First Federal Savings Bank of Iowa Employment Agreement
First
Federal Savings Bank of Iowa
This
Employment
Agreement
("Agreement") made and entered into as of July 27, 2007 by and between
First
Federal Savings Bank of Iowa,
a
savings bank organized and operating under the federal laws of the United States
and having an office at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxx 00000 ("Bank")
and
Xxxx Xxxx, an individual residing at 0000 X. X. Xxxxxxx Xxxxx Xxxxx, Xxxxxx,
Xxxx 00000 ("Xx. Xxxx").
W
i t n e s s e t h :
Whereas,
Xx.
Xxxx, effective June 11, 2007, currently serves the Bank in the capacity of
Chief Financial Officer; and
Whereas,
the
Bank is a wholly owned subsidiary of North Central Bancshares, Inc. ("Holding
Company"); and
Whereas,
the
Bank desires to employ Xx. Xxxx in the capacity of Chief Financial Officer
and
desires to assure for itself the services of Xx. Xxxx for the period provided
in
this Agreement; and
Whereas,
Xx.
Xxxx is willing to serve the Bank 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 Bank and Xx. Xxxx hereby agree as
follows:
Section
1. Employment.
The
Bank
agrees to employ Xx. Xxxx, and Xx. Xxxx hereby agrees to such 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 years beginning on
the
date of this Agreement. Prior to the first anniversary of the date of this
Agreement and on each anniversary date thereafter (each, an "Anniversary Date"),
the Board of Directors of the Bank ("Board") shall review the terms of this
Agreement and Xx. Xxxx'x performance of services hereunder and may, in the
absence of objection from Xx. Xxxx, approve an extension of the Employment
Agreement. In such event, the Employment Agreement shall be extended to the
third anniversary of the relevant Anniversary Date.
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(b) 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 the
Anniversary Date on which the Employment Period (as extended pursuant to section
2(a) of this Agreement) is then scheduled to expire.
(c) Nothing
in this Agreement shall be deemed to prohibit the Bank at any time from
terminating Xx. Xxxx'x employment during the Employment Period with or without
notice for any reason; provided,
however,
that
the relative rights and obligations of the Bank and Xx. Xxxx in the event of
any
such termination shall be determined under this Agreement.
Section
3. Duties.
Xx.
Xxxx
shall serve as Chief Financial Officer of the Bank, having such power, authority
and responsibility and performing such duties as are prescribed by or under
the
By-Laws of the Bank and as are customarily associated with such position. Xx.
Xxxx shall devote his full business time and attention (other than during
weekends, holidays, approved vacation periods, and periods of illness or
approved leaves of absence) to the business and affairs of the Bank and shall
use his best efforts to advance the interests of the Bank.
Section
4. Cash
Compensation.
In
consideration for the services to be rendered by Xx. Xxxx hereunder, the Bank
shall pay to him a salary no less than the rate in effect on the date of this
agreement, payable in approximately equal installments in accordance with the
Bank's customary payroll practices for senior officers. At least annually during
the Employment Period, the Board shall review Xx. Xxxx'x annual rate of salary
and may, in its discretion, approve an increase therein. In addition to salary,
Xx. Xxxx may receive other cash compensation from the Bank for services
hereunder at such times, in such amounts and on such terms and conditions as
the
Board may determine from time to time.
Section
5. Employee
Benefit Plans and Programs.
During
the Employment Period, Xx. Xxxx shall be treated as an employee of the Bank
and
shall be eligible 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 Bank, in accordance with the terms
and conditions of such employee benefit plans and programs and compensation
plans and programs and consistent with the Bank's customary
practices.
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Section
6. Indemnification
and Insurance.
(a) During
the Employment Period and until the expiration of time provided by law for
the
commencement of any judicial or administrative proceeding on the basis of such
service, the Bank shall cause Xx. Xxxx 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 Bank or service in other capacities
at
the request of the Bank. The coverage provided to Xx. Xxxx 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 Bank.
(b) To
the
maximum extent permitted under applicable law, during the Employment Period
and
until the expiration of the time provided by law for the commencement of any
judicial or administrative proceeding on the basis of such service, the Bank
shall indemnify, and shall cause its subsidiaries and affiliates to indemnify
Xx. Xxxx 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 Bank
or any subsidiary or affiliate thereof. This section 6(b) shall not be
applicable where section 19 is applicable. [No indemnification shall be paid
that would violate 12 U.S.C. 1828(k) or any regulations promulgated thereunder,
or 12 C.F.R. 545.121.]
Section
7. Outside
Activities.
Xx.
Xxxx
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. Xx. Xxxx 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 Bank and generally applicable
to
all similarly situated executives. Xx. Xxxx may also serve as an officer of
the
Holding Company on such terms and conditions as the Bank and the Holding Company
may mutually agree upon, and such service shall not be deemed to materially
interfere with Xx. Xxxx'x performance of his duties hereunder or otherwise
result in a material breach of this Agreement.
Section
8. Working
Facilities and Expenses.
Xx.
Xxxx'x principal place of employment shall be at the Bank's office at 000 X.
00xx
Xx.,
Xxxx Xxx Xxxxxx, Xxxx 00000, or at such other location as the Bank and Xx.
Xxxx
may mutually agree upon. The Bank shall provide Xx. Xxxx at his principal place
of employment with a private office and other support services and facilities
suitable to his position with the Bank and necessary or appropriate in
connection with the performance of his assigned duties under this Agreement.
The
Bank shall reimburse Xx. Xxxx for his ordinary and necessary business expenses,
including, without limitation, mileage reimbursement at the official current
IRS
mileage reimbursement rate for business use of his personal automobile including
travel to the Bank’s other offices, fees for memberships in such organizations
as Xx. Xxxx and the Bank shall mutually agree are necessary and appropriate
for
business purposes, 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 Bank of an itemized account of such expenses in such
form as the Bank may reasonably require.
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Section
9. Termination
of Employment with Severance Benefits.
(a) Xx.
Xxxx
shall be entitled to the severance benefits described herein in the event that
his employment with the Bank terminates during the Employment Period under
any
of the following circumstances:
(i) Xx.
Xxxx'x voluntary resignation from employment with the Bank within ninety (90)
days following:
(A) the
failure of the Board to appoint or re-appoint or elect or re-elect Xx. Xxxx
to
the office of Chief Financial Officer (or a more senior office) of the
Bank;
(B) the
expiration of a thirty (30) day period following the date on which Xx. Xxxx
gives written notice to the Bank of its material failure, whether by amendment
of the Bank's Charter or By-laws, action of the Board or the Bank's stockholders
or otherwise, to vest in Xx. Xxxx the functions, duties, or responsibilities
prescribed in section 3 of this Agreement, unless, during such thirty (30)
day
period, the Bank fully cures such failure in a manner determined by Xx. Xxxx,
in
his discretion, to be satisfactory; or
(C) the
expiration of a thirty (30) day period following the date on which Xx. Xxxx
gives written notice to the Bank of its material breach of any term, condition
or covenant contained in this Agreement (including, without limitation any
reduction of Xx. Xxxx'x 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 Xx. Xxxx 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 Bank
fully cures such failure; or
(ii) the
termination of Xx. Xxxx'x employment with the Bank for any other reason not
described in section 10(a).
In
such
event, then, the Bank shall provide the benefits and pay to Xx. Xxxx the amounts
described in section 9(b).
(b) Upon
the
termination of Xx. Xxxx'x employment with the Bank under circumstances described
in section 9(a) of this Agreement, the Bank shall pay and provide to Xx. Xxxx
(or, in the event of his death, to his estate):
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(i) his
earned but unpaid compensation as of the date of the termination of his
employment with the Bank, such payment to be made at the time and in the manner
prescribed by law applicable to the payment of wages;
(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 programs
maintained for the benefit of the Bank's officers and employees;
(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 Xx. Xxxx, 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 Bank 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 Xx. Xxxx'x termination of employment with the
Bank;
(iv) thirty
(30) days following his termination of employment with the Bank, a lump sum
payment, in an amount equal to the present value of the salary that Xx. Xxxx
would have earned if he had continued working for the Bank 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 Xx. Xxxx'x termination
of employment with the Bank, 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") (the “Short Term
AFR”), compounded using the compounding period corresponding to the Bank'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) thirty
(30) days following his termination of employment with the Bank, a lump sum
payment in an amount equal to the product of (A) the Bank’s “normal cost” for
its tax-qualified defined benefit plan for the most recently completed fiscal
year of the plan (expressed as a percentage of the compensation recognized
in
the plan’s benefit formula and determined by, or on the basis of information
furnished by, the plan’s actuary) multiplied by (B) the amount payable under
section 9(b)(iv);
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(vi) thirty
(30) days following his termination of employment with the Bank, 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 Bank, if he were 100% vested thereunder and had continued working for
the Bank 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 Xx. Xxxx'x termination of employment with the Bank, and making
the
maximum amount of employee contributions, if any, required 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 Short
Term AFR;
(vii) the
payments that would have been made to Xx. Xxxx under any cash bonus or long-term
or short-term cash incentive compensation plan maintained by, or covering
employees of, the Bank if he had continued working for the Bank during the
Remaining Unexpired Employment Period and had earned the maximum bonus or
incentive award in each calendar year that ends during the Remaining Unexpired
Employment Period, each annual payment to be equal to the product
of:
(A) the
maximum percentage rate at which an award was ever available to Xx. Xxxx under
such incentive compensation plan; multiplied by
(B) the
salary that would have been paid to Xx. Xxxx during each such calendar year
at
the highest annual rate of salary achieved during that portion of the Employment
Period which is prior to Xx. Xxxx'x termination of employment with the
Bank;
where
such payments are to be made (without discounting for early payment) thirty
(30)
days following Xx. Xxxx'x termination of employment;
(viii) Xx.
Xxxx
shall be deemed fully vested in all options and appreciation rights under any
stock option or appreciation rights plan or program maintained by, or covering
employees of, the Bank, even if he is not vested under such plan or
program;
(ix) Xx.
Xxxx
shall be deemed fully vested in all shares awarded under any restricted stock
plan maintained by, or covering employees of, the Bank, even if he is not vested
under such plan.
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The
Bank
and Xx. Xxxx hereby stipulate that the damages which may be incurred by Xx.
Xxxx
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 Xx. Xxxx'x efforts, if any, to mitigate
damages. The Bank and Xx. Xxxx further agree that the Bank may condition the
payments and benefits (if any) due under sections 9(b)(iii), (iv), (v), (vi)
and
(vii) on the receipt, not later than thirty (30) days after termination of
employment, of Xx. Xxxx'x resignation from any and all positions which he holds
as an officer, director or committee member with respect to the Bank, the
Holding Company or any subsidiary or affiliate of either of them; provided
that
the Bank requests such resignations in writing not later than twenty (20) days
after termination of employment.
Section
10. Termination
without Additional Bank Liability.
(a) In
the
event that Xx. Xxxx'x employment with the Bank shall terminate during the
Employment Period on account of:
(i) the
discharge of Xx. Xxxx 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 Xx.
Xxxx shall not be deemed to have been discharged for cause unless and until
he
shall have received a written notice of termination from the Board, accompanied
by a resolution duly adopted by affirmative vote of a majority of the entire
Board at a meeting called and held for such purpose (after reasonable notice
to
Xx. Xxxx and a reasonable opportunity for Xx. Xxxx 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 for the
proposed determination) finding that in the good faith opinion of the Board
grounds exist for discharging Xx. Xxxx for cause; or
(ii) Xx.
Xxxx'x voluntary resignation from employment with the Bank for reasons other
than those specified in section 9(a)(i) or section 11(b);
(iii) Xx.
Xxxx'x death; or
(iv) a
determination that Xx. Xxxx is eligible for long-term disability benefits under
the Bank's long-term disability insurance program or, if there is no such
program, under the federal Social Security Act;
then
the
Bank shall have no further obligations under this Agreement, other than the
payment to Xx. Xxxx (or, in the event of his death, to his estate) of his earned
but unpaid compensation 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
Bank.
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Section
11. Termination
Upon or Following a Change of Control.
(a) A
Change
of Control of the Bank ("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 Bank of a transaction that would result in the
reorganization, merger or consolidation of the Bank with one or more other
persons, other than a transaction following which:
(A) at
least
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 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 51%
of
the outstanding equity ownership interests in the Bank; and
(B) at
least
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 51% of the securities entitled to vote generally in
the
election of directors of the Bank;
(ii) the
acquisition of all or substantially all of the assets of the Bank or beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act)
of 20% or more of the outstanding securities of the Bank 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 Bank of any transaction which
would result in such an acquisition; or
(iii) a
complete liquidation or dissolution of the Bank, or approval by the stockholders
of the Bank of a plan for such liquidation or dissolution; or
(iv) the
occurrence of any event if, immediately following such event, at least 50%
of
the members of the board of directors of the Bank do not belong to any of the
following groups:
(A) individuals
who were members of the Board of the Bank on the date of this Agreement;
or
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(B) individuals
who first became members of the Board of the Bank after the date of this
Agreement either:
(I) upon
election to serve as a member of the Board of the Bank 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 election; or
(II) upon
election by the stockholders of the Bank to serve as a member of the Board
of
the Bank, but only if nominated for election by affirmative vote of
three-quarters of the members of the Board of the Bank, 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
the Bank; or
(v) any
event
which would be described in section 11(a)(i), (ii), (iii) or (iv) if the term
"Holding Company" were substituted for the term "Bank" 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 Bank, the Holding Company,
or
any affiliate or subsidiary of either of them, by the Bank, the Holding Company,
or any affiliate or 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, Xx. Xxxx shall be entitled to the payments and
benefits contemplated by section 9(b) in the event of his termination employment
with the Bank 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 Xx. Xxxx at any time during the Employment Period
and
within ninety (90) days following his demotion, loss of title, office or
significant authority or responsibility, or following any reduction in any
element of his package of compensation and benefits;
(ii) resignation,
voluntary or otherwise, by Xx. Xxxx at any time during the Employment Period
and
within ninety (90) days following any relocation of his principal place of
employment or any change in working conditions at such principal place of
employment which is embarrassing, derogatory or otherwise adverse;
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(iii) resignation,
voluntary or otherwise, by Xx. Xxxx at any time during the Employment Period
following the failure of any successor to the Bank in the Change of Control
to
include Xx. Xxxx in any compensation or benefit program maintained by it or
covering any of its executive officers, unless Xx. Xxxx is already covered
by a
substantially similar plan of the Bank which is at least as favorable to him;
or
(iv) resignation,
voluntary or otherwise, for any reason whatsoever following the expiration
of a
transition period of thirty days beginning on the effective date of the Change
of Control (or such longer period, not to exceed ninety (90) days beginning
on
the effective date of the Change in Control, as the Bank or its successor may
reasonably request) to facilitate a transfer of management
responsibilities.
Section
12. Maximum
Limitations on Severance Benefits.
(a) Notwithstanding
anything in this Agreement to the contrary, in the event that the payments
provided to Xx. Xxxx (or in the event of his death, to his estate) under this
Agreement constitute an "excess parachute payment" under section 280G of the
Code, such payments shall be limited to 2.99 times his average compensation
(including salary, bonuses, amounts contributed on behalf of Xx. Xxxx to any
employee benefit plans and programs and compensation plans and programs
maintained for the benefit of the Bank's officers and employees and any other
cash or non-cash compensation paid to Xx. Xxxx) for the period of five taxable
years ending immediately prior to his termination of employment (or for such
shorter period during which Xx. Xxxx has served as a full-time employee of
the
Bank).
(b) In
addition to the limitations of section 12(a) if (i) the making of payments
and
the provision of benefits to Xx. Xxxx under this Agreement would, in the absence
of this section 12(b), cause Xx. Xxxx to be subject to the excise tax imposed
under section 4999 of the Code and (ii) the limitation of Xx. Xxxx'x payments
and benefits as provided in this section 12(b) would require a reduction in
payments and benefits that is less than or equal to the excise tax that
otherwise would be imposed, then the payments and benefits made to Xx. Xxxx
under this Agreement shall be limited, in such manner as Xx. Xxxx, in his
discretion, may determine, to the maximum amount that may be paid without
resulting in the imposition of an excise tax under section 4999 of the
Code.
Section
13. Covenant
Not to Compete.
Xx.
Xxxx
hereby covenants and agrees that, in the event of his termination of employment
with the Bank 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 Bank
(or, if less, for the Remaining Unexpired Employment Period), he shall not,
without the written consent of the Bank, become an officer, employee,
consultant, director or trustee of 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, that entails
working in any city, town or county in which the Bank or the Holding Company
has
an office or has filed an application for regulatory approval to establish
an
office, determined as of the effective date of Xx. Xxxx'x termination of
employment; provided,
however,
that
this section 13 shall not apply if Xx. Xxxx'x employment is terminated for
the
reasons set forth in section 9(a) or section 11(b); and provided, further,
that
if Xx. Xxxx'x employment shall be terminated on account of disability as
provided in section 10(d) of this Agreement, this section 13 shall not prevent
Xx. Xxxx from accepting any position or performing any services if (a) he first
offers, by written notice, to accept a similar position with, or perform similar
services for, the Bank on substantially the same terms and conditions and (b)
the Bank declines to accept such offer within ten (10) days after such notice
is
given. If
Xx.
Xxxx resigns voluntarily with advance written notice, any period of employment
with the Bank after giving notice and before the effective date of his
termination of employment shall count as a part of the non-compete
period.
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Section
14. Confidentiality.
Unless
he
obtains the prior written consent of the Bank, Xx. Xxxx shall keep confidential
and shall refrain from using for the benefit of himself, or any person or entity
other than the Bank or any entity which is a subsidiary of the Bank or of which
the Bank is a subsidiary, any material document or information obtained from
the
Bank, 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 Xx. Xxxx, with or without the Bank'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.
Xx.
Xxxx
hereby covenants and agrees that, for a period of one (1) year following his
termination of employment with the Bank, he shall not, without the written
consent of the Bank, 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 Bank, the Holding Company or any affiliate,
as of
the date of this Agreement, of either of them, to terminate his or her
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 in any city, town or county in which the Bank or the
Holding Company has an office or has filed an application for regulatory
approval to establish an office, determined as of the date of this
Agreement;
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(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 in any city,
town or county in which the Bank or the Holding Company has an office or has
filed an application for regulatory approval to establish an office, determined
as of the date of this Agreement, 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 Bank, the Holding Company, or any affiliate, as
of
the date of this Agreement, of either of them, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, such 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; 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 Bank to terminate an existing
business or commercial relationship with the Bank.
If
Xx.
Xxxx resigns voluntarily with advance written notice, any period of employment
with the Bank after giving notice and before the effective date of his
termination of employment shall count as part of the non-solicitation
period.
Section
16. No
Effect on Employee Benefit Plans or Programs.
The
termination of Xx. Xxxx'x employment during the term of this Agreement or
thereafter, whether by the Bank or by Xx. Xxxx, shall have no effect on the
rights and obligations of the parties hereto under the Bank's qualified or
non-qualified retirement, pension, savings, thrift, profit-sharing or stock
bonus plans, group life, health (including 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 Bank from time to
time.
Section
17. Successors
and Assigns.
This
Agreement will inure to the benefit of and be binding upon Xx. Xxxx, his legal
representatives and testate or intestate distributees, and the Bank and its
successors and assigns, including any successor by merger or consolidation
or
any other person or firm or corporation to which all or substantially all of
the
assets and business of the Bank may be sold or otherwise transferred. Failure
of
the Bank to obtain from any successor its express written assumption of the
Bank'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 unless cured within ten (10) days after notice thereof
by Xx. Xxxx to the Bank.
Page
12
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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:
If
to Xx.
Xxxx:
|
Xx.
Xxxx X. Xxxx
[ ]
[ ]
|
If
to the
Bank:
|
First
Federal Savings Bank of Iowa
000
Xxxxxxx Xxxxxx
X.X.
Xxx 0000
Xxxx
Xxxxx, Xxxx 00000
Attention:
Corporate
Secretary
with
a copy to:
Xxxxxxx
Xxxxxxxx & Wood LLP
Two
World Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
W.
Xxxxxx Xxxxxx, Esq.
|
Section
19. Indemnification
for Attorneys' Fees.
From
and
after the earliest date on which a Change of Control occurs, the Bank shall
indemnify, hold harmless and defend Xx. Xxxx 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 Xx.
Xxxx 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 Bank's obligations hereunder shall be conclusive evidence of Xx. Xxxx'x
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.
Page
13
of 18
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.
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 Iowa applicable to
contracts entered into and to be performed entirely within the State of
Iowa.
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 representations relating to the subject matter hereof. No
modifications of this Agreement shall be valid unless made in writing and signed
by the parties hereto.
Page
14
of 18
Section
26. Survival.
The
provisions of sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 27 and
28
shall survive the expiration of the Employment Period or termination of this
Agreement.
Section
27. Equitable
Remedies.
The
Holding Company and Xx. Xxxx hereby stipulate that money damages are an
inadequate remedy for violations of sections 6(a), 13, 14 or 15 of this
Agreement and agree that equitable remedies, including, without limitations,
the
remedies of specific performance and injunctive relief, shall be available
with
respect to the enforcement of such provisions.
Section
28. Required
Regulatory Provisions.
The
following provisions are included for the purposes of complying with various
laws, rules and regulations applicable to the Bank:
(a) Notwithstanding
anything herein contained to the contrary, in no event shall the aggregate
amount of compensation payable to Xx. Xxxx under section 9(b) hereof (exclusive
of amounts described in section 9(b)(i), (viii) and (ix)) exceed the value
of
three times Xx. Xxxx'x average annual total compensation for the last five
consecutive calendar years to end prior to his termination of employment with
the Bank (or for his entire period of employment with the Bank if less than
five
calendar years).
(b) Notwithstanding
anything herein contained to the contrary, any payments to Xx. Xxxx by the
Bank,
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
("FDI Act"), 12 U.S.C. §1828(k), and Federal Deposit Insurance Corporation
regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification
Payments.
(c) Notwithstanding
anything herein contained to the contrary, if Xx. Xxxx is suspended and/or
temporarily prohibited from participating in the conduct of the affairs of
the
Bank pursuant to a notice served under section 8(e)(3) or 8(g)(1) of the FDI
Act
(12 U.S.C. §1818(e)(3) or 1818(g)(1)), the Bank's obligations under this
Agreement shall be suspended as of the date of service of such notice, unless
stayed by appropriate proceedings. If the charges in such notice are dismissed,
the Bank, in its discretion, may (i) pay to Xx. Xxxx all or part of the
compensation withheld while the Bank's obligations hereunder were suspended
and
(ii) reinstate, in whole or in part, any of the obligations which were
suspended.
(d) Notwithstanding
anything herein contained to the contrary, if Xx. Xxxx is removed and/or
permanently prohibited from participating in the conduct of the Bank's affairs
by an order issued under section 8(e)(4) or 8(g)(1) of the FDI Act (12 U.S.C.
§1818(e)(4) or (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 Bank
and Xx. Xxxx shall not be affected.
Page
15
of 18
(e) Notwithstanding
anything herein contained to the contrary, if the Bank is in default (as defined
in section 3(x)(1) of the FDI Act, all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the Bank and Xx.
Xxxx
shall not be affected.
(f) Notwithstanding
anything herein contained to the contrary, all obligations under this Agreement
shall be terminated, except to the extent determined that continuation of this
Agreement is necessary for the continued operation of the Bank: (i) by the
Director of the Office of Thrift Supervision ("OTS") or his designee at the
time
the Federal Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in section
13(c) of the FDI Act; (ii) by the Director of the OTS or his designee at the
time such Director or designee approves a supervisory merger to resolve problems
related to the operation of the Bank or when the Bank is determined by such
Director to be in an unsafe or unsound condition. The vested rights of the
parties shall not be affected by such action.
If
and to
the extent that any of the foregoing provisions is not, or shall cease to be,
required by
applicable law, rule or regulation, the same shall become inoperative in the
case of the Bank as though eliminated by formal amendment of this
Agreement.
Section
29. Section
409A of the Internal Revenue Code
Xx.
Xxxx
and the
Bank acknowledge that each of the payments and benefits promised to Xx.
Xxxx
under
this Agreement must either comply with the requirements of Section 409A of
the
Internal Revenue Code ("Section 409A") and the regulations thereunder or
qualify
for an exception from compliance. To that end, Xx. Xxxx
and the
Bank agree that (a) the payment described in Section 9(b)(i) is intended
to be
exempt from Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3)
as payment made pursuant to the Bank’s customary payment timing
arrangement;
and (b)
the welfare benefits provided in kind under section 9 (b)(iii) are intended
to
be exempt from Section 409A as welfare benefits pursuant to Treasury Regulation
Section 1.409A-1(a)(5) and/or as benefits not includible in gross income.
In the
case of a payment that is not exempt from Section 409A, the payment shall
not be
made prior to, and shall, if necessary, be deferred (with interest at the
annual
rate of 6%, compounded monthly from the date of Xx. Xxxx’x
termination of employment to the date of actual payment) to and paid on the
later of the earliest date on which Xx. Xxxx
experiences a separation from service (within the meaning of Treasury Regulation
Section 1.409A-1(h)) and, if Xx. Xxxx
is a
specified employee (within the meaning of Treasury Regulation Section
1.409A-1(i)) on the date of his separation from service, the first day of
the
seventh month following Xx. Xxxx’x
separation from service. Furthermore, this Agreement shall be construed and
administered in such manner as shall be necessary to effect compliance with
Section 409A and shall be subject to amendment in the future, in such manner
as
the Bank may deem necessary or appropriate to effect such compliance; provided
that any such amendment shall preserve for Xx. Xxxx
the
present value of the payments due under this Agreement.
Page
16
of 18
In
Witness Whereof,
the
Bank has caused this Agreement to be executed and Xx. Xxxx has hereunto set
his
hand, all as of the day and year first above written.
| /s/ Xxxx X. Xxxx | ||
| Xxxx X. Xxxx |
|
ATTEST:
|
First
Federal Savings Bank of Iowa
|
|||
|
By:
|
/s/
Xxxxx X. Xxxxxx
|
By:
|
/s/
Xxxxx X. Xxxxxxx
|
|
|
|
Secretary
|
|
Name: Xxxxx X. Xxxxxxx | |
|
|
Title: Chief Executive Officer | |||
|
[Seal]
|
||||
Page
17
of 18
STATE
OF
IOWA )
:
ss.:
COUNTY
OF
POLK
)
On
this
__________ day of ___________, 2007, before me personally came Xxxx X. Xxxx,
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.
|
Notary
Public
|
|||
STATE
OF
IOWA )
:
ss.:
COUNTY
OF
POLK
)
On
this
__________ day of ___________, 2007, before me personally came
_________________________, to me known, who, being by me duly sworn, did depose
and say that he resides at ____________________________________________________,
that he is _____________________________________ of First
Federal Savings Bank of Iowa,
the
savings bank described in and which executed the foregoing instrument; that
he
knows the seal of said savings bank; that the seal affixed to said instrument
is
such seal; that it was so affixed by order of the Board of Directors of said
savings bank; and that he signed his name thereto by like order.
|
Notary
Public
|
||
Page
18
of 18
