AMENDMENT TO THE NEWPORT FEDERAL SAVINGS BANK EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDMENT TO THE
NEWPORT FEDERAL SAVINGS BANK
WHEREAS, Xxxxx X. XxXxxxxx (the “Executive”) entered into an employment
agreement with Newport Federal Savings Bank (the “Bank”) effective October 15, 2005 (the
“Agreement”); and
WHEREAS, in connection with the mutual to stock conversion of the Bank, the Bank
and the Executive desire to amend the Agreement to include Newport Bancorp, Inc. (the
“Company”) as a guarantor of the payments under the Agreement and to facilitate some
ministerial changes, including a change to the definition of Termination for Cause requested by
the Office of Thrift Supervision; and
WHEREAS, the Agreement provides that the Agreement may be amended or modified
at any time prior to a Change in Control by means of a written instrument signed by the parties.
NOW, THEREFORE, the Bank and the Executive hereby agree to amend the
Agreement as follows:
FIRST CHANGE
Effective as of the closing of the Company’s initial public offering, the first
paragraph of the Agreement shall be amended to add the following sentence to the end of
the paragraph:
“Newport Bancorp, Inc., the holding company of the Bank (the “Holding
Company”) will serve as guarantor under this Agreement.”
SECOND CHANGE
Effective as of the closing of the Company’s initial public offering, Section 12(a)
shall be deleted in its entirety and replaced with the following new Section 12(a):
“For purposes of this Agreement, a “Change in Control” means the occurrence of
any one of the following events:
(1) Merger: The Company or the Bank merges into or consolidates with another
corporation, or merges another corporation into the Company or the Bank, and as a result less
than a majority of the combined voting power of the resulting corporation immediately after the
merger or consolidation is held by persons who were stockholders of the Company or the Bank
immediately before the merger or consolidation.
(2) Acquisition of Significant Share Ownership: The Company files, or is required to
file, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required
under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses
that the filing person or persons acting in concert has or have become the beneficial owner of
25% or more of a class of the Company’s voting securities, but this clause (b) shall not apply to
beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of
which the Company directly or indirectly beneficially owns 50% or more of its outstanding
voting securities.
(3) Change in Board Composition: During any period of two consecutive years,
individuals who constitute the Company’s or the Bank’s Board of Directors at the beginning of
the two-year period cease for any reason to constitute at least a majority of the Company’s or the
Bank’s Board of Directors; provided, however, that for purposes of this clause (iii), each director
who is first elected by the board (or first nominated by the board for election by the
stockholders) by a vote of at least two-thirds of the directors who were directors at the beginning
of the two-year period shall be deemed to have also been a director at the beginning of such
period;
(4) Sale of Assets: The Company or the Bank sells to a third party all or substantially
all of its assets.
THIRD CHANGE
Effective as of the closing of the Company’s initial public offering, the following
Section 27 shall be added to the Agreement:
“27. Source of Payments.
| a. |
All payments provided for in this Agreement shall be timely paid in cash or check |
from the general funds of the Bank. The Company, however, unconditionally
guarantees payment and provision of all amounts and benefits due hereunder to
Executive and, if such amounts and benefits due from the Bank are not timely
paid or provided by the Bank, such amounts and benefits shall be paid or provided
by the Company.
| b. |
Notwithstanding any provision herein to the contrary, to the extent that payments |
and benefits, as provided by this Agreement, are paid to or received by Executive
under the Employment Agreement in effect between Executive and the Company
(the “Company Agreement”), such compensation payments and benefits paid by
the Company will be subtracted from any amount due simultaneously to
Executive under similar provisions of this Agreement. Payments pursuant to this
Agreement and the Company Agreement shall be allocated in proportion to the
level of activity and the time expended on such activities by Executive as
determined by the Company and the Bank.”
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FOURTH CHANGE
Effective June 27, 2006, Section 11(d)(i)(6) of the Agreement shall be deleted in its
entirety and replaced with the following new Section 11(d)(i)(6):
“(6) Willful violation of any law, rule or regulation (other than traffic violations or
similar offenses) any felony conviction or final cease-and-desist order, or material breach of any
provision of this Agreement; or”
IN WITNESS WHEREOF, the Bank has caused this Amendment to the Agreement to
be executed by its duly authorized officer, and Executive has signed this Amendment, on the 18th
day of July, 2006.
| ATTEST: |
NEWPORT FEDERAL SAVINGS BANK | |||
| /s/ Xxxx Xxxxxx |
/s/ Xxxxx X. Xxxxxx | |||
| For the Board of Directors | ||||
| NEWPORT BANCORP, INC. | ||||
| (as guarantor) | ||||
| /s/ Xxxxx X. Xxxxxx | ||||
| For the Board of Directors | ||||
| WITNESS: |
EXECUTIVE | |||
| /s/ Xxxx Xxxxxx |
/s/ Xxxxx X. XxXxxxxx | |||
| Xxxxx X. XxXxxxxx | ||||
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