Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into this 23rd day of October, 1998, among First
Federal Savings and Loan Association of Bloomington (the 'Association'), Eagle
BancGroup, Inc. (the 'Holding Company') and Xxxxxx X. Xxxxxxxxx (the
'Employee').
WHEREAS, the Employee has heretofore been employed by the Association as
President and Chief Executive Officer and is experienced in all phases of the
business of the Association; and
WHEREAS, the parties desire by this writing to set forth the continued
employment relationship of the Employee;
NOW THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed as the President and Chief
Executive Officer of the Association and the Holding Company. The
Employee shall render administrative and management services to
the Association and the Holding Company such as are customarily
performed by persons situated in a similar executive capacity. He
shall also promote, by entertainment or otherwise, as and to the
extent permitted by law, the business of the Association and the
Holding Company. The Employee's other duties shall be such as the
Board of Directors of the Association and the Holding Company may
from time to time reasonably direct, including normal duties as an
officer of the Association and the Holding Company.
2. Base Compensation. The Association and the Holding Company agree
to pay the Employee during the term of this Agreement a salary at
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the rate of $110,000 per annum, payable in cash not less frequently than twice
monthly. Such rate of salary, if any as the case may be, shall be reviewed by
the Board of Directors of the Association and the Holding Company no less
often than annually. Any increase in the Employee's rate of salary shall have
the effect of amending this Section 2 to provide that the Employee's Base
Compensation shall equal such increased rate of salary.
3. Discretionary Bonuses. The Employee shall be entitled to
participate in an equitable manner with all other key management
personnel of the Association and the Holding Company in
discretionary bonuses authorized and declared by the Board of
Directors of the Association and the Holding Company to its key
management employees. No other compensation provided for in this
Agreement shall be deemed a substitute for the Employees right to
participate in such discretionary bonuses when and as declared by
the Board of Directors of the Association and the Holding Company.
Any such bonus shall take into account the Association's and the
Holding Company's current financial condition, operations and the
Board of Directors' evaluation of the performance of the Employee.
4. (a) Participation in Retirement and Medical Plans. The Employee
shall be entitled to participate in any plan of the Association
and the Holding Company relating to pension, profit-sharing, or
other retirement benefits and medical coverage or reimbursement
plans that the Association and the Holding Company may adopt for
the benefit of its employees.
(b) Employee Benefits; Expenses. The Employee shall be eligible
to participate in any fringe benefits that may be or become
applicable to the Association's and the Holding Company's
executive employees, including participation in a stock
option or incentive plan adopted by the Board of Directors,
and any other benefits that are commensurate with the
responsibilities and functions to be performed by the
Employee under this Agreement. The Association and the
Holding Company shall reimburse Employee for all reasonable,
ordinary and necessary out-of-pocket expenses that Employee
shall incur in connection with his services for the
Association and the Holding Company.
5. Term. The term of employment under this Agreement shall be for a
36 month period commencing October 23, 1998 and ending October 31,
2001. The said 36 month period of employment may be extended for
an additional 12 full calendar months by action of the Board of
Directors of the Association and the Holding Company sixty (60)
days prior to October 31 2001, and 60 days prior to each
succeeding October 31 thereafter, respectively.
6. Loyalty; Noncompetition.
(a) The Employee shall devote his full time and best efforts to
the performance of his employment under this Agreement.
During the term of this Agreement, the Employee shall not,
at any time or place, either directly or indirectly, engage
in any business or activity in competition with the business
affairs or interests of the Association or the Holding
Company or be a director, officer or employee of or
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consultant to any bank, savings association, credit union or
similar financial institution in XxXxxx County and all other
counties in which the Association has a full-service facility.
(b) Upon termination of this Agreement for any reason other than
the reasons set forth in paragraph 9 of this Agreement, for
a period of one year from the termination of this Agreement,
the Employee shall not at any time or place, either directly
or indirectly, engage in any business or activity in
competition with the business affairs or interests of the
Association or the Holding Company or be a director, officer
or employee of or consultant to any bank, savings
association, credit union or similar financial institution
in XxXxxx County and all other counties in which the
Association has a full-service facility.
(c) Nothing in the foregoing subparagraphs in this paragraph 6
shall apply to subsidiaries and affiliates or shall be
determined to prevent or limit the right of Employee to
invest in the capital stock or other securities of any
business dissimilar from that of the Association and the
Holding Company or solely as a passive investor in any
business.
(d) Directly or indirectly engaging in any business or activity
in competition with the business affairs or interests of the
Association or the Holding Company shall include engaging in
business as owner partner, agent or employee of any person,
firm or corporation or other business entity or in being
interested directly or indirectly in any such business
conducted by any person, firm or corporation.
(e) In the event of violation by Employee of this Agreement for
loyalty and noncompetition, the Employee will be subject to
damages and because of the relationship of employer and
employee, it is hereby agreed injunctive relief is necessary
for the Association and the Holding Company to enforce these
provisions of the Agreement to protect their business and
good will.
7. Standards. The Employee shall perform his duties under this
Agreement in accordance with such reasonable standards expected of
employees with comparable positions in comparable organizations
and as may be established from time to time by the Boards of
Directors of the Association and the Holding Company. The
Employee shall be subject to an annual performance review on or
about each anniversary of this Agreement, to be performed by the
Board of Directors of the Association or the Holding Company, or a
committee appointed by such Board of Directors, to determine that
his performance is in compliance with these standards.
8. Vacation and Sick Leave. At such reasonable times as the Board of
Directors of the Association and the Holding Company shall in
their discretion permit, the Employee shall be entitled, without
loss of pay, to absent himself voluntarily from the performance of
his employment under this Agreement, all such voluntary absences
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to count as vacation time; provided that:
(a) The Employee shall be entitled to any annual vacation in
accordance with the policies as periodically established by
the Board of Directors of the Association and the Holding
Company for senior management officials of the Association
and the Holding Company.
(b) The timing of vacations shall be scheduled in a reasonable
manner by the Employee. The Employee shall not be entitled
to receive any additional compensation from the Association
or the Holding Company on account of his failure to take a
vacation; nor shall he be entitled to accumulate unused
vacation from one fiscal year to the next except to the
extent authorized by the Board of Directors of the
Association and the Holding Company for senior management
officials of the Association and the Holding Company,
respectively.
(c) In addition to the aforesaid paid vacations, the Employee
shall be entitled without the loss of pay, to absent himself
voluntarily from the performance of his employment with the
Association and the Holding Company for such additional
period of time and for such valid and legitimate reasons as
the Board of Directors of the Association and the Holding
Company in their discretion may determine. Further, the
Board of Directors of the Association and the Holding
Company shall be entitled to grant to the Employee a leave
or leaves of absence with or without pay at such time or
times and upon such terms and conditions as such Boards in
their discretion may determine.
(d) In addition, the Employee shall be entitled to an annual
sick leave as established by the Board of Directors of the
Association and the Holding Company for senior management
officials of the Association and the Holding Company,
respectively. In the event any sick leave time shall not
have been used during any year, such leave shall accrue to
subsequent years only to the extent authorized by the Board
of Directors of the Association and the Holding Company.
Upon termination of his employment, the Employee shall not
be entitled to receive any additional compensation from the
Association or the Holding Company for unused sick leave.
9. Termination and Termination Pay.
This Agreement shall be terminated upon the following occurrences:
(a) The death of the Employee during the term of this Agreement,
in which event the Employee's estate shall be entitled to
receive the compensation due the Employee through the last
day of the calendar month in which his death shall have
occurred.
(b) This Agreement may be terminated at any time by a decision
of the Board of Directors of the Association or the Holding
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Company for conduct not constituting termination for 'Just Cause,' or by the
Employee upon sixty (60) days written notice to the Association or the Holding
Company, as the case may be. In the event this Agreement is terminated by the
Board of Directors of the Association or the Holding Company without Just
Cause, the Association and the Holding Company shall be obliged to continue to
pay the Employee a severance payment equal to the remaining amount due under
this Agreement. In the event this Agreement is terminated by the Employee,
the compensation and benefits will be terminated upon the effective date of
the employment termination or as may otherwise be determined by the Board of
Directors of the Association and the Holding Company.
(c) The Association and the Holding Company reserve the right to
terminate this Agreement at any time for Just Cause.
Termination for 'Just Cause' shall mean termination for
personal dishonesty, incompetence, willful misconduct,
breach of a fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than a law,
rule or regulation relating to a traffic violation or
similar offense), final cease-and-desist order, termination
under the provisions of subparagraphs (d) and (e) below, or
material breach of any provision of this Agreement. If this
Agreement is terminated for Just Cause, the Association and
the Holding Company shall only be obligated to continue to
pay the Employee his salary up to the date of termination.
(d) (i) If the Employee is suspended and/or temporarily
prohibited from participating in the conduct of the
Association's affairs by notice served under Section
8(e)(3) or (g)(1) of the Federal Deposit Insurance Act
('FDIA') (12 U.S.C. 1818(e)(3) and (g)(1), the
Association's obligations under the Agreement shall be
suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice
are dismissed, the Association may in its discretion
(a) pay the Employee all or part of the compensation
withheld while its contract obligations were suspended
and (b) reinstate (in whole or in part) any of its
obligations that were suspended.
(ii) If the Employee is removed and/or permanently
prohibited from participating in the conduct of the
Association's affairs by an order issued under Section
8(e)(4) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(4) or
(g)(1)), all obligations of the Association under the
Agreement shall terminate as of the effective date of
the order, but vested rights of the contracting
parties shall not be affected.
(e) If the Association is in default (as defined in Section
3(x)(1) of the FDIA), all obligations under this Agreement
shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the parties
hereto.
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(f) All obligations under this Agreement may be terminated,
except to the extent determined that continuation of the
Agreement is necessary for the continued operations of the
Association (i) by the Director of the Office of Thrift
Supervision (the 'Director') or his or her designee at the
time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to
provide assistance to or on behalf of the Association under
the authority contained in Section 13(c) of the FDIA or (ii)
by the Director, or his or her designee at the time the
Director or such designee approves a supervisory merger to
resolve problems related to operation of the Association or
when the Association is determined by the Director 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.
(g) If, at any time after the date hereof a 'Change of Control'
(as hereinafter defined) occurs and within one year
thereafter (i) the Holding Company or the Association, or
their successors or assigns, terminate the Employee's
employment for any reason other than for Just Cause (as
defined in Paragraph 9 (c)), or (ii) the Employee terminates
his employment for good reason (as defined in Paragraph 9
(h)), then the Association and the Holding Company shall pay
to the Employee the following:
(i) The Association shall promptly pay to the Employee an
amount equal to the product of 2.99 times the
Employee's 'Base Amount' as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as
amended, provided, however, that in no event shall
said sum be paid to the extent that payments under
this paragraph would cause the Association to fail to
meet its minimum capital requirements as established
by the Office of Thrift Supervision. Any payments
made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. Section 1828(k) and any
regulation promulgated thereunder.
(ii) During the period of 24 calendar months beginning with
the event of termination, the Employee, his
dependents, beneficiaries and estate shall continue to
be covered under all employee benefit plans of the
Association and the Holding Company, including, but
not limited to, any pension or retirement plan, stock
investment plan, life insurance and health insurance
as if the Employee was still employed during such
period under this Agreement.
(iii) If and to the extent that benefits or service credit
for benefits provided by paragraph 9(g)(ii) shall not
be payable or provided under any such plans covered by
paragraph 9(g)(ii) by reason of his no longer being an
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employee of the Association and the Holding Company as a result of termination
of employment, the Association and the Holding Company shall themselves pay or
provide for payment of such benefits and service credit for benefits to the
Employee, his dependents, beneficiaries or estate. Any such payment relating
to retirement shall commence on a date selected by the Employee which must be
a date on which payments under the Association's or the Holding Company's
qualified pension plan or successor plan may commence.
(iv) (a) Anything in this Agreement to the contrary
notwithstanding, it is the intention of the
Association, the Holding Company and the Employee that
no portion of any payment under this Agreement, or
payments to or for the benefit of the Employee under
any other agreement or plan, be deemed to be an
'Excess Parachute Payment' as defined in Section 280G
of the Code, or its successors. It is agreed that the
present value of and payments to or for the benefit of
the Employee in the nature of compensation, receipt of
which is contingent on occurrence of a Change of
Control, and to which Section 280G of the Code applies
(in the aggregate 'Total Payments') shall not exceed
an amount equal to one dollar less than the maximum
amount that the Association and the Holding Company
may pay without loss of deduction under Section
280G(a) of the Code. Present value for purposes of
this Agreement shall be calculated in accordance with
Section 280G(d)(4) of the Code. Within sixty (60)
days following the earlier of (i) the giving of notice
of termination of employment or (ii) the giving of
notice by the Association or the Holding Company to
the Employee of its belief that there is a payment or
benefit due the Employee which will result in an
excess parachute payment as defined in Section 280G of
the Code, the Employee, the Association and the
Holding Company, at the Association's or Holding
Company's expense, shall obtain the opinion of the
Association's and the Holding Company's public
accounting firm (the 'Accounting Firm'), which opinion
need not be unqualified, which sets forth: (i) the
amount of the Base Period Income of the Employee (as
defined in Code Section 280G, (ii) the present value
of Total Payments and (iii) the amount and present
value of any excess parachute payments. In the event
that such opinion determines that there would be an
excess parachute payment, the payment hereunder shall
be modified, reduced or eliminated as specified by the
Employee in writing delivered to the Association or
Holding Company within thirty (30) days of his receipt
of such opinion or, if the Employee fails to so notify
the Association or Holding Company, then as the
Association or Holding Company shall reasonably determine,
so that under the bases of calculation set forth in such
opinion there will be no excess parachute payment. In the
event that the provisions of Sections 280G and 4999 of the
Code are repealed without succession, this Section shall be
of no further force or effect.
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(b) In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control,
the Employee shall appoint another nationally recognized public accounting
firm to make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm under this Section 9(g)(iv)).
All fees and expenses of the Accounting Firm shall be borne solely by the
Association or Holding Company. Any determination by the Accounting Firm
shall be binding upon the Association, the Holding Company and the Employee.
(v) The Association and the Holding Company shall pay all
legal fees and expenses which the Employee may incur
as a result of the Association's or the Holding
Company's contesting the validity or enforceability of
this Agreement, provided that the Employee is the
prevailing party in such contest or that any dispute
may otherwise be settled in favor of the Employee.
The Employee shall be entitled to receive interest
thereon for the period of any delay in payment from
the date such payment was due at the rate determined
by adding two hundred basis points to the six month
Treasury Xxxx rate.
(vi) The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement
by seeking other employment or otherwise nor shall any
amounts received from other employment or otherwise by
the Employee offset in any manner the obligations of
the Association or the Holding Company hereunder.
(h) For purposes of this Agreement, 'good reason' shall exist
if, without the Employee's express written consent, (i) the
Employee is assigned new duties involving a material amount
of the Employee's time that are not of an executive or
supervisory nature or do not involve the level of
responsibility generally comparable to responsibilities of
the Employee's duties prior to the Change of Control; (ii)
the Employee's duties and responsibilities are substantially
reduced from those of the Employee's present position,
excluding reductions that are a normal consequence of the
Holding Company ceasing to be widely or publicly owned;
(iii) there occurs any material reduction in the Employee's
aggregate compensation, incentive and benefit package in
effect at the time of the Change of Control, excluding (in
the case of an incentive or benefit package whose benefits
are proportionate to the performance of the Employee, the
Association or the Holding Company) reductions in benefits
resulting from diminished performance of the Employee, the
Association or the Holding Company; or (iv) the Employee is
an officer of the Association or the Holding Company at the
time of the Change of Control and thereafter the Holding
Company shall require the Employee to perform services outside of
a forty-mile radius of the Association's offices at which the
Employee is currently based except for travel on the Association's
or the Holding Company's business that the Association or the
Holding Company reasonably requires.
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10. Change of Control. Paragraph 9(g) shall become operative upon the
occurrence of a 'Change of Control' of the Holding Company (or the
Association). A 'Change of Control' shall be deemed to have
occurred if at any time during the period of employment of the
Employee set forth in paragraph 5 of this Agreement:
(i) Any person becomes the beneficial owner, directly or
indirectly, of 25% or more of the outstanding shares of any
class of voting stock issued by the Holding Company; or any
person (other than the Holding Company) becomes the
beneficial owner, directly or indirectly, of 25% or more of
the outstanding shares of any class of voting stock issued
by the Association;
(ii) Any person becomes the beneficial owner, directly or
indirectly, of 10% or more, but less than 25%, of the
outstanding shares of any class of voting stock issued by
the Holding Company, if such beneficial ownership
constitutes or will constitute control of the Holding
Company for regulatory purposes; or any person (other than
the Holding Company) becomes the beneficial owner, directly
or indirectly, of 10% or more, but less than 25%, of the
outstanding shares of any class of voting stock issued by
the Association if such beneficial ownership constitutes or
will constitute control of the Association for regulatory
purposes;
(iii) Any person (other than the persons named as proxies
solicited on behalf of the Board of Directors of the Holding
Company) holds revocable or irrevocable proxies as to the
election or removal of a majority or more of the directors
of the Holding Company, or for 25% or more of the total
number of voting shares of the Holding Company;
(iv) The OTS or other appropriate regulatory authority has given
the required approval of non-objection to the acquisition of
control of the Holding Company by any person; or the OTS or
other appropriate regulatory authority has given the
required approval of non-objection to the acquisition of
control of the Association by any person (other than the
Holding Company);
(v) During any period of 24 consecutive months, individuals who
at the beginning of such period constitute the
Association's and the Holding Company's Board of Directors
cease for any reason to constitute at least a majority of
the Board of the Association or the Holding Company, as the
case may be, unless the election of each director who was
not a director at the beginning of such period has been
approved in advance by directors of the Association or the
Holding Company, as the case may be, representing at least
two-thirds of the directors then in office who were
directors at the beginning of the period; or
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(vi) Any person acquires substantially all of the assets and
assumes substantially all of the liabilities of the Company
or First Federal.
A person shall be deemed a beneficial owner as that term is used in
Section 13(d)(3) under the Securities Exchange Act of 1934, as amended
(as in effect on the date hereof). No 'Change of Control' shall be
deemed to have taken place solely by reason of the Holding Company
owning stock in its wholly-owned subsidiaries.
11. Expenses to Enforce Agreement. In the event any dispute shall
arise between the Employee and the Association or the Holding
Company as to the terms or interpretation of this Agreement,
whether instituted by formal legal proceedings or arbitration
proceedings, including any action taken by the Association or the
Holding Company, the prevailing party shall be reimbursed for all
costs and expenses, including reasonable attorney's fees, arising
from such dispute, proceedings or actions. Such reimbursement
shall be paid within 10 days of the furnishing to the non-
prevailing party of written evidence, which may be in the form of
a canceled check or receipt, among other things, of any costs or
expenses incurred by the prevailing party. Any such request for
reimbursement shall be made no more frequently than at 60-day
intervals.
12. Successor and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Association or the Holding
Company which shall acquire, directly or indirectly, by merger,
consolidation, purchase or otherwise, all or substantially all of
the assets of the Association or the Holding Company.
(b) Since the Association is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties hereunder without
first obtaining the written consent of the Association and the
Holding Company.
13. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by the parties hereto, except
as herein otherwise provided.
14. Applicable Law. This Agreement shall be governed in all respects
whether as to validity, construction, capacity, performance or
otherwise, by the laws of Illinois, except to the extent that
Federal law shall be deemed to apply. This Agreement is intended
to comply with the requirements of 12 C.F.R. Section 563.39 and to the
extent it conflicts with the provisions of that section, Section 563.39
shall control.
15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other
provisions hereof.
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IN WITNESS HEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF BLOOMINTON
By: /s/ Xxxxxx Xxxxxxx
EAGLE BANCGROUP, INC.
By: /s/ Xxxxxx Xxxxxxx
ATTEST: /s/ Xxxxxxx Xxxxxxxx
WITNESS: /s/ Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
Employee
