Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
as of the 1st day of July, 2007, between Emclaire Financial Corp., a
Pennsylvania-chartered bank holding company (the "Corporation"), the Farmers
National Bank of Emlenton, a national banking association (the "Bank") and Xxxxx
X. Xxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is currently employed as Chairman of the Board,
President and Chief Executive Officer of the Corporation and Chairman of the
Board of the Bank (the Corporation and the Bank are referred to together herein
as the "Employers");
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, the Executive is willing to serve the Employers on the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
Employers and the Executive 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
level of compensation paid to the Executive by the Employers or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination (or such shorter period as the Executive was employed) and included
in the Executive's gross income for tax purposes and any income earned and
deferred by the Executive pursuant to any plan or arrangement of the Employers.
(b) Base Salary. "Base Salary" shall have the meaning set forth in
Section 3(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" shall mean a change in the
ownership of the Corporation or the Bank, a change in the effective control of
the Corporation or the Bank or a change in the ownership of a substantial
portion of the assets of the Corporation or the Bank, in each case as provided
under Section 409A of the Code and the regulations thereunder.
(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, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment is terminated for
any other reason, the date specified in such Notice of Termination.
(g) Disability. "Disability" shall mean the Executive (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering employees of the Employers.
(h) Good Reason. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control based on:
(i) any material breach of this Agreement by the
Employers, including without limitation any of the following: (A) a material
diminution in the Executive's base compensation, (B) a material diminution
in the Executive's authority, duties or responsibilities, or (C) any
requirement that the Executive report to a corporate officer or employee of the
Corporation instead of reporting directly to the Board of Directors of the
Corporation, or
(ii) any material change in the geographic location
at which the Executive must perform his services under this Agreement,
including a material change in the Executive's principal place of employment
or the imposition of any requirement that the Executive spend more than
ninety (90) business days per year at a location other than such principal
place of employment;
provided, however, that prior to any termination of employment for Good Reason,
the Executive must first provide written notice to the Corporation within ninety
(90) days of the initial existence of the condition, describing the existence of
such condition, and the Corporation shall thereafter have the right to remedy
the condition within thirty (30) days of the date the Corporation received the
written notice from the Executive. If the Corporation remedies the condition
within such thirty (30) cure period, then no Good Reason shall be deemed to
exist with respect to such condition.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) Notice of Termination. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
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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 the Executive's employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty (30)
nor more than ninety (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.
(k) Retirement. "Retirement" shall mean voluntary termination by the
Executive upon reaching age 65.
2. Term of Employment.
(a) The Employers hereby employ the Executive as Chairman of the Board,
President and Chief Executive Officer of the Corporation and Chairman of the
Board of the Bank and the Executive hereby accepts said employment and agrees to
render such services to the Employers on the terms and conditions set forth in
this Agreement. The term of employment under this Agreement shall be for three
years from July 1, 2007 and, upon approval of the Board of Directors of each of
the Corporation and the Bank, shall extend for an additional year on July 1st of
each subsequent calendar year such that at any time after July 1, 2007 the
remaining term of this Agreement shall be from two to three years, absent notice
of non-renewal as set forth below. Prior to June 1, 2008 and each June 1st
thereafter, the Board of Directors of each of the Corporation and the Bank shall
consider and review (with appropriate corporate documentation thereof, and after
taking into account all relevant factors, including the Executive's performance
hereunder) an extension of the term of this Agreement, and the term shall
continue to extend each year if the Board of Directors approves such extension
unless the Executive gives written notice to the Employers of the Executive's
election not to extend the term, with such written notice to be given not less
than thirty (30) days prior to any such July 1st . If the Board of Directors
elects not to extend the term, it shall give written notice of such decision to
the Executive not less than thirty (30) days prior to any such July 1st. If any
party gives timely notice that the term will not be extended as of June 1st of
any year, then this Agreement shall terminate at the conclusion of its remaining
term. References herein to the term of this Agreement shall refer both to the
initial term and successive terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Corporation and the Bank as may be consistent with
his titles and from time to time assigned to him by the Corporation's and the
Bank's Board of Directors.
(c) During the term of this Agreement, the Executive shall be nominated
to be a member of the Board of Directors of the Corporation and Bank, as long as
the Executive has not violated any of the terms and provisions of this
Agreement.
3. 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 $168,000
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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 Employers 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
pursuant to a program applicable to all executive officers of the Employers 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
Employers. 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 3(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, which shall in no event be
less than five weeks per annum. 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, the Employers shall provide continued life, medical
and dental coverage substantially identical to the coverage maintained by the
Employers for the Executive immediately prior to his termination. Such coverage
shall be provided for the period otherwise remaining in the term of this
Agreement but for such Disability or Retirement and thereafter shall continue
if, and to the extent, provided by the Employers policies in existence at such
time. Notwithstanding the foregoing, if the provision of any of the benefits
covered by this Section 3(d) would trigger the 20% tax and interest penalties
under Section 409A of the Code either due to the nature of such benefit or the
length of time it is being provided, then the benefit(s) that would trigger such
tax and interest penalties due to the nature of such benefit shall not be
provided at all and the benefit(s) that would trigger the tax and interest
penalties if provided beyond the "limited period of time" set forth in the final
regulations under Section 409A shall not be provided beyond such limited period
of time (the "Excluded Benefits"), and, in lieu of the Excluded Benefits, the
Employers shall pay to the Executive, in a lump sum within 30 days following
termination of employment or within 30 days after such determination should it
occur after termination of employment, a cash amount equal to the cost to the
Employers of providing the Excluded Benefits.
(e) In the event of the Executive's death during the term of this
Agreement, the Employers shall provide to the Executive's spouse for the
remaining term of this Agreement continued medical and dental coverage
substantially identical to the coverage maintained by the Employers for the
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Executive immediately prior to his death. Notwithstanding the foregoing, if the
provision of any of the benefits covered by this Section 3(e) would trigger the
20% tax and interest penalties under Section 409A of the Code either due to the
nature of such benefit or the length of time it is being provided, then the
benefit(s) that would trigger such tax and interest penalties due to the nature
of such benefit shall not be provided at all and the benefit(s) that would
trigger the tax and interest penalties if provided beyond the "limited period of
time" set forth in the final regulations under Section 409A shall not be
provided beyond such limited period of time (the "Excluded Benefits"), and, in
lieu of the Excluded Benefits, the Employers shall pay to the Executive, in a
lump sum within 30 days following termination of employment or within 30 days
after such determination should it occur after termination of employment, a cash
amount equal to the cost to the Employers of providing the Excluded Benefits.
4. 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, 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.
5. Termination.
(a) The Employers 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 Employers 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 Sections 3(d) and 3(e) hereof.
(d) In the event that (i) the Executive's employment is terminated by
the Employers for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive for Good Reason,
then the Employers shall, subject to the provisions of Section 6 hereof, if
applicable,
(A) pay to the Executive, in a lump sum as of the Date of
Termination, a cash severance amount equal to three (3) times the
Executive's Average Annual Compensation,
(B) maintain and provide for a period ending at the earlier of
(i) thirty-six (36) months after the Date of Termination or (ii) the
date of the Executive's full-time employment by another employer
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(provided that the Executive is entitled under the terms of such
employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the Executive's
continued participation in all group insurance, life insurance, health
and accident, disability and other employee benefit plans, programs and
arrangements offered by the Employers in which the Executive was
entitled to participate immediately prior to the Date of Termination
(other than retirement plans or stock compensation plans of the
Employers), subject to subparagraphs (C) and (D) below.
(C) in the event that the Executive's participation in any
plan, program or arrangement as provided in subparagraph (B) of this
Section 5(d) is barred, or during such period any such plan, program or
arrangement is discontinued or the benefits thereunder are materially
reduced, the Employers 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, and
(D) if the provision of any of the benefits covered by Section
5(d)(B) or (C) would trigger the 20% tax and interest penalties under
Section 409A of the Code either due to the nature of such benefit or
the length of time it is being provided, then the benefit(s) that would
trigger such tax and interest penalties due to the nature of such
benefit shall not be provided at all and the benefit(s) that would
trigger the tax and interest penalties if provided beyond the "limited
period of time" set forth in the regulations under Section 409A shall
not be provided beyond such limited period of time (the "Excluded
Benefits"), and in lieu of the Excluded Benefits the Employers shall
pay to the Executive, in a lump sum within 30 days following
termination of employment or within 30 days after such determination
should it occur after termination of employment, a cash amount equal to
the cost to the Employers of providing the Excluded Benefits.
6. Limitation of Benefits under Certain Circumstances. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, then the payments and benefits payable by the Employers pursuant to
Section 5 hereof shall be reduced by the minimum amount necessary to result in
no portion of the payments and benefits payable by the Employers under Section 5
being non-deductible to the Employers pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code. If the
payments and benefits under Section 5 are required to be reduced, the cash
severance shall be reduced first, followed by a reduction in the fringe
benefits. The determination of any reduction in the payments and benefits to be
made pursuant to Section 5 shall be based upon the opinion of independent tax
counsel selected by the Employers and paid for by the Employers. Such counsel
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 termination of employment under any circumstances other
than as specified in this Section 6, or a reduction in the payments and benefits
specified in Section 5 below zero.
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7. Restrictive Covenants
(a) Trade Secrets. Executive acknowledges that he has had, and will
have, access to confidential information of the Employers (including, but not
limited to, current and prospective confidential know-how, customer lists,
marketing plans, business plans, financial and pricing information, and
information regarding acquisitions, mergers and/or joint ventures) concerning
the business, customers, contacts, prospects, and assets of the Employers that
is unique, valuable and not generally known outside the Employers, and that was
obtained from the Employers or which was learned as a result of the performance
of services by Executive on behalf of the Employers ("Trade Secrets"). Trade
Secrets shall not include any information that: (i) is now, or hereafter
becomes, through no act or failure to act on the part of Executive that
constitutes a breach of this Section 7, generally known or available to the
public; (ii) is known to Executive at the time such information was obtained
from the Employers; (iii) is hereafter furnished without restriction on
disclosure to Executive by a third party, other than an employee or agent of the
Employers, who is not under any obligation of confidentiality to the Employers
or an Affiliate; (iv) is disclosed with the written approval of the Employers;
or (v) is required to be disclosed or provided by law, court order, order of any
regulatory agency having jurisdiction or similar compulsion, including pursuant
to or in connection with any legal proceeding involving the parties hereto;
provided however, that such disclosure shall be limited to the extent so
required or compelled; and provided further, however, that if Executive is
required to disclose such confidential information, he shall give the Employers
notice of such disclosure and cooperate in seeking suitable protections. Other
than in the course of performing services for the Employers, Executive will not,
at any time, directly or indirectly use, divulge, furnish or make accessible to
any person any Trade Secrets, but instead will keep all Trade Secrets strictly
and absolutely confidential. Executive will deliver promptly to the Employers,
at the termination of his employment or at any other time at the request of the
Employers, without retaining any copies, all documents and other materials in
his possession relating, directly or indirectly, to any Trade Secrets.
(b) Non-Competition. Unless the Executive's employment is terminated in
connection with or following a Change in Control of the Employers or unless the
Executive's employment is terminated by the Employers for a reason other than
Cause, then for a period of eighteen (18) months after termination of employment
(the "Restricted Period"), the Executive will not, directly or indirectly, (i)
become a director, officer, employee, principal, agent, consultant or
independent contractor of any insured depository institution, trust company or
parent holding company of any such institution or company which has an office in
any county in the Commonwealth of Pennsylvania in which the Bank also maintains
an office. Notwithstanding the foregoing, nothing in this Agreement shall
prevent the Executive from owning for passive investment purposes not intended
to circumvent this Agreement, less than five percent (5%) of the publicly traded
voting securities of any company engaged in the banking, financial services,
insurance, brokerage or other business similar to or competitive with the
Employers (so long as the Executive has no power to manage, operate, advise,
consult with or control the competing enterprise and no power, alone or in
conjunction with other affiliated parties, to select a director, manager,
general partner, or similar governing official of the competing enterprise other
than in connection with the normal and customary voting powers afforded the
Executive in connection with any permissible equity ownership).
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(c) Non-Solicitation of Employees. During the Restricted Period,
Executive shall not, directly or indirectly solicit, induce or hire, or attempt
to solicit, induce or hire, any current employee of the Employers, or any
individual who becomes an employee during the Restricted Period, to leave his or
her employment with the Employers or join or become affiliated with any other
business or entity, or in any way interfere with the employment relationship
between any employee and the Employers.
(d) Non-Solicitation of Customers. During the Restricted Period,
Executive shall not, directly or indirectly, solicit or induce, or attempt to
solicit or induce, any customer, lender, supplier, licensee, licensor or other
business relation of the Employers to terminate its relationship or contract
with the Employers, to cease doing business with the Employers, or in any way
interfere with the relationship between any such customer, lender, supplier,
licensee or business relation and the Employers (including making any negative
or derogatory statements or communications concerning the Employers or their
directors, officers or employees).
(e) Irreparable Harm. Executive acknowledges that: (i) Executive's
compliance with this Agreement is necessary to preserve and protect the
proprietary rights, Trade Secrets, and the goodwill of the Employers as going
concerns, and (ii) any failure by Executive to comply with the provisions of
this Agreement will result in irreparable and continuing injury for which there
will be no adequate remedy at law. In the event that Executive fails to comply
with the terms and conditions of this Agreement, the obligations of the
Employers to pay the severance benefits set forth in Sections 3 and 5 shall
cease, and the Employers will be entitled, in addition to other relief that may
be proper, to all types of equitable relief (including, but not limited to, the
issuance of an injunction and/or temporary restraining order) that may be
necessary to cause Executive to comply with this Agreement, to restore to the
Employers their property, and to make the Employers whole.
(f) Survival. The provisions set forth in this Section 7 shall survive
termination of this Agreement.
(g) Scope Limitations. If the scope, period of time or area of
restriction specified in this Section 7 are or would be judged to be
unreasonable in any court proceeding, then the period of time, scope or area of
restriction will be reduced or limited in the manner and to the extent necessary
to make the restriction reasonable, so that the restriction may be enforced in
those areas, during the period of time and in the scope that are or would be
judged to be reasonable.
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, except as set forth in Section 5(d)(B) above.
(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.
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9. Withholding. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
10. Assignability. The Corporation and the Bank may assign this
Agreement and their rights and obligations hereunder in whole, but not in part,
to any corporation, bank or other entity with or into which the Corporation or
the Bank may hereafter merge or consolidate or to which the Corporation or 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 Employers 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:
To the Bank: Secretary
Farmers National Bank of Emlenton
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
To the Corporation: Secretary
Emclaire Financial Corp.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
To the Executive: Xxxxx X. Xxx
At the address last appearing on
the personnel records of the Employers
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 signed by the Executive and such officer or officers as may
be specifically designated by the Board of Directors of the Employers to sign on
their 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. In addition, notwithstanding anything in this Agreement to the
contrary, the Employers may amend in good faith any terms of this Agreement,
including retroactively, in order to comply with Section 409A of the Code.
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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 Commonwealth of
Pennsylvania.
14. Nature of Obligations. Nothing contained herein shall create or
require the Employers 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 Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
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 will constitute one and the same instrument.
18. Regulatory Actions. The following provisions shall be applicable to
the parties 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 5 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank's 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. Sections 1818(e)(3) and 1818(g)(1)), the Bank's
obligations under this Agreement 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 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 Bank's affairs by an order
issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
Sections 1818(e)(4) and (g)(1)), all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the Executive and the Bank 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. Section 1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the Executive and the
Bank 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 FDIA (12 U.S.C. Section 1828(k)) and 12 C.F.R. Part
359.
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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 (b) any back-pay, including Base Salary, bonuses and
any other cash compensation, fringe benefits and any compensation and benefits
due to the Executive under this Agreement.
21. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extent that the parties may otherwise reach a mutual
settlement of such issue. The Employers shall incur the cost of all fees and
expenses associated with filing a request for arbitration with the AAA, whether
such filing is made on behalf of the Employers or the Executive, and the costs
and administrative fees associated with employing the arbitrator and related
administrative expenses assessed by the AAA.
22. Entire Agreement. This Agreement embodies the entire agreement
between the Employers and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employers and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: EMCLAIRE FINANCIAL CORP.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- ------------------------------
Xxxxxxx X. Xxxxx
Chief Financial Officer
FARMERS NATIONAL BANK
OF EMLENTON
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
President and Chief Executive
Officer
EXECUTIVE
By: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
12
