EMPLOYMENT AGREEMENT
EXHIBIT 10.2
THIS EMPLOYMENT AGREEMENT is effective as of August 22, 2005 between AnchorBank, fsb (the
“Bank”), a federally-chartered savings bank, its successors and assigns, and Xxxx X. Xxxxxxxxx (the
“Executive”).
RECITALS
WHEREAS, Executive is a key employee, whose background, knowledge and experience in the
financial institutions industry has substantially benefited both the Bank and its parent
corporation Anchor BanCorp Wisconsin, Inc. (the “Company”), sometimes collectively referred to
herein as the “Employers”, and whose continued employment as an executive member of their
respective management teams in the positions of President and Chief Operating Officer (“Corporate
Positions”) will continue to benefit the Bank and Company in the future; and
WHEREAS, the parties are mutually desirous of entering into this Agreement setting forth the
terms and conditions for the employment relationship between the Bank and Executive; and
WHEREAS, the Board of Directors of the Bank has approved and authorized its entry into this
Agreement with Executive.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below:
1. Employment. The Bank shall continue to employ Executive and Executive shall
continue to serve the Bank on the terms, conditions and for the period set forth in Section 2 of
this Agreement.
2. Term of Employment. The period of Executive’s employment under this Agreement
shall become effective as of the date set forth above (with June 1, 2006 being deemed the
“Commencement Date” for all other purposes) and shall expire on the third anniversary of the date
immediately preceding the Commencement Date, unless sooner terminated as provided herein; provided
that, on each date immediately preceding the anniversary of the Commencement Date, the term of
employment may be extended by action of the Bank’s Board of Directors, following an explicit review
by the Board of Executive’s performance under this Agreement (with appropriate documentation
thereof and after taking into account all relevant factors including Executive’s performance
hereunder), to add one additional year to the remaining term of employment annually restoring such
term to a full three-years. The Board of Directors or Executive shall each provide the other with
at least ninety (90) days’ advance written notice of any decision on their respective parts not to
extend the Agreement on any date immediately preceding an anniversary of the Commencement Date.
The term of employment as in effect from time to time hereunder shall be referred to as the
“Employment Term”.
3. Positions and Duties. Executive shall serve the Bank in Corporate Positions as its
President and Chief Operating Officer. As such, Executive shall report directly to the Board of
Directors, be nominated as a management candidate for election to the Board of Directors upon
expiration of each term thereon while this Agreement remains in effect, serve as a member of the
Bank’s Management Committee and be generally responsible for selection and supervision of the
Bank’s management personnel and for the formulation of their business and personnel policies,
rendering executive, policy-making and other management services of the type customarily performed
by persons serving in similar capacities at other institutions, together with such other duties and
responsibilities as may be appropriate to Executive’s position and as may be from time to time
determined by the Bank’s Board of Directors to be necessary to its operations and in accordance
with its bylaws.
4. Compensation. As compensation for services provided pursuant to this Agreement,
Executive shall receive from the Bank the compensation and benefits set forth below:
(i) Base Salary. During the Employment Term, Executive shall receive from the
Employers a base salary (“Base Salary”) in such amount as may from time to time be approved
by their Boards of Directors. The Base Salary shall at no time be less than $250,000 per
annum, payable by the Bank and Company in such proportion as shall be determined by their
Boards of Directors to appropriately reflect the allocation of Executive’s time and efforts
between them. The Base Salary may be increased from time to time as determined by the
Bank’s and Company’s Boards of Directors, provided that no such increase in Base Salary or
other compensation shall in any way limit or reduce any other obligations under this
Agreement. Once established at a specified annual rate, Executive’s Base Salary shall not
thereafter be reduced except as part of a general pro-rata reduction in compensation
applicable to all Executive Officers; provided, however, that no such reduction shall be
permitted following a “change in control” as defined herein. Executive’s Base Salary and
other compensation shall be paid in accordance with the Employers’ regular payroll practices
as from time to time in effect. For purposes of this Agreement, the term “Executive
Officers” shall mean all officers of the Bank and/or Company having a written Employment
Agreement.
(ii) Bonus and Incentive Plans. Executive shall be entitled, during the
Employment Term, to participate in and receive payments from all bonus and other incentive
compensation plans (as currently in effect, as modified from time to time, or as
subsequently adopted); provided, however, that nothing contained herein shall grant
Executive the right to continue in any bonus or other incentive compensation plan following
its discontinuance by the Board or Boards (except to the extent Executive had earned or
otherwise accumulated vested rights therein prior to such discontinuance). In addition,
Executive shall participate in all stock purchase, stock option, stock appreciation right,
stock grant, or other stock based incentive programs of any type made available by Employers
to their Executive Officers. The Employers shall not make any changes in such plans,
benefits or privileges which would adversely affect 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
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adverse change in the rights and benefits of Executive as compared with other Executive
Officers.
(iii) Other Benefits. During the Employment Term, Employers shall provide to
Executive all other benefits of employment (or, with Executive’s consent, equivalent
benefits) generally made available to other Executive Officers. Such benefits shall include
participation by Executive in any group health, life, disability, or similar insurance
program and in any pension, profit-sharing, Employee Stock Ownership Plan (“ESOP”), 401(k),
excess benefit plan or other or similar retirement program. Employers shall continue in
effect any individual insurance plans, deferred compensation agreements, supplemental
retirement plans, or similar plans as in effect as of the Commencement Date and may, from
time to time, amend such plans as the parties deem necessary to comply with any changes in
applicable law; provided, however, that no such amendment may reduce Executive’s previously
earned or accumulated vested rights under any such plan or program. Executive shall be
entitled to use of an automobile provided by Employers under the terms of such corporate
automobile policy as they shall maintain in effect and as it may be amended from time to
time.
Executive shall receive vacation, sick time, personal days and other perquisites in the
same manner and to the same extent as provided under the Employers’ policies as in effect
from time to time for other Executive Officers. Employers shall also reimburse Executive
for maintaining a membership at Hawk’s Landing Golf Club and the Madison Club and shall
provide for or pay reasonable expenses incurred by Executive at such locations or otherwise
in furtherance of or in connection with the business of Employers, including but not by way
of limitation, travel expenses and all reasonable entertainment expenses (whether incurred
at Executive’s residence, while traveling or otherwise) subject to such reasonable
documentation and other limitations as may be imposed by the Boards of Directors of the
Employers.
Nothing contained herein shall be construed as granting Executive the right to continue
in any benefit plan or program, or to receive any other perquisite of employment provided
under this Subsection 4(iii) following termination or discontinuance of such plan, program
or perquisite by the Board (except to the extent Executive had previously earned or
accumulated vested rights therein).
5. Termination. This Agreement may be terminated, subject to payment of the
compensation and other benefits described below, upon occurrence of any of the events described
herein. In case of such termination (except in the event of termination by reason of disability),
the date on which Executive ceases to be employed under this Agreement, after giving effect to any
prior notice requirement, is referred to as the “Termination Date”.
(i) Death, Retirement. This Agreement shall terminate at the death or
retirement of Executive. As used herein, the term “retirement” shall mean Executive’s
retirement in accordance with any retirement arrangement established for Executive with his
consent.
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If termination occurs for such reason, no additional compensation shall be payable to
Executive under this Agreement except as specifically provided herein. Notwithstanding
anything to the contrary contained herein, Executive shall receive all compensation and
other benefits to which he was entitled under Section 4 through the Termination Date and, in
addition, shall receive all other benefits available to him under the Bank’s benefit plans
and programs to which he was entitled by reason of employment through the Termination Date.
(ii) Disability. This Agreement shall terminate upon the disability of
Executive. As used in this Agreement, “disability” shall mean Executive’s inability, as the
result of physical or mental incapacity, to substantially perform his employment duties for
a period of 90 consecutive days. Any question as to the existence of Executive’s disability
upon which Executive and Employers cannot agree shall be determined by a qualified
independent physician mutually agreeable to Executive and Employers or, if the parties are
unable to agree upon a physician within ten (10) days after notice from either to the other
suggesting a physician, by a physician designated by the then president of the medical
society for the county in which Executive maintains his principal residence. The costs of
any such medical examination shall be borne by the Employers. If Executive is terminated
due to disability, he shall be paid 100% of his Base Salary at the rate in effect at the
time notice of termination is given for one year and thereafter an annual amount equal to
75% of such Base Salary for any remaining portion of the Employment Term, such amounts to be
paid in substantially equal monthly installments and offset by any monthly payments actually
received by Executive during the payment period from (i) any disability plans provided by
the Employers, and/or (ii) any governmental social security or workers compensation program.
If termination occurs for such reason, no additional compensation shall be payable to
Executive except as specifically provided herein. Notwithstanding anything to the contrary
contained herein, Executive shall receive all compensation and other benefits to which he
was entitled under Section 4 through the Termination Date (which solely for purposes of this
subsection 5(ii) shall be deemed to be the last day of any portion of the Employment Term
remaining following a determination of disability) and, in addition, shall receive all other
benefits under the Employers’ benefit plans and programs to which he was entitled by reason
of employment through such Termination Date.
(iii) Cause. Employers may terminate Executive’s employment under this
Agreement for cause at any time, and thereafter their obligations under this Agreement shall
cease and terminate. Notwithstanding anything to the contrary contained herein, Executive
shall receive all compensation and other benefits in which he was vested or to which he was
otherwise entitled under Section 4, and the plans and programs provided therein, by reason
of employment through the Termination Date.
For purposes of this Agreement, “Cause” shall mean: (i) the intentional failure by
Executive to substantially perform his duties (other than any such failure resulting from
the Executive’s incapacity due to physical or mental illness) after a written demand for
substantial performance is delivered to Executive by Employers, which demand specifically
identifies the manner in which they believe Executive has not substantially
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performed his duties, (ii) any willful act of misconduct by Executive, (iii) a criminal
conviction of Executive for any act involving dishonesty, breach of trust or a violation of
the banking or savings and loan laws of the United States, (iv) a criminal conviction of
Executive for the commission of any felony, (v) a breach of fiduciary duty with respect to
the Bank or Company and involving personal profit, (vi) a willful violation of any law, rule
or regulation (other than a traffic violation or similar offenses) or of a final cease and
desist order, or (vii) personal dishonesty or material breach by Executive of any provision
of this Agreement.
For purposes of this Subsection 5(iii), no act (or failure to act) on Executive’s part
shall be deemed “willful” unless done, or omitted to be done, by Executive not in good faith
and without reasonable belief that the action or omission was in the best interest of the
Employers.
(iv) Voluntary Termination by Executive. Executive may voluntarily terminate
his employment under this Agreement at any time by giving at least thirty (30) days prior
written notice to Employers. In such event, Executive shall receive all compensation and
other benefits in which he was vested or to which he was otherwise entitled under Section 4
through the “Termination Date”, in addition to all other benefits available to him under
benefit plans and programs to which he was entitled by reason of employment through the
Termination Date.
(v) Suspension or Termination Required by the OTS
(A) If Executive is suspended and/or temporarily prohibited from participating
in the conduct of the Employers’ affairs by a notice served under Section 8(e)(3),
or Section 8(g)(1), of the Federal Deposit Insurance Act [12 U.S.C. § 1818(e)(3) and
(g)(l)], the Employers’ obligations under the Agreement shall be suspended as of the
date of service of the notice unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Employers shall (i) pay Executive all of
the compensation withheld while their obligations under this Agreement were
suspended, and (ii) reinstate such obligations as were suspended.
(B) If Executive is removed 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 Federal Deposit Insurance Act [12 U.S.C. § 1818(e)(4) or
(g)(1)], the obligations of the Employers under the Agreement shall terminate as of
the effective date of the order, but vested rights of the contracting parties shall
not be affected.
(C) If the Bank is in default as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act [12 U.S.C. 1813 (x)(1)], all obligations under the Agreement
shall terminate as of the date of default, but this paragraph shall not affect any
vested rights of the Executive.
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(D) All obligations under the Agreement shall be terminated, except to the
extent determined that continuation of the contract is necessary for the Employers’
continued operations (i) by the Director of the OTS, or his or her’ designee at the
time the FDIC or Resolution Trust Corporation (“RTC”) enters into an agreement to
provide assistance to or on behalf of the Employers under the authority contained in
Section 13(c) of the Federal Deposit Insurance Act or (ii) by the Director of the
OTS, or his or her designee, at the time it approves a supervisory merger to resolve
problems related to operation of the Employers or when the Employers are determined
by the Director of the OTS to be in an unsafe or unsound condition. Any rights of
the parties that have already vested, however, shall not be affected by such action.
(E) In the event that 12 C.F.R. § 563.39, or any successor regulation, is
repealed, this Section 5(v) shall cease to be effective on the effective date of
such repeal. In the event that 12 C.F.R. § 563.39, or any successor regulation, is
amended or modified, this Agreement shall be revised to reflect the amended or
modified provisions if: (1) the amended or modified provision is required to be
included in this Agreement; or (2) if not so required, the Executive requests that
the Agreement be so revised.
(vi) Other Termination. If this Agreement is terminated prior to a change in
control as defined in Section 6 (i) by the Employers other than for cause, death, disability
or retirement, or by Executive due to a failure by Employers to comply with any material
provision of this Agreement, which failure has not been cured within thirty (30) days after
notice of such non-compliance has been given by Executive to Employers, then following the
Termination Date:
(A) In lieu of any further salary payments to Executive subsequent to the
Termination Date, Executive shall receive Severance Pay for a thirty-six (36) month
period in accordance with the Employers’ normal payroll practices, beginning with
the first pay date following the Termination Date. The monthly rate of Severance
Pay shall be the average monthly Base Salary received by Executive (based on his
highest rate of Base Salary within the 3 years preceding his Termination Date) plus
one-twelfth of the total bonus and incentive compensation paid to or vested in
Executive on the basis of his most recently completed calendar year of employment.
(B) Employers shall maintain and provide for the period during which Severance
Pay is payable and ending at the earlier of (i) the expiration of such period, or
(ii) the date of the Executive’s full-time employment by another employer (provided
that 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 (i) all group life, health
and accident and disability insurance and, (ii) all other employee benefit plans,
programs and arrangements in which Executive was entitled to participate immediately
prior to the Termination Date (other than retirement plans, deferred compensation,
or stock compensation plans of the Employers); provided that in
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the event Executive’s participation in any plan, program or arrangement as
provided in this Subparagraph (B) 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 Termination Date.
(C) In addition to such Severance Pay and continued benefits, Executive shall
receive all other compensation and benefits in which he was vested or to which he
was otherwise entitled under Section 4 and the plans and programs provided therein
by reason of employment through the Termination Date.
6. Termination After Change in Control.
(i) Definition “Change in Control”. For purposes of this Agreement, a “change
in control” shall mean any change in control with respect to the Bank or Company that would
be required to be reported in response to Item 6(e) of Schedule l4A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”) or any
successor thereto; provided that, without limitation, a change in control shall be deemed to
have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities representing 25% or more of the
combined voting power of the Bank’s or Company’s then outstanding securities; or (ii) during
any period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Bank or Company 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.
(ii) Good Reason for Executive Termination. The Executive may terminate his
employment under this Agreement for “good reason” by giving at least thirty (30) days prior
written notice to the Bank or any successor employer at any time within twenty-four (24)
months of the effective date of a change in control. Occurrence of any of the following
events shall constitute good reason:
(A) Without the Executive’s express written consent, assignment by the
Employers of any duties which are materially inconsistent with Executive’s
positions, duties, responsibilities and status with the Employers immediately prior
to a change in control, or a material change in the Executive’s reporting
responsibilities, titles or offices as in effect immediately prior to such change in
control, or any removal of the Executive from or any failure to re-elect the
Executive to all or any portion of his Corporate Positions, except in connection
with a termination of Executive’s employment for cause, disability, retirement or
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death (or by the Executive other than for good reason as defined in this
Section 6(B)).
(B) Without the Executive’s express written consent, a reduction by the
Employers in the Executive’s most recent effective rate of compensation (which for
purposes of this subsection shall be treated as his rate of Base Salary in effect on
the date of the change in control plus the total of the bonus and incentive
compensation paid to or vested in Executive on the basis of his most recently
completed calendar year of employment);
(C) The principal executive offices of either of the Employers are relocated
outside of the Madison, Wisconsin metropolitan area or, without the Executive’s
express written consent, the Employers require the Executive to be based anywhere
other than an area in which the Employers’ principal executives offices are located,
except for required travel on business of the Employers to an extent substantially
consistent with the Executive’s present business travel obligations;
(D) Without Executive’s express written consent, the Employers fail or refuse
to continue Executive’s participation in incentive compensation and stock incentive
programs comparable to either (i) those in effect prior to the change in control, or
(ii) those subsequently in effect for the senior executives of any acquiring company
effecting the change in control;
(E) Without Executive’s express written consent, Employers fail to provide the
Executive with the same fringe benefits that were provided to Executive immediately
prior to a change in control, or with a package of fringe benefits (including paid
vacations) that, though one or more of such benefits may vary from those in effect
immediately prior to such change in control, is substantially comparable in all
material respects to such fringe benefits taken as a whole;
(F) Any purported termination of the Executive’s employment for cause,
disability or retirement which is not effected in accordance with the notice
requirements applicable under this Agreement; or a failure by the Employers to
comply with any other material provisions of this Agreement which has not been cured
within thirty (30) days after notice of such noncompliance has been given by
Executive to the Employers;
(G) The failure by either of the Employers to obtain the assumption of, or an
agreement to perform this Agreement by any successor as contemplated in Section 7(i)
hereof.
(iii) Termination After a “Change in Control.” This Agreement may be terminated
by either of the Employers (or any successor employer) or the Executive following a change
in control, subject to the payment of the compensation and other benefits specified in
Section 5 hereof or described below, as applicable. If Executive’s
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employment shall be terminated subsequent to a change in control by (i) either of the
Employers other than for cause, disability, retirement or as a result of the Executive’s
death, or (ii) the Executive for good reason, then, subject to the provisions of Section
6(iv) hereof if applicable:
(A) In lieu of any further salary payments to Executive subsequent to the
Termination Date, Executive shall receive Severance Pay for a thirty-six (36) month
period. Payments shall be made in accordance with the Employers’ normal payroll
practices, beginning with the first pay date following the Termination Date. The
monthly rate of Severance Pay shall be the average monthly Base Salary received by
Executive (based on his highest rate of Base Salary within the 3 years preceding his
Termination Date) plus one-twelfth of the total bonus and incentive compensation
paid to or vested in Executive on the basis of his most recently completed calendar
year of employment.
(B) Employers shall maintain and provide for the period during which Severance
Payments are to be made and ending at the earlier of (i) the expiration of such
period, 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 other 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 life,
health and accident and disability insurance and all other employee benefit plans,
programs and arrangements in which the Executive was entitled to participate
immediately prior to the Termination Date (other than retirement and deferred
compensation plans and individual insurance policies covered under Subsection
6(iii)(C) or stock compensation plans of the Employers), provided that in the event
Executive’s participation in any plan, program or arrangement as provided in this
Subparagraph (B) 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 Executive with benefits substantially similar to
those Executive was entitled to receive under such plans, programs and arrangements
immediately prior to the Termination Date.
(C) Executive shall also receive all other compensation and benefits in which
he was vested or to which he was otherwise entitled under section 4 and the plans
and programs provided therein by reason of employment through the Termination Date.
In addition to benefits to which Executive is entitled under retirement and deferred
compensation plans and individual insurance policies maintained by Employers
(hereinafter collectively referred to as “Plan”), Executive shall receive, to the
extent a benefit previously provided cannot be continued or extended through the
Severance Pay period in its current form, as additional severance benefits a benefit
paid under this Agreement, which benefit (other than the additional SERP benefit)
shall be determined in accordance with and paid under this Agreement, but in the
form and at the times provided in the Plan. Such benefits (other than the
additional SERP benefit) shall be determined as if Executive were fully vested under
the Plan and had accumulated (after any
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termination under this Agreement) the additional years of credit service under
the applicable Plan that he would have received had he continued in the employment
of the Bank for the period during which Severance Payments are to be made and at the
annual compensation level represented by such payments. The additional SERP benefit
will be paid immediately following the Termination Date with the additional SERP
benefit determined by including the three years during which Severance Payments are
made in the ten years which are used for determining final Average Earnings under
the SERP. Such Severance Payment level shall be deemed to represent the
compensation received by Executive during each such additional year for purposes of
determining his additional benefits under this Subsection 6(iii)(C).
(iv) Limitation of Benefits Under Certain Circumstances. If the severance
benefits payable to Executive under this Section 6 (“Severance Benefits”), or any other
payments or benefits received or to be received by Executive from Employers (whether payable
pursuant to the terms of this Agreement, any other plan, agreement or arrangement with the
Employers or any corporation affiliated with the Employers (“Affiliate”) within the meaning
of Section 1504 of the Internal Revenue Code of 1954, as amended (the “Code”)), in the
opinion of tax counsel selected by the Employer’s independent auditors and acceptable to
Executive, constitute “parachute payments” within the meaning of Section 280G(b)(2) of the
Code, and the present value of such “parachute payments” equals or exceeds three times the
average of the annual compensation payable to Executive by the Employers (or an Affiliate)
and includable in Executive’s gross income for federal income tax purposes for the five (5)
calendar years preceding the year in which a change in ownership or control of the Employers
occurred (“Base Amount”), such Severance Benefits shall be reduced, in a manner determined
by Executive, to an amount the present value of which (when combined with the present value
of any other payments or benefits otherwise received or to be received by Executive from the
Employers (or an Affiliate) that are deemed “parachute payments”) is equal to 2.99 times the
Base Amount, notwithstanding any other provision to the contrary in this Agreement. The
Severance Benefits shall not be reduced if (A) Executive shall have effectively waived his
receipt or enjoyment of any such payment or benefit which triggered the applicability of
this Section 6(iv), or (B) in the opinion of such tax counsel, the Severance Benefits (in
its full amount or as partially reduced, as the case may be) plus all other payments or
benefits which constitute “parachute payments” within the meaning of Section 280G(b)(2) of
the Code are reasonable compensation for services actually rendered, within the meaning of
Section 280G(b)(4) of the code, and such payments are deductible by the Employers. The Base
Amount shall include every type and form of compensation includable in Executive’s gross
income in respect of his employment by the Employers (or an Affiliate), except to the extent
otherwise provided in temporary or final regulations promulgated under Section 280G(b) of
the Code. For purposes of this Section 6(iv), a “change in ownership or control” shall have
the meaning set forth in Section 280G(b) of the Code and any temporary or final regulations
promulgated thereunder. The present value of any non-cash benefit or any deferred cash
payment shall be determined by the Employers’ independent auditors in accordance with the
principles of Sections 280G(b)(3) and (4) of the Code.
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In the event that Employers and/or the Executive do not agree with the opinion of such
counsel, (A) Employers shall pay to the Executive the maximum amount of payments and
benefits pursuant to Section 6, as selected by the Executive, which such opinion indicates
that there is a high probability do not result in any of such payments and benefits being
non-deductible to the Employers and subject to the imposition of the excise tax imposed
under Section 4999 of the Code and (B) Employers may request, and Executive shall have the
right to demand the Employers request, a ruling from the IRS as to whether the disputed
payments and benefits pursuant to Section 6 hereof have such consequences. Any such request
for a ruling from the IRS shall be promptly prepared and filed by the Employers, but in no
event later than thirty (30) days from the date of the opinion of counsel referred to above,
and shall be subject to Executive’s approval prior to filing, which shall not be
unreasonably withheld. Employers and Executive agree to be bound by any ruling received
from the IRS and to make appropriate payments to each other to reflect any such rulings,
together with interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code. Nothing contained herein shall result in a reduction of any payments or benefits
to which the Executive may be entitled upon termination of employment under any
circumstances other than as specified herein or a reduction in payments and benefits other
than those provided in this Section 6.
In the event that Section 280G, or any successor statute, is repealed, this Section 6
shall cease to be effective on the effective date of such repeal. The parties to this
Agreement recognize that final regulations under Section 280G of the Code may affect the
amounts that may be paid under this Agreement and agreed that, upon issuance of such final
regulations this Agreement may be modified as in good faith deemed necessary in light of the
provisions of such regulations to achieve the purposes of this Agreement, and that consent
to such modifications shall not be unreasonably withheld.
7. General Provisions.
(i) Successors; Binding Agreement.
(A) Employers will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Employers (“successor organization”) to expressly
assume and agree to perform this Agreement in the same manner and to the same extent
that Employers would have been required to perform if no such succession had taken
place or to re-execute this Agreement as provided pursuant to Section 6(ii)(G). If
such succession is the result of a “change in control” as defined herein, such
assumption shall specifically preserve to Executive, for the greater of twenty-four
(24) months or the then remaining term of this Agreement, the same rights and
remedies (recognizing them as being available and applicable as the result of the
“change in control” effectuating said succession) as provided under this Agreement
upon a “change in control”.
As used in this Agreement “Employers” shall mean the Employers as hereinbefore
defined (and any successor to their business and/or assets) which executes and
delivers the agreement provided for in this Section 7 or which
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otherwise becomes bound by the terms and provisions of this Agreement by
operation of this Agreement or law. Failure of the Employers to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive, if he elects to terminate this
Agreement, to compensation from the Employers in the same amount and on the same
terms as he would be entitled to under this Agreement if he terminated his
employment under Section 6. For purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Termination Date.
(B) No right or interest to or in any payments or benefits under this Agreement
shall be assignable or transferable in any respect by the Executive, nor shall any
such payment, right or interest be subject to seizure, attachment or creditor’s
process for payment of any debts, judgments, or obligations of Executive.
(C) This Agreement shall be binding upon and inure to the benefit of and be
enforceable by (1) Executive and his heirs, beneficiaries and personal
representatives, and (2) the Employers and any successor organization.
(ii) Noncompetition Provision. Executive acknowledges that the development of
personal contacts and relationships is an essential element of the savings and loan
business, that Employers has invested considerable time and money in his development of such
contacts and relationships, that Employers could suffer irreparable harm if he were to leave
employment and solicit the business of the Employers customers, and that it is reasonable to
protect the Employers against competitive activities by Executive. Executive covenants and
agrees, in mutual promises contained herein, that in the event of a voluntary termination of
employment by Executive pursuant to Section 5(iv), or upon expiration of this Agreement as a
result of Executive’s election (but not as the result of an election by Employers) not to
continue automatic annual renewals, Executive shall not accept employment with any
Competitor of Bank for a period of twelve (12) months following such termination in any
county in which the Bank both (i) has deposits of $50,000,000 or more, and (ii) has
originated mortgage loans of $100,000,000 or more during any consecutive twelve (12) month
period within the past twenty-four (24) months. For purposes of this Agreement, the term
Competitor means any financial institution including, but not limited to, any commercial
bank, savings bank, savings and loan association, credit union, or mortgage banking
corporation.
Executive agrees that the non-competition provisions set forth herein are necessary for
the protection of the Employers and are reasonably limited as to (i) the scope of activities
affected, (ii) their duration and geographic scope, and (iii) their effect on Executive and
the public. In the event Executive violates the non-competition provisions set forth
herein, the Employers shall be entitled, in addition to its other legal remedies, to enjoin
the employment of Executive with any Significant Competitor for the period set forth herein.
If Executive violates this covenant and the Employers bring legal action for injunctive or
other relief, the Employers shall not, as a result of the time involved in obtaining such
relief, be deprived of the benefit of the full period of the
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restrictive covenant. Accordingly, the covenant shall be deemed to have the duration
specified herein, computed from the date such relief is granted, but reduced by any period
between commencement of the period and the date of the first violation.
(iii) Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail, return receipt
requested, posted prepaid, addressed as follows:
| If to the Bank: | AnchorBank, fsb | |||||
| 00 Xxxx Xxxx Xxxxxx | ||||||
| Xxxxxxx, Xxxxxxxxx 00000 | ||||||
| If to the Executive: | Xxxx X. Xxxxxxxxx | |||||
| 0000 Xxx Xxxx Xxxxx | ||||||
| Xxxxxx, Xxxxxxxxx 00000 |
or to such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective only upon
receipt.
(iv) Expenses. If any legal proceeding is necessary to enforce or interpret
the terms of this Agreement (or to recover damages for breach of it), the prevailing party
shall be entitled to recover from the other party reasonable attorneys’ fees and necessary
costs and disbursements incurred in such litigation, in addition to any other relief to
which such prevailing party may be entitled.
Notwithstanding the foregoing, in the event of a legal proceeding to enforce or interpret
the terms of this Agreement following a change in control, Executive shall be entitled to
recover from Bank or any successor thereto, regardless of the outcome of said action,
necessary costs and disbursements incurred together with actual attorney’s fees up to the
greater of (A) $25,000, or (B) thirty percent (30%) of the amount in dispute between the
parties [which amount, for purposes of this Agreement, shall be deemed to be the difference
between the highest written settlement offer from the Bank and the lowest written settlement
offer (exclusive of any claim for consequential, punitive, or other forms or amounts of
damages not based on specific contract terms) from Executive]. Recovery by Executive of
attorney’s fees and costs as provided herein following a change in control shall be in
addition to any other relief to which Executive may be entitled.
(v) Withholding. Employers shall be entitled to withhold from amounts to be
paid to Executive under this Agreement any federal, state, or local withholding or other
taxes or charges which it is from time to tune required to withhold. Employers shall be
entitled to rely on an opinion of counsel if any question as to the amount or requirement of
any such withholding shall arise.
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(vi) Notice of Termination. Any purported termination by the Employers under
Sections 5(i) (in the case of retirement), (ii), (iii) or (vi), or Section 6(iii), or by
Executive under Sections 5(i) (in the case of retirement) (iii), (iv) or (vi) or 6(u) shall
be communicated by written “Notice of Termination” to the other party. 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 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 termination of Executive’s employment for Cause; and (iv) is, given in the
manner specified in Section 7(iii) of this Agreement.
(vii) Miscellaneous. No provision of this Agreement may be amended, waived or
discharged unless such amendment, waiver or discharge is agreed to in writing and signed by
Executive and such officers of the Employers as may be specifically designated by the Board.
No waiver by either party hereto at any time of any breach by the 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. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by either party
which are not expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of the State of
Wisconsin.
(viii) Mitigation: Exclusivity of Benefits. 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 Termination Date or
otherwise.
(ix) Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
(x) Counterparts. This Agreement may be executed in several counterparts, each
of which together will constitute one and the same instrument.
(xi) Headings. Headings contained in this Agreement are for reference only and
shall not affect the meaning or interpretation of any provision of this Agreement.
(xii) Effective Date. The effective date of this Agreement shall be the date
indicated in the first section of this Agreement, notwithstanding the actual date of
execution by any xxxxx.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the date first
above written
| Executive: | ||||||
| /s/ Xxxx X. Xxxxxxxxx | ||||||
| Xxxx X. Xxxxxxxxx | ||||||
| ANCHORBANK, fsb | ||||||
| (CORPORATE SEAL) | ||||||
| By: | /s/ J. Xxxxxxx Xxxxxxxxx | |||||
| Its: | Executive Vice President, Marketing and Retail Administration | |||||
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