EXHIBIT 10.7-B
STANDARD FINANCIAL, INC.
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (this "Agreement")
is entered into as of October 16, 1996 (the "Effective
Date"), by and between Standard Financial, Inc. ("Holding
Company") and Xxxxxx X. Xxxx ("Executive").
WHEREAS, Executive has been elected to and has
agreed to serve in the position of Senior Vice President
and Chief Financial Officer for Standard Federal Bank for
savings ("SFB"), a wholly owned subsidiary of Holding
Company, a position of substantial responsibility;
WHEREAS, Holding Company considers the establishment
and maintenance of sound and vital senior management to
be essential to protecting and enhancing its best
interests and therefore desires to protect Executive's
position therewith for the period provided in this
Agreement; and
WHEREAS, the Board of Directors of Holding Company
has considered and approved this Agreement with respect
to Executive's employment.
NOW, THEREFORE, in consideration of the contribution
and responsibilities of Executive, and upon the other
terms and conditions hereinafter provided, the parties
hereto agree as follows:
Section 1 - Definitions
1.1 A "Change in Control" shall mean:
(a) during any period of two (2) consecutive
years, individuals who at the beginning of such period
constitute the Board of Directors of Holding Company or
SFB cease for any reason to constitute a majority
thereof, unless the election or nomination for election
of each new Director was approved by a vote of at least
two-thirds of the Board members then still in office who
were Board members at the beginning of the period or who
were similarly nominated;
(b) a change in control of Holding Company or
SFB as described in 12 C.F.R. SECTION 574.4(a) occurs;
(c) the Board of Directors of Holding Company
or SFB adopts a resolution to the effect that a Change in
Control of Holding Company or SFB for purposes of this
Agreement has occurred;
(d) an event of a nature that Holding Company
would be required to report in response to item 1(a) of
the current report on Form 8-K as in effect on the date
of this Agreement, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") occurs;
(e) 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 such term is defined
in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of Holding Company or SFB
representing twenty percent (20%) or more of Holding
Company's or SFB's outstanding securities, except for any
securities purchased by SFB's employee stock ownership
plan and trust and any person who becomes a twenty
percent (20%) beneficial owner solely as a result of
stock repurchases by Holding Company; or
(f) a plan of reorganization, merger,
consolidation, sale or liquidation of all or
substantially all assets of Holding Company or SFB or a
similar transaction occurs in which Holding Company or
SFB is not the resulting entity.
1.2 The "Code" shall mean the Internal Revenue Code
of 1986, as amended.
1.3 "Date of Termination" shall mean the date
specified in the Notice of Termination.
1.4 "Disability" shall mean Executive's inability
for a period of not less than ninety (90) consecutive
days, due to accident or physical or mental illness, to
adequately and fully perform the duties required by an
employee in Executive's position; provided, however, that
Disability for purposes of this Agreement shall not
include any Disability which results from Executive's
engaging in a criminal enterprise or from Executive's
habitual drunkenness, addiction to narcotics or
intentionally inflicted injury. If at any time during
the Term, the Holding Company Board makes a determination
with respect to Executive's Disability, that
determination shall be final, conclusive, and binding
upon Holding Company, SFB, Executive, and their
successors in interest, so long as such determination has
a reasonable basis.
1.5 "Good Reason" shall be deemed to exist if:
(a) within two (2) years after a Change in
Control, without Executive's express written consent,
Executive is assigned any duties inconsistent in any
material respect with Executive's positions, duties,
responsibilities and status with Holding Company or SFB
immediately prior to a Change in Control of Holding
Company or SFB; Executive's reporting responsibilities,
titles or offices as in effect immediately prior to a
Change in Control of Holding Company or SFB are changed
in any material respect; the Term of this Agreement is
not restored to three (3) years under Section 2.1 of this
Agreement; or executive is removed from or is not re-
elected to any of such positions, except in connection
with the termination of Executive's employment (1) for
Cause, (2) on account of Disability, (3) as a result of
Executive's death, or (4) by Executive other than for
Good Reason;
(b) within two (2) years after a Change in
Control, Holding Company's or SFB's principal executive
offices are relocated to a location at least thirty (30)
miles from its current location; or Holding Company or
SFB requires Executive to be based anywhere other than in
the Chicago, Illinois metropolitan area, except for
required travel on Holding Company's or SFB's business to
an extent substantially consistent with similarly
situated executives' business travel obligations;
(c) within two (2) years after a Change of
Control, Holding Company or SFB reduces in any material
respect the base salary of Executive, Holding Company or
SFB fails to continue in effect any material benefit or
compensation plan, pension plan, life insurance plan,
health and accident plan or disability plan in which
Executive is participating at the time of a Change of
Control (or plans providing Executive with substantially
similar benefits), or Holding Company or SFB takes any
action which would materially adversely affect
Executive's participation in or materially reduce
Executive's benefits under any benefit plan maintained by
Holding Company or SFB or deprive Executive of any
material fringe benefits;
(d) Holding Company and SFB fail to obtain the
assumption of all obligations under the Agreement by any
successor as contemplated in Section 2.3 of the
Agreement; or
(e) within two (2) years after a Change in
Control, Executive's employment is purported to be
terminated in a manner which is not pursuant to a Notice
of Termination satisfying the requirements of Section 2.5
of this Agreement.
1.6 The "Holding Company Board" shall mean the
Board of Directors of Holding Company.
1.7 "Notice of Termination" shall mean a notice,
from Holding Company or from Executive, which shall
indicate the specific termination provision in this
Agreement relied upon, shall set forth in reasonable
detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the
provision so indicated and shall state the effective date
of the termination.
1.8 Termination for "Cause" by Holding Company of
Executive's employment under this Agreement shall have
the same meaning as it does in 12 C.F.R SECTION 563.39, and
shall include termination because of:
(a) The intentional and substantial failure by
Executive to perform Executive's duties with Holding
Company or SFB (other than any such failure resulting
from incapacity due to physical or mental illness); or
(b) Executive's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary
duty involving personal profit, willful violation of any
law, rule or regulation (other than traffic violations or
similar offenses) or cease-and-desist order or material
breach of any provision of this Agreement.
Notwithstanding the foregoing, Executive shall not
be deemed to have been terminated for Cause unless and
until there shall have been delivered to Executive a
written notice of the intention to terminate his
employment for Cause specifying the grounds for such
termination, providing a reasonable opportunity to cure
any conduct or act, if curable, alleged as grounds for
such termination, and a reasonable opportunity to present
to the Holding Company Board his position regarding any
dispute relating to the existence of such Cause.
Section 2 - Term
2.1 Term. Subject to extension in accordance with
this Section 2, the term of this Agreement (the "Term")
shall be the three-year period beginning on October 16,
1996 (the "Effective Date") and ending on October 15,
1999. On or before each anniversary of the Effective
Date (each an "Anniversary Date"), the Holding Company
Board shall review Executive's performance under this
Agreement to determine whether Holding Company desires
that the Term of this Agreement be restored to three (3)
years. If the Holding Company Board recommends, then the
then-remaining Term of this Agreement shall be restored
to the three-year term beginning on such Anniversary
Date.
2.2 Compensation Upon Termination For Good Reason
or Following Change in Control.
(a) If: (i) Executive terminates employment
and Good Reason exists; (ii) any of the events
constituting a Change in Control shall have occurred and
Executive's employment is terminated within two (2) years
thereafter other than by reason of (A) Executive's death
or Disability, or (B) termination for Cause; or (iii) any
of the events constituting a Change in Control shall have
occurred and Executive's employment is terminated by
Executive within one (1) year after a Change in Control;
then Executive shall receive as severance compensation in
a lump sum (discounted to present value from the date
such amounts would have been paid if Executive's
employment had continued for three (3) years from the
date of such termination using the interest rate then
applicable to newly issued fixed rate three-year
certificates of deposit at SFB, Chicago, Illinois) on the
thirtieth day following the Date of Termination:
I. the unpaid balance of Executive's full
Base Compensation through the Date of
Termination at the rate in effect at the
time Notice of Termination is given; plus
II. an amount equal to Executive's full Base
Compensation for three (3) years at the
rate in effect as of the Date of
Termination; plus
III. an amount, if any, equal to three (3)
times the Executive's highest Bonus
Compensation paid in either of the two (2)
previous years.
(b) In addition to the severance benefits set
forth in I, II and III above, Holding Company shall: (x)
pay all legal fees and expenses incurred by Executive
resulting from termination (including all such fees and
expenses, if any, incurred in contesting any such
termination or in seeking to obtain or enforce any right
or benefit provided by this Agreement); and (y) to the
extent that Executive's continued participation is
possible under the general terms and provisions of such
plans and programs, maintain in full force and effect,
for the continued benefit of Executive for the remaining
Term after the Date of Termination and, in the case of
medical insurance, until such time as Executive is
covered by Medicare or another comparable insurance
program, all employee benefit plans and programs or
arrangements in which Executive was entitled to
participate immediately prior to the Date of Termination.
If Executive's continued participation in any such plan
or program is barred, Holding Company shall arrange to
provide Executive with benefits substantially similar or,
if that is not possible, of equal value, to those which
Executive was entitled to receive under such plans and
programs. At the end of the period of coverage,
Executive shall have the option to have assigned to him
at no cost and with no apportionment of prepaid premiums
any assignable insurance policies owned by Holding
Company and/or SFB relating specifically to Executive.
(c) Executive shall not be required to
mitigate the amount of any payment provided for in this
Section 2.2 by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this
Section 2.2 be reduced by any compensation earned by
Executive as the result of employment by another employer
after the Date of Termination or otherwise.
2.3 Successors of Holding Company. Holding Company
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
Holding Company or SFB, by agreement in form and
substance satisfactory to Executive, expressly to assume
and agree to perform this Agreement in the same manner
and to the same extent that Holding Company would be
required to perform it if no such succession had taken
place. As used in this Agreement, "Holding Company"
shall mean Holding Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid
or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
2.4 Payment Adjustment. If the independent
accountants acting as auditors for Holding Company on the
date of a Change in Control (or another accounting firm
designated by the parties) determine, in consultation
with legal counsel acceptable to the parties, that any
amount payable to Executive by Holding Company under this
Agreement, or any other plan or agreement under which
Executive participates or is a party, would constitute an
"excess parachute payment" within the meaning of Section
280G of the Code, and any regulations thereunder, and be
subject to the "excise tax" imposed by Section 4999 of
the Code, Holding Company shall pay to Executive the
amount of such excise tax and all federal and state
income or other taxes with respect to the payment of the
amount of such excise tax, including all such taxes with
respect to any such additional amount. If at a later
date, the Internal Revenue Service assesses a deficiency
against Executive for the excise tax which is greater
than that which was determined at the time such amounts
were paid, if any, Holding Company shall pay to Executive
the amount of such excise tax plus any interest,
penalties and professional fees or expenses, incurred by
Executive as a result of such assessment, including all
such taxes with respect to any such additional amount.
The highest marginal tax rate applicable to individuals
at the time of payment of such amounts will be used for
purposes of determining the federal and state income and
other taxes with respect thereto. Holding Company shall
withhold from any amounts paid under this Agreement the
amount of any excise tax or other federal, state or local
taxes then required to be withheld. Computations of the
amount of any supplemental compensation paid under this
Section 2.4 shall be made by the independent public
accountants then regularly retained by Holding Company,
in consultation with legal counsel acceptable to the
parties. Holding Company shall pay all accountant and
legal counsel fees and expenses.
2.5 Notice of Termination. Any termination by
Holding Company or by Executive shall be communicated by
written Notice of Termination to the other party hereto.
Section 3 - Miscellaneous
3.1 Notice. Any notice or request required or
permitted to be given under this Agreement shall be in
writing and shall be deemed sufficiently given for all
purposes if mailed by certified mail, postage prepaid and
return receipt requested, addressed to the intended
recipient at the following address (or at such other
address as either party may designate in writing to the
other party by certified mail as described above):
If to Holding Company:
Standard Financial, Inc.
000 Xxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000-0000
All notices to Holding Company shall be directed to the
attention of the President with a copy to the Treasurer.
If to Executive:
Xxxxxx X. Xxxx
_________________________
_________________________
3.2 Headings. The headings used in this Agreement
have been included solely for ease of reference and are
not to be construed in any interpretation of this
Agreement.
3.3 Entire Agreement. This instrument contains the
entire agreement between the parties with respect to the
subject matter hereof, and shall supersede all prior
understanding with respect to the subject matter hereof.
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 set
forth expressly in this Agreement. No modification or
addition to this Agreement shall be enforceable unless in
writing and signed by the party against whom enforcement
is sought.
3.4 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of
the State of Illinois.
3.5 Arbitration. Any dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a
panel of three arbitrators sitting in a home office
selected by Executive within fifty (50) miles from the
location of Holding Company, in accordance with the rules
of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator's award in any
court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance
of his right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising
under or in connection with this Agreement.
In the event any dispute or controversy arising
under or in connection with Executive's termination is
resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to
the payment of all back-pay, including salary, bonuses
and any other cash compensation, fringe benefits and any
compensation and benefits due Executive under this
Agreement and all fees and expenses incurred in seeking
to obtain or enforce the rights and benefits provided by
this Agreement.
3.6 Benefit. This Agreement shall inure to the
benefit of and shall be binding upon Holding Company, its
successors and assigns, and this Agreement shall not be
assignable by Executive.
3.7 Severability. If any provision of this
Agreement is held to be invalid, illegal or unenforceable
in any respect, the validity and enforceability of all
other applications of that provision and of all other
provisions and applications hereof shall not in any way
be affected or impaired.
3.8 Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and
signed by Executive and such officer as may be
specifically designated by the Board of Directors of
Holding Company. The failure of Holding Company or
Executive at any time or times to enforce its rights
under the Agreement strictly in accordance with the same
shall not be construed as having created a custom in any
way or manner contrary to the specific provisions of this
Agreement or as having in any way or manner modified or
waived the same. 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 any prior or subsequent time.
3.9 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.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement, as of the day and year first above
written.
STANDARD FINANCIAL INC.
By: __________________________
Title: _______________________
XXXXXX X. XXXX
______________________________
