xxxxxxx (the "Executive").
WITNESSETH
WHEREAS,
the Executive is presently an officer of CFS Bancorp, Inc. (the "Corporation")
and the Bank (together, the "Employers");
WHEREAS,
the Employers desire to be ensured of the Executive's continued active
participation in the business of the Employers;
WHEREAS,
the Corporation and the Bank desire to enter into separate agreements with
the
Executive with respect to his employment by each of the Employers;
and
WHEREAS,
in order to induce the Executive to remain in the employ of the Employers
and in
consideration of the Executive's agreeing to remain in the employ of the
Employers, the parties desire to specify the severance benefits which shall
be
due the Executive by the Bank in the event that his employment with the
Bank is
terminated under specified circumstances;
NOW
THEREFORE, in consideration of the mutual agreements herein contained,
and upon
the other terms and conditions hereinafter provided, the parties hereby
agree as
follows:
| 1) |
Definitions.
|
The
following words and terms shall have the meanings set forth below for the
purposes of this Agreement:
| a) |
Average
Annual Compensation. The
Executive's "Average Annual Compensation" for purposes of this
Agreement
shall be deemed to mean the average Base Salary, cash bonuses
and amounts
allocated to the Executive under any qualified employee benefit
plans of
the Employers for the preceding three years.
|
| b) |
Base
Salary.
"Base Salary" shall have the meaning set forth in Section 4(a)
hereof.
|
| c) |
Cause.
Termination of the Executive's employment for "Cause" shall mean
termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation
of any
law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order or material breach
of any
provision of this Agreement.
|
| d) |
Change
in Control. “Change
in Control” means the occurrence of any of the following: (i) an event
that would be required to be reported in response to Item 5.01
of Form 8-K
or Item 6(e) of Schedule 14A of Regulation 14A pursuant to the
1934
Securities and Exchange Act of 1934, as amended (1934 Act), or
any
successor thereto, whether or not any class of securities of
the
Corporation is registered under the 1934 Act; (ii) any “person” is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, of securities of the Corporation
representing 20% or more of the combined voting power of the
Corporation’s
then outstanding securities; or (iii) during any period of thirty-six
consecutive months, individuals who at the beginning of such
period
constitute the Board of Directors of the Corporation cease for
any reason
to constitute at least a majority thereof unless the election,
or the
nomination for election by stockholders, of each new director
was approved
by a vote of at least two-thirds of the directors then still
in office who
were directors at the beginning of the period.
|
| i) |
For
purposes of the definition of “Change in Control,” a Person or group of
Persons does not include the CFS Bancorp, Inc. Employee Stock
Ownership
Plan Trust which forms a part of the CFS Bancorp, Inc. Employee
Stock
Ownership Plan (the “ESOP”), or any other employee benefit plan,
subsidiary or affiliate of the Corporation, and the outstanding
shares of
common stock of the Corporation, on a fully diluted basis, include
all
shares owned by the ESOP, whether allocated or unallocated to
the accounts
of participants, thereunder.
|
| ii) |
For
purposes of the definition of “Change in Control,” the term “Person” means
any natural person, proprietorship, partnership, corporation,
limited
liability company, organization, firm, business, joint venture,
association, trust or other entity and any government agency,
body or
authority.
|
| e) |
Code.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
|
| f) |
Date
of Termination.
"Date of Termination" shall mean (i) if the Executive's employment
is
terminated for Cause or for Disability, the date specified in
the Notice
of Termination, and (ii) if the Executive's employment is terminated
for
any other reason, the date on which a Notice of Termination is
given or as
specified in such Notice.
|
| g) |
Disability.
Termination by the Bank of the Executive's employment based on
"Disability" shall mean termination because of any physical or
mental
impairment which qualifies the Executive for disability benefits
under the
applicable long-term disability plan maintained by the Employers
or any
subsidiary or, if no such plan applies, which would qualify the
Executive
for disability benefits under the Federal Social Security
System.
|
| h) |
Good
Reason. Termination
by the Executive of the Executive's employment for "Good Reason"
shall
mean termination by the Executive within twelve months following
a Change
in Control of the Corporation based
on:
|
2
| i) |
Without
the Executive's express written consent, the failure to elect
or to
re-elect or to appoint or to re-appoint the Executive to the
offices of
Executive Vice President of Retail Banking for the Bank or a
material
adverse change made by the Employers in the Executive's functions,
duties
or responsibilities as an Executive Vice President of the
Bank;
|
| ii) |
Without
the Executive's express written consent, a reduction by either
of the
Employers in the Executive's Base Salary as the same may be increased
from
time to time or, except to the extent permitted by Section 4(b)
hereof, a
reduction in the package of fringe benefits provided to the Executive,
taken as a whole;
|
| iii) |
The
principal executive office of either of the Employers is relocated
more
than ten miles from Munster, Indiana or, without the Executive's
express
written consent, either of the Employers require the Executive
to be based
anywhere other than an area in which the Employers' principal
executive
office is located, except for required travel on business of
the Employers
to an extent substantially consistent with the Executive's present
business travel obligations;
|
| iv) |
Any
purported termination of the Executive's employment for Disability
or
Retirement which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (k) below;
or
|
| vi) |
The
failure by the Bank to obtain the assumption of and agreement
to perform
this Agreement by any successor.
|
| i) |
IRS.“IRS”
shall mean the Internal Revenue
Service.
|
| j) |
Key
Employee.
"Key
Employee"
means an employee who is:
|
| i) |
An
officer of the Corporation having annual compensation greater
than
$140,000;
|
| ii) |
A
five-percent owner of the Corporation;
or
|
| iii) |
A
one-percent owner of the Corporation having an annual compensation
greater
than $150,000.
|
For
purposes of determining who is an officer for purposes of Section 1(j)(i),
no
more than 50 employees (or, if lesser, the greater of three or 10 percent
of the
employees) shall be treated as officers, and those categories of employees
listed in Code Section 414(q)(5) shall be excluded. The
$140,000 amount shall be adjusted at the same time and in the same manner
as
under Code Section 415(d), except that the base period shall be the calendar
quarter beginning July 1, 2001, and any increase under this sentence which
is
not a multiple of $5,000 shall be rounded to the next lower multiple of
$5,000.
3
| k) |
Notice
of Termination.
Any purported termination of the Executive's employment by the
Bank for
any reason, including without limitation for Cause, Disability
or
Retirement, or by the Executive for any reason, including without
limitation for Good Reason, shall be communicated by written
"Notice of
Termination" to the other party hereto. For purposes of this
Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates
the
specific termination provision in this Agreement relied upon,
(ii) sets
forth in reasonable detail the facts and circumstances claimed
to provide
a basis for termination of Executive's employment under the provision
so
indicated, (iii) specifies a Date of Termination, which shall
be not less
than 30 nor more than 90 days after such Notice of Termination
is given,
except in the case of the Bank's termination of Executive's employment
for
Cause, which shall be effective immediately; and (iv) is given
in the
manner specified in Section 11
hereof.
|
| l) |
Retirement.
"Retirement" shall mean voluntary termination by the Executive
after the
Executive attains the age 55, with at least five years of active
service.
|
| m) |
Separation
from Service.
"Separation
from Service"
means the date on which the Executive dies, retires or otherwise
experiences a Termination of Employment with the Corporation.
Provided,
however, a Separation from Service does not occur if the Executive
is on
military leave, sick leave, or other bona fide leave of absence
(such as
temporary employment by the government) if the period of such
leave does
not exceed six months, or if the leave is for a longer period,
so long as
the individual’s right to reemployment with the Corporation is provided
either by statute or by contract. If the period of leave exceeds
six
months and the Executive’s right to reemployment is not provided either by
statute or contract, there shall be a Separation from Service
on the first
date immediately following such six-month period. Executive shall
incur a
"Termination
of Employment"
when a termination of employment is incurred under Proposed Treasury
Regulation 1.409A-1(h)(ii) or any final version of such Proposed
Regulation.
|
| n) |
Specified
Employee.
“Specified Employee” means an employee who is a “Key Employee” if the
Corporation’s stock is publicly traded on an established securities
market. An employee shall be a Specified Employee for the twelve-month
period beginning on the April 1st
following any calendar year in which the employee is a Key
Employee.
|
| 2) |
Term
of Employment.
|
| a) |
The
Bank hereby employs the Executive as its Executive Vice President
of
Retail Banking, and the Executive hereby accepts said employment
and
agrees to render such services to the Bank on the terms and conditions
set
forth in this Agreement. The term of this Agreement shall be
a period of
twelve months commencing as of the date hereof (the "Commencement
Date"),
subject to earlier termination as provided herein. Reference
herein to the
term of this Agreement shall refer to both such initial term
and any
extended terms. The Board of Directors of the Bank shall review
on a
periodic basis (and no less
|
4
|
frequently
than annually) whether to permit further extensions of the term
of this
Agreement. As part of such review, the Board of Directors shall
consider
all relevant factors, including the Executive's performance hereunder,
and
shall either expressly approve further extensions of the time
of this
Agreement or decide to provide notice to the
contrary.
|
| b) |
During
the term of this Agreement, the Executive shall perform such
executive
services for the Bank as may be consistent with his titles and
from time
to time assigned to him by the Bank’s Board of Directors.
The Executive further agrees to serve without additional compensation
as
an officer and director of any of the Bank's subsidiaries and
agrees that
any amounts received from such corporation may be offset against
the
amounts due hereunder. In addition, it is agreed that the Bank
may assign
the Executive to one of its subsidiaries for payroll
purposes.
|
| 3) |
Loyalty,
Confidentiality and
Non-Competition
|
| a) |
The
Executive shall devote his full time and best efforts to the
performance
of his employment under this Agreement. During the term of this
Agreement,
the Executive shall not, at any time or place, either directly
or
indirectly engage in any business or activity in competition
with the
business affairs or interests of the Employers or be a director,
officer
or consultant to any bank, savings and loan association, credit
union,
thrift, savings bank, or similar institution in the Chicago
CMSA.
|
| b) |
For
a period of one year from the date of voluntary termination,
or
termination for Cause, the Executive shall not, at any time or
place,
either directly or indirectly engage in any business or activity
in
competition with the business affairs or interests of the Employers
or be
a director, officer or consultant to any bank, savings and loan
association, credit union, thrift, savings bank, or similar institution
in
the Chicago CMSA.
|
| c) |
For
purposes of this Agreement, directly or indirectly engaging in
any
business activity in competition with the business or affairs
of the
Employers includes, but is not limited to, serving or acting
as an owner,
partner, agent, beneficiary, or employee of any person, firm
or corporate
entity so engaged; except that nothing herein contained shall
be deemed to
prevent or limit the right of Executive to invest any of his
surplus funds
in the capital stock or other securities of any corporation whose
stock or
securities are publicly owned or are regularly traded on any
public
exchange, nor shall anything herein contained be deemed to prevent
employee from investing or limit employee's right to invest his
surplus
funds in real estate.
|
| d) |
All
information relating to business of the Employers including,
but not
limited to, that business obtained or serviced by Executive and
all
customer listings, contact lists, expiration cards, asset reports,
instruments, documents, papers and other material used in connection
with
such business, shall be the exclusive property of the Employers.
Executive
shall keep all such information and material confidential; none
of it
shall be
|
5
|
copied,
reproduced or duplicated without the express written permission
of the
Employers, and Executive shall return all material containing
such
information to Employers upon their request or upon termination
of
employment. Executive also agrees that he or she shall not utilize
the
confidential information or trade secrets of the Employers, either
directly or indirectly, for any purposes except performance of
the
Executive's responsibilities and in furtherance of the Employers’
business, unless otherwise expressly authorized by Employers
in writing in
advance.
|
| e) |
Executive
agrees that, during his employment, and for a period of one year
following
the date of his involuntary termination of employment for Cause,
or his
voluntary termination without Good Reason, the
Executive:
|
| i) |
shall
not solicit any of the Employers’ past or current customers or clients for
the benefit of anyone other than Employers or their
affiliates;
|
| ii) |
shall
not divulge the names of any of the Employers’ past or then current
customers to any other person, corporation or
entity;
|
| iii) |
shall
not divulge to anyone, except the Employers or their representatives,
any
information regarding their management strategies, marketing
information
or goals, policies and/or other information regarding the affairs
of the
Employers, all of which Executive is hereby obligated to keep
secret,
however and whenever such information comes to his or her attention;
and
|
| iv) |
shall
not, either directly or indirectly, induce or solicit any person
to leave
the employ of the Employers.
|
| 4) |
Compensation
and Benefits.
|
| a) |
The
Employers shall compensate and pay the Executive for his services
during
the term of this Agreement at a minimum base salary of $171,000
per year
("Base Salary"), which may be increased from time to time in
such amounts
as may be determined by the Boards of Directors of the Employers
and may
not be decreased without the Executive's express written consent.
In
addition to his Base Salary, the Executive shall be entitled
to receive
during the term of this Agreement such bonus payments as may
be determined
by the Boards of Directors of the
Employers.
|
| b) |
During
the term of this Agreement, the Executive shall be entitled to
participate
in and receive the benefits of any pension or other retirement
benefit
plan, profit sharing, stock option, employee stock ownership,
or other
plans, benefits and privileges given to employees and executives
of the
Employers, to the extent commensurate with his then duties and
responsibilities, as fixed by the Boards of Directors of the
Employers.
The Bank shall not make any changes in such plans, benefits or
privileges
which would adversely affect the Executive's rights or benefits
thereunder, unless such change occurs
|
6
|
pursuant
to a program applicable to all executive officers of the Bank
and does not
result in a proportionately greater adverse change in the rights
of or
benefits to the Executive as compared with any other executive
officer of
the Bank. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be
deemed to be
in lieu of the salary payable to the Executive pursuant to Section
4(a)
hereof.
|
| c) |
During
the term of this Agreement, the Executive shall be entitled to
paid annual
vacation in accordance with the policies as established from
time to time
by the Boards of Directors of the Employers. The Executive shall
not be
entitled to receive any additional compensation from the Employers
for
failure to take a vacation, nor shall the Executive be able to
accumulate
unused vacation time from one year to the next, except to the
extent
authorized by the Boards of Directors of the
Employers.
|
| d) |
In
the event the Executive's employment is terminated due to Disability
or
Retirement, and
provided the Employee is not otherwise employed in a position
providing
substantially similar benefits, the Employer will continue, at
its cost
and for the remaining term of this Agreement, life and medical
insurance
coverage for the Executive and his spouse at substantially similar
levels
of coverage and benefits as the Employers provide at such time
for its
then existing senior executives.
|
| e) |
The
Executive's compensation, benefits and expenses shall be paid
by the
Corporation and the Bank in the same proportion as the time and
services
actually expended by the Executive on behalf of each respective
Employer.
|
| f) |
During
the term of the Agreement, the Employers shall provide suitable
office
space, desk,
chairs, filing cabinets, telephones and other usual and customary
office
furniture, fixtures and equipment adequate for the efficient
performance
of the duties assigned to the
Executive.
|
| g) |
During
the term of this Agreement, the Employers shall provide to the
Executive,
at the Employer's cost, all perquisites which other senior executives
of
the Company are otherwise generally entitled to receive.
|
| h) |
During
the term of this Agreement, the Bank
shall provide to Executive the use of an automobile with an average
annual
lease cost not to exceed $10,000 per year. The Bank agrees to
replace the
automobile with a new one at Executive's request no more often
than once
every three years. The Bank shall pay all automobile operating
expenses
incurred by Executive in the performance of Executive's duties.
The Bank
shall procure and maintain in force an automobile liability policy
for the
automobile with coverage, including Executive, in the minimum
amount of
$1,000,000 combined single limit on bodily injury and property
damage.
|
7
| 5) |
Expenses.
The
Employers shall reimburse the Executive or otherwise provide
for or pay
for all reasonable expenses incurred by the Executive in furtherance
of or
in connection with the business of the Employers, including,
but not by
way of limitation, automobile expenses and other traveling expenses,
and
all reasonable entertainment expenses (whether incurred at the
Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by
the Boards of
Directors of the Employers. If such expenses are paid in the
first
instance by the Executive, the Employers shall reimburse the
Executive
therefor.
|
| 6) |
Termination.
|
| a) |
The
Bank shall have the right, at any time upon prior Notice of Termination,
to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability
or
Retirement, and the Executive shall have the right, upon prior
Notice of
Termination, to terminate his employment hereunder for any
reason.
|
| b) |
In
the event that (i) the Executive's employment is terminated by
the Bank
for Cause or (ii) the Executive terminates his employment hereunder
other
than for Disability, Retirement, death or Good Reason, the Executive
shall
have no right pursuant to this Agreement to compensation or other
benefits
for any period after the applicable Date of
Termination.
|
| c) |
In
the event that the Executive's employment is terminated as a
result of
Disability, Retirement or the Executive's death during the term
of this
Agreement, the Executive shall have no right pursuant to this
Agreement to
compensation or other benefits for any period after the applicable
Date of
Termination, except as provided for in Section 4(d)
hereof.
|
| d) |
In
the event that (i) the Executive's employment is terminated by
the Bank
for other than Cause, Disability, Retirement or the Executive's
death or
(ii) such employment is terminated by the Executive (a) due to
a material
breach of this Agreement by the Bank, which breach has not been
cured
within fifteen days after a written notice of non-compliance
has been
given by the Executive to the Employers, or (b) for Good Reason,
then the
Bank shall, subject to the provisions of Section 7 hereof, if
applicable:
|
| i) |
pay
to the Executive, a cash severance amount equal to the Executive's
Average
Annual Compensation paid by the Bank, in two equal installments,
with the
first installment to be paid on the first business day of the
month
following the Executive’s Date of Termination and the second installment
to be paid no later than January 15th
of
the calendar year following the year in which the first installment
was
paid; and
|
| ii) |
maintain
and provide for a period ending at the earlier of (i) the expiration
of
the remaining term of employment pursuant hereto prior to the
Notice of
Termination or (ii) the date of the Executive's full-time employment
by
another employer (provided that the Executive is entitled under
the terms
of such employment to benefits substantially similar to those
described in
this subparagraph, at no cost to the
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8
|
Executive,
the Executive's continued participation in all group insurance,
life
insurance, health and accident insurance, disability insurance
and other
employee benefit plans, programs and arrangements offered by
the Bank in
which the Executive was entitled to participate immediately prior
to the
Date of Termination (excluding (x) stock option and restricted
stock plans
of the Employers, (y) bonuses and other items of cash compensation
included in Average Annual Compensation and (z) other benefits, or
portions thereof, included in Average Annual Compensation), provided
that
in the event that the Executive's participation in any plan,
program or
arrangement as provided in this subparagraph is barred, or during
such
period any such plan, program or arrangement is discontinued
or the
benefits thereunder are materially reduced, the Bank shall arrange
to
provide the Executive with benefits substantially similar to
those which
the Executive was entitled to receive under such plans, programs
and
arrangements immediately prior to the Date of
Termination.
|
| e) |
If
at the time of the Executive’s Separation from Service, for any reason
other than death, the Executive meets the definition of a Specified
Employee, payment of all amounts under subsections 6(d)(i) and
(ii) and
7(a) shall be suspended for six months following the Executive’s
Separation from Service. In such event, the first installment
shall be
paid on the first day following the end of the six-month suspension
period. The second installment shall be paid no later than January
15th
of
the calendar year following the year in which the first installment
was
paid. If the Executive incurs a Separation from Service due to
death,
regardless of whether the Executive meets the definition of a
Specified
Employee, payment of his benefit shall not be suspended. Provided,
however, that the six-month suspension period shall not apply
to the
provision of any group insurance, life insurance, health and
accident
insurance or disability insurance under subsection
6(d)(ii).
|
| 7) |
Limitation
of Benefits under Certain Circumstances. If
the payments and benefits pursuant to Section 6 hereof, 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 payable
by the
Bank pursuant to Section 6 hereof shall be reduced, 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
payable by
the Bank under Section 6 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 parties hereto agree that the present
value
of the payments and benefits payable pursuant to this Agreement
to the
Executive upon termination shall be limited to three (3) times
the
Executive's Average Annual Compensation. The determination of
any
reduction in the payments and benefits to be made pursuant to
Section 6
shall be based upon the opinion of independent counsel selected
by the
Bank's independent public accountants and paid by the Bank. Such
counsel
shall be reasonably acceptable to the Bank and the Executive;
shall
promptly prepare the foregoing opinion, but in no event later
than thirty
(30) days from the Date of Termination; and may use such actuaries
as such
counsel deems necessary or advisable for the purpose. Nothing
contained
herein shall result in a reduction of any payments or benefits
to which
the Executive may be entitled upon
|
9
|
termination
of employment under any circumstances other than as specified
in this
Section 7, or a reduction in the payments and benefits specified
in
Section 6 below zero.
|
| 8) |
Mitigation;
Exclusivity of Benefits.
|
| a) |
The
Executive shall not be required to mitigate the amount of any
benefits
hereunder by seeking other employment or otherwise, nor shall
the amount
of any such benefits be reduced by any compensation earned by
the
Executive as a result of employment by another employer after
the Date of
Termination or otherwise.
|
| b) |
The
specific arrangements referred to herein are not intended to
exclude any
other benefits which may be available to the Executive upon a
termination
of employment with the Employers pursuant to employee benefit
plans of the
Employers or otherwise.
|
| 9) |
Withholding.
All payments required to be made by the Bank hereunder
to the
Executive shall be subject to the withholding of such amounts,
if any,
relating to tax and other payroll deductions as the Bank may
reasonably
determine should be withheld pursuant to any applicable law or
regulation.
|
| 10) |
Assignability.
The Bank may assign this Agreement and its rights and
obligations
hereunder in whole, but not in part, to any corporation, bank
or other
entity with or into which the Bank may hereafter merge or consolidate
or
to which the Bank may transfer all or substantially all of its
assets, if
in any such case said corporation, bank or other entity shall
by operation
of law or expressly in writing assume all obligations of the
Bank
hereunder as fully as if it had been originally made a party
hereto, but
may not otherwise assign this Agreement or its rights and obligations
hereunder. The Executive may not assign or transfer this Agreement
or any
rights or obligations hereunder.
|
| 11) |
Notice.
For
the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall
be deemed to
have been duly given when delivered or mailed by certified or
registered
mail, return receipt requested, postage prepaid, addressed to
the
respective addresses set forth
below:
|
| a) |
To
the Bank:
Corporate
Secretary
|
Citizens
Financial Bank
000
Xxxxx
Xxxx
Xxxxxxx,
Xxxxxxx 00000
| b) |
To
the Corporation: Corporate
Secretary
|
CFS
Bancorp, Inc.
000
Xxxxx
Xxxx
Xxxxxxx,
Xxxxxxx 00000
10
|
To
the Executive:
Xxxxxx
X. Xxxxxxx
|
[Address
Redacted]
| 12) |
Amendment;
Waiver. No
provisions of this Agreement may be modified, waived or discharged
unless
such waiver, modification or discharge is agreed to in writing
and signed
by the Executive and such officer or officers as may be specifically
designated by the Board of Directors of the Bank to sign on its
behalf. No
waiver by any party hereto at any time of any breach by any other
party
hereto of, or compliance with, any condition or provision of
this
Agreement to be performed by such other party shall be deemed
a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior
or subsequent time.
|
| 13) |
Governing
Law. The validity,
interpretation, construction and performance of this Agreement
shall be
governed by the laws of the United States where applicable and
otherwise
by the substantive laws of the State of
Indiana.
|
| 14) |
Nature
of Obligations. Nothing
contained herein shall create or require the Bank to create a
trust of any
kind to fund any benefits which may be payable hereunder, and
to the
extent that the Executive acquires a right to receive benefits
from the
Bank hereunder, such right shall be no greater than the right
of any
unsecured general creditor of the
Bank.
|
| 15) |
Headings.
The
section headings contained in this Agreement are for reference
purposes
only and shall not affect in any way the meaning or interpretation
of this
Agreement.
|
| 16) |
Validity.
The
invalidity or unenforceability of any provision of this Agreement
shall
not affect the validity or enforceability of any other provisions
of this
Agreement, which shall remain in full force and
effect.
|
| 17) |
Counterparts.
This
Agreement may be executed in one or more counterparts, each of
which shall
be deemed to be an original but all of which together shall constitute
one
and the same
instrument.
|
| 18) |
Regulatory
Actions. The
following provisions shall be applicable to the parties to the
extent that
they are required to be included in employment agreements between
a
savings association and its employees pursuant to Section 563.39(b)
of the
Regulations Applicable to All Savings Associations, 12 C.F.R.
§563.39(b),
or any successor thereto, and shall be controlling in the event
of a
conflict with any other provision of this Agreement, including
without
limitation Section 6 hereof.
|
| a) |
If
the Executive is suspended from office and/or temporarily prohibited
from
participating in the conduct of the Employers' affairs pursuant
to notice
served under Section 8(e)(3) or Section 8(g)(1) of the Federal
Deposit
Insurance Act ("FDIA") (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), the
Employers' obligations under this Agreement shall be suspended
as of the
date of service, unless stayed by appropriate proceedings. If the
charges in the
|
11
|
notice
are dismissed, the Employers may, in their discretion: (i) pay
the
Executive all or part of the compensation withheld while its
obligations
under this Agreement were suspended, and (ii) reinstate (in whole
or in
part) any of its obligations which were
suspended.
|
| b) |
If
the Executive is removed from office and/or permanently prohibited
from
participating in the conduct of the Employers' affairs by an
order issued
under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
§§1818(e)(4) and (g)(1)), all obligations of the Employers under
this
Agreement shall terminate as of the effective date of the order,
but
vested rights of the Executive and the Employers as of the date
of
termination shall not be affected.
|
| c) |
If
the Bank is in default, as defined in Section 3(x)(1) of the
FDIA (12
U.S.C. §1813(x)(1)), all obligations under this Agreement shall terminate
as of the date of default, but vested rights of the Executive
and the
Employers as of the date of termination shall not be
affected.
|
| d) |
All
obligations under this Agreement shall be terminated pursuant
to 12 C.F.R.
§563.39(b)(5) (except to the extent that it is determined that
continuation of the Agreement for the continued operation of
the Employers
is necessary): (i) by the Director of the Office of Thrift Supervision
("OTS"), or his/her designee, at the time the Federal Deposit
Insurance
Corporation ("FDIC") enters into an agreement to provide assistance
to or
on behalf of the Bank under the authority contained in Section
13(c) of
the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, or
his/her designee, at the time the Director or his/her designee
approves a
supervisory merger to resolve problems related to operation of
the Bank or
when the Bank is determined by the Director of the OTS to be
in an unsafe
or unsound condition, but vested rights of the Executive and
the Employers
as of the date of termination shall not be
affected.
|
| 19) |
Regulatory
Prohibition. Notwithstanding
any other provision of this Agreement to the contrary, any payments
made
to the Executive pursuant to this Agreement, or otherwise, are
subject to
and conditioned upon their compliance with Section 18(k) of the
Federal
Deposit Insurance Act (12 U.S.C. §1828(k)) and the regulations promulgated
thereunder, including 12 C.F.R. Part 359. In the event of the
Executive's termination of employment with the Bank for Cause,
all
employment relationships and managerial duties with the Bank
shall
immediately cease regardless of whether the Executive remains
in the
employ of the Corporation following such termination. Furthermore,
following such termination for Cause, the Executive shall not,
directly or
indirectly, influence or participate in the affairs or the operations
of
the Bank.
|
| 20) |
Payment
of Costs and Legal Fees and Reinstatement of Benefits.
In
the event any dispute or controversy arising under or in connection
with
the Executive's termination is resolved in favor of the Executive,
whether
by judgment, arbitration or settlement, the Executive shall be
entitled to
the payment of (a) all legal fees incurred by the Executive in
resolving such dispute or controversy, and (2) any back-pay,
including Base Salary, bonuses and any other cash
|
12
|
compensation,
fringe benefits and any compensation and benefits due to the
Executive
under this Agreement
|
| 21) |
Entire
Agreement. This
Agreement embodies the entire agreement between the Bank and
the Executive
with respect to the matters agreed to herein. All prior agreements
between
the Bank and the Executive with respect to the matters agreed
to herein
are hereby superseded and shall have no force or effect. Notwithstanding
the foregoing, nothing contained in this Agreement shall affect
the
agreement of even date being entered into between the Corporation
and the
Executive.
|
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first
above
written.
Attest: CITIZENS
FINANCIAL BANK
/s/
Xxxxxx X. Xxxxxxxx By:
/s/
Xxxxx X.Xxxxx
EXECUTIVE
/s/
Xxxxxx X.
Xxxxxxx
Xxxxxx
X.
Xxxxxxx
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