ANCHOR BANCORP WISCONSIN, INC. EMPLOYMENT AGREEMENT
EXHIBIT 10.1
ANCHOR BANCORP WISCONSIN, INC.
THIS EMPLOYMENT AGREEMENT is effective as of August 22, 2005 between Anchor BanCorp Wisconsin,
Inc. (hereinafter referred to as the “Company”), having its principal offices located at 00 Xxxx
Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, and Xxxx X. Xxxxxxxxx (the “Executive”).
RECITALS
WHEREAS, Executive is a key employee, whose background, knowledge and experience in the
financial services industry has substantially benefited both Anchor Bank, fsb (the “Bank”) and the
Company and whose continued employment as an executive member of their management teams in the
positions of President and Chief Operating Officer of the Bank and Executive Vice President,
Secretary and General Counsel of the Company (collectively the “Corporate Positions”) will continue
to benefit the Bank and Company (collectively, the “Employers”) in the future; and
WHEREAS, over the course of such employment Executive has acquired an intimate knowledge of
the business and affairs of the Employers, including their policies, markets and financial and
human resources; and
WHEREAS, the Board of Directors of the Company (the “Board”) recognizes Executive’s
contribution to the growth and success of the Company and desires to assure itself and the Bank of
Executive’s continued employment; and
WHEREAS, the parties are mutually desirous of entering into this Agreement setting forth the
terms and conditions for the employment relationship between the Company and Executive, with the
Board of Directors of the Company having authorized its entry into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below:
1. Employment. The Company shall employ Executive, and Executive shall serve the
Company, on the terms and conditions set forth in this Agreement for the period stated in paragraph
2 below.
2. Term of Employment. The period of Executive’s employment under this Agreement
shall coincide in all respects, including with respect to termination of such employment, with his
period of employment by the Bank under the employment agreement
entered into between the Bank and Executive and bearing even date herewith (the “Bank
Agreement”). The term of employment as in effect from time to time hereunder shall be referred to
as the “Employment Term”.
3. Position and Duties. Executive shall serve the Company in the Corporate Positions
as identified above. Executive shall report directly to the Company’s Board of Directors, be
nominated as a management candidate for election to the Company Board of Directors upon expiration
of each term thereon while this Agreement remains in effect, serve as a member of the Company’s
Management Committee and have such other powers and duties as may be from time to time prescribed
by the Board, provided that such duties are at all times consistent with his duties and position as
an executive officer of the Company. Executive shall devote substantially all his working time and
efforts to the business and affairs of the Company and the Bank.
4. Compensation. As compensation for services provided pursuant to this Agreement,
Executive shall receive from the Company the compensation and benefits set forth below:
(i) Base Salary. During the Employment Term, Executive shall receive a base
salary payable by the Bank (“Base Salary”) in such amount as may be from time to time
approved by the Board of Directors of the Bank; provided, however, that the Company and
Executive agree that (i) a portion of the amount received by Executive from the Bank will be
allocable to time and effort of the Executive spent on behalf of the Company pursuant to
this Agreement, and (ii) that the Company may reimburse the Bank in any such amount as may
be jointly determined by the Boards of Directors of the Company and Bank to reflect such
allocable portion. No increase in Base Salary paid by the Bank (or the amount thereof
reimbursed by the Company) or other compensation granted by the Company or Bank shall in any
way limit or reduce any other obligation of the Company under this Agreement. Executive’s
Base Salary and other compensation shall be paid in accordance with the Bank’s regular
payroll practices, as in effect from time to time.
(ii) Bonus Payments. In addition to Base Salary, 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) of the Company; 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 (except to the extent Executive had earned or
otherwise accumulated vested rights therein prior to such discontinuance).
(iii) Other Benefits. During the Employment Term, the Company shall coordinate
with the Bank to provide Executive with all such other benefits of employment (or, with
Executive’s consent, equivalent benefits) generally made available to executives of the
Company and Bank. In addition, Executive shall participate in any stock purchase, stock
option or stock appreciation rights, plans, or any other stock-based programs, made
available by the Company to its executives.
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Executive shall be entitled to vacation, sick time, personal days and other perquisites
in the same manner and to the same extent as such benefits are available under the Bank
Agreement; provided that this Agreement is intended to allow Executive to utilize the
perquisites provided pursuant to the Bank Agreement and not to create additional perquisites
hereunder.
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 paragraph 4(iii) (except to the extent Executive had previously earned or
accumulated vested rights therein) following termination or discontinuance of such plan,
program or perquisite by the Board.
5. Termination. This Agreement shall terminate upon the effective date of termination
of the Bank Agreement.
Upon termination of this Agreement, simultaneous with termination of the Bank Agreement,
Executive shall be entitled to the receipt of termination/severance benefits from the Bank as
determined under all applicable provisions of the Bank Agreement (“Severance Benefits”). The Bank
shall be primarily responsible for the payment of Severance Benefits; provided, however, that the
Company may reimburse the Bank for a portion of the cost of Executive’s Severance Benefits in any
amount jointly determined by the Boards of Directors of the Company and Bank to correspond to the
allocation of Executive’s time and effort between Bank and Company matters during the 12-month
period preceding termination of the Bank Agreement. Notwithstanding the foregoing, if the
application of Section 6 of the Bank Agreement results in Unpaid Severance as defined therein, the
Company shall be responsible for payment to Executive of the entire amount of Unpaid Severance and
shall also pay to Executive an additional amount (the “Reimbursement Payment”) such that the net
amount retained by Executive after deduction of (i) any tax imposed by Section 4999 (or any
successor provision) of the Internal Revenue Code (the “Excise Tax”) and any interest charges or
penalties in respect to imposition of such Excise Tax (but not any federal, state or local income
tax) on the Total Payments (which for purposes of this Agreement shall mean the Severance Benefits
plus any Unpaid Severance, together with any other payments and/or the value of any benefits
provided by the Bank or Company, including but not limited to any amount or value attributable to
the vesting of stock options upon Executive’s termination and to which said Excise Tax applies by
reason of Section 280G of the Code), and (ii) any federal, state and local income tax, any medicare
tax imposed under Section 3101 (or any successor provision) of the Internal Revenue Code, and any
Excise Tax upon the payment pursuant to Section 5(i) above, so that the total received by Executive
after deduction of said Excise Taxes shall be equal to the Total Payments. For purposes of
determining the amount of Reimbursement Payment, Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the calendar year in which the
Reimbursement Payment is to be made and state and local income taxes at the highest marginal rate
of taxation in the state and locality of Executive’s domicile for income tax purposes on the date
the Reimbursement Payment is made, net of the maximum reduction of federal income taxes that could
be obtained from deduction of such state and local taxes.
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6. General Provisions.
(i) Successors; Binding Agreement.
| (A) | The 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 the Company (“successor organization”) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform if no such succession had taken place. If such succession is the result of a “change in control” as defined in the Bank Agreement, such assumption shall specifically preserve to Executive, for the greater of twelve (12) months or the then remaining term under the Bank Agreement, all rights and remedies (recognizing them as being available and applicable as the result of the “change in control” effectuating said succession) provided under this Agreement which would arise in connection with a “change in control” or the effect thereof. |
As used in this Agreement “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
Section 6 or which otherwise becomes bound by the terms and provisions of
this Agreement, by operation of this Agreement, or by law. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Executive
as his exclusive remedy to compensation from the Company in the same amount
and on the same terms as he would be entitled to the same pursuant to
Section 5 of this Agreement. 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; provided, however, that in the event of Executive’s death prior to the receipt of payments or benefits payable hereunder, the Executive’s spouse or estate shall be entitled to the receipt thereof. | ||
| (C) | This Agreement shall be binding upon, inure to the benefit of, and be enforceable by Executive and his heirs, beneficiaries and personal representatives and the Company and any successor organization. |
(ii) Noncompetition. Executive acknowledges that the development of personal
contacts and relationships is an essential element of the Company’s business, that the
Company has invested considerable time and money in his development of such contacts and
relationships, that the Company could suffer irreparable harm if he were to leave employment
and solicit the business of customers of the Company or Bank, and
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that it is reasonable to protect the Company and Bank against competitive activities by
Executive. Executive covenants and agrees, in recognition of the foregoing and in
consideration of the mutual promises contained herein, that in the event of a voluntary
termination of employment by Executive pursuant to Section 5(iv) of the Bank Agreement, or
upon expiration of the Bank Agreement as a result of Executive’s election not to continue
automatic annual renewals, Executive shall not accept employment with any Competitor of the
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 Company and the Bank 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 Company 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 Company brings legal action for
injunctive or other relief, the Company shall not, as a result of the time involved in
obtaining such relief, be deprived of the benefit of the full period of the 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. In addition to such other
relief as may be awarded, if the Company is the prevailing party it shall be entitled to
reimbursement for all reasonable costs, including attorneys’ fees, incurred in enforcing its
rights hereunder.
(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 the Company, United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Company:
If to the Executive, at the address set forth below the Executive’s signature line of
this Agreement. Either party may furnish to the other in writing in accordance herewith, a
notice of change of address which shall become effective only upon receipt by the other
party.
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(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 is 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 the Company or its successor, 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 amount claimed by Executive (exclusive of any claim for
consequential, punitive, or other forms or amounts of damages not based on specific contract
terms) and the highest written offer received by Executive from the Company or its
successor]. 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. The Company shall be entitled to withhold from amounts to be
paid to Executive under this Agreement any federal, state, or local withholding or other
taxes of charges which it is from time to time required to withhold. The Company 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.
(vi) 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 Company officer 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; provided, however, that the parties
acknowledge the Bank Agreement is a separate employment agreement between Executive and the
Bank and that nothing contained herein is intended to supercede or extinguish any of the
rights or obligations created therein. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of Wisconsin.
(vii) 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.
(viii) Counterparts. This Agreement may be executed in several counterparts,
each of which together will constitute one and the same instrument.
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(ix) Headings. Headings contained in this Agreement are for reference only and
shall not affect the meaning or interpretation of any provision of this Agreement.
(x) Effective Date. The effective date of this Agreement shall be the date
indicated in the first section of this Agreement, notwithstanding that the actual date of
execution by any party may differ therefrom.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of this 22 day of
August, 2005.
| Anchor BanCorp Wisconsin, Inc. | Executive: | |||
By: |
/s/ J. Xxxxxxx Xxxxxxxxx | /s/ Xxxx X. Xxxxxxxxx | ||
Title:
|
Executive Vice President,
Marketing and Retail Administration |
President, Chief Operating Officer | ||
Witness
|
Address: | |||
By:
|
/s/ Xxxxxxx X. Xxxxxx | 1509 Red Tail Drive | ||
Title:
|
Executive Vice President and Treasurer | Xxxxxx, Xxxxxxxxx 00000 | ||
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