EXHIBIT 10.3
EMPLOYMENT AGREEMENT OF XXXXX X. XXXXXXX
CHARTER BANK, S.B.
EMPLOYMENT AGREEMENT
This Agreement is made effective as of April 17, 1997 by and between
Charter Bank, S B. (the "Bank"), an Illinois-chartered savings bank, with its
principal administrative office at 000 Xxxx Xxxxxxxx, Xxxxxx, Xxxxxxxx, and
Xxxxx X. Xxxxxxx (the "Executive"). Any reference to "Holding Company" herein
shall mean Charter Financial, Inc. or any successor thereto.
WHEREAS, the Bank wishes to assure itself of the services of Executive
for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Bank on a
full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES
During the period of her employment hereunder, Executive agrees to
serve as Senior Vice President and Secretary of the Bank and of Charter
Financial, Inc. During said period, Executive may, in her discretion, agree to
serve, if elected, as an officer and director of any subsidiary or affiliate of
the Bank, with appropriate adjustments to the compensation specified in Section
3(a). Failure to reelect Executive as Senior Vice President and Secretary
without the consent of the Executive during the term of this Agreement shall
constitute a breach of this Agreement.
2. TERMS AND DUTIES
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months thereafter. Commencing on
the first anniversary date of this Agreement, and continuing at each anniversary
date thereafter, the Agreement shall renew for an additional year such that the
remaining term shall be three (3) years unless written notice is provided to
Executive at least ten (10) days and not more than twenty (20) days prior to any
such anniversary date, that her employment shall cease at the end of twenty-four
(24) months following such anniversary date. Prior to each notice period for
non-renewal, the Board of Directors of the Bank ("Board") will conduct a formal
performance evaluation and review of the Executive for purposes of determining
whether to extend the Agreement, and the results thereof shall be included in
the minutes of the Board's meeting.
(b) During the period of her employment hereunder, except for periods
of absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote substantially all her business time,
attention, skill, and efforts to the faithful performance of her duties
hereunder including activities and services related to the organization,
operation and management of the Bank; provided, however, that, with the approval
of the Board, as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors of, and
hold any other offices or positions in, companies or organizations, which, in
such Board's judgment, will not present any conflict of interest with the Bank,
or materially affect the performance of Executive's duties pursuant to this
Agreement.
3. COMPENSATION AND REIMBURSEMENT
(a) The compensation specified under this Agreement shall constitute
the salary and benefits paid for the duties described in Section 2(b). The Bank
shall pay Executive as compensation a salary of not less than $97,400.40 per
year ("Base Salary"). Such Base Salary shall be payable on the 15th and last day
of each month. During the period of this Agreement, Executive's Base Salary
shall be reviewed at least annually; the first such review will be made no later
than October 15, 1997. Such review shall be conducted by a Committee designated
by the Board, and the Board may increase Executive's Base Salary. In addition to
the Base Salary provided in this Section 3(a), the Bank shall provide Executive
at no cost to Executive with all such other benefits as are provided uniformly
to permanent full-time employees of the Bank.
(b) The Bank will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Bank will not, without
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites which would adversely affect Executive's rights or benefits
thereunder. Without limiting the generality of the forgoing provisions of this
Subsection (b), Executive will be entitled to participate in or receive benefits
under any employee benefit plans including but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
health-andaccident plan, medical coverage or any other employee benefit plan or
arrangement made available by the Bank in the future to its senior executives
and key management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and arrangements.
Executive will be entitled to incentive compensation and bonuses as provided in
any plan of the Bank in which Executive is eligible to participate. Nothing paid
to the Executive under any such plan or arrangement will be deemed to be in lieu
of other compensation to which the Executive is entitled under this Agreement.
(c) In addition to the Base Salary provided for by paragraph (a) of
this Section 3, the Bank shall pay or reimburse Executive for all reasonable
travel and other reasonable expenses incurred by Executive performing her
obligations under this Agreement and may provide such additional compensation in
such form, including annual bonuses, and such amounts as the Board may from time
to time determine.
(d) Compensation and reimbursement to be paid pursuant to paragraphs
(a), (b) and (c) of this Section 3 shall be paid by the Bank and the Holding
Company, respectively on a pro rata basis based upon the amount of service the
Executive devotes to the Bank and Holding Company, respectively.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
The provisions of this Section shall in all respects be subject to the
terms and conditions stated in Sections 7 and 15.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. As used in this Agreement, an "Event of
Termination" shall mean and included any one or more of the following: (i) the
termination by the Bank or the Holding Company of Executive's full-time
employment hereunder for any reason other than a Change in Control, as defined
in Section 5(a) hereof, or Termination for Cause as defined in Section 7 hereof;
or (ii) Executive's resignation from the Bank's employ, upon any (A) failure to
elect or reelect or to appoint or reappoint Senior Vice President and Secretary,
(B) material change in Executive's function, duties, or responsibilities, which
change would cause Executive's position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described in
Section 1, above (and any such material change shall be deemed a continuing
breach of this Agreement), (C) a relocation of Executive's principal place of
employment by more than 30 miles from its location at the effective date of this
Agreement, or a material reduction m the benefits and perquisites to the
Executive from those being provided as of the effective date of this Agreement,
(D) liquidation or dissolution of the Bank or Holding Company, or (E) breach of
this Agreement by the Bank. Upon the occurrence of any event described in
clauses (A), (B), (C), (D) or (E), above, Executive shall have the right to
elect to terminate her employment under this Agreement by resignation upon sixty
(60) days prior written notice given within a reasonable period of time not to
exceed four calendar months after the event giving rise to said right to elect.
Notwithstanding the preceding sentence, in the event of a continuing breach the
Executive, after giving due notice within the proscribed time frame of an
occurrence specified above, shall not waive any of her rights solely by virtue
of the fact that Executive and the Bank are engaged in good faith discussions to
resolve any occurrence of an event described in clauses (A), (B), (C), (D) and
(E) above.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 9, the Bank shall pay Executive, or, in the
event of her subsequent death, her beneficiary or beneficiaries, or her estate,
as the case may be, as severance pay or liquidated damages, or both, a sum equal
to the greater of the payments due for the remaining term of the Agreement or
three (3) times the average of the three preceding years' Base Salary,.including
bonuses and any other cash compensation paid to the Executive during such years,
and the amount of any benefits received pursuant to any employee benefit plans,
on behalf of the Executive, maintained by the Bank during such years; ~i~,
however, that if the Bank is not in compliance with its minimum capital
requirements or if such payments would cause the Bank's capital to be reduced
below its minimum capital requirements, such payments shall be deferred until
such time as the Bank is in capital compliance, and provided further, that m no
event shall total severance compensation from all sources exceed three times the
Executive's Base Salary for the immediately preceding year. At the election of
the Executive, which election is to be made within thirty (30) days of an Event
of Termination, such payments shall be made in a lump sum or paid monthly during
the remaining term of the agreement following the Executive's termination. In
the event that no election is made, payment to the Executive will be made on a
monthly basis during the remaining term of the agreement. Such payments shall
not be reduced in the event the Executive obtains other employment following
termination of employment. The Executive shall not be required to mitigate such
payments by seeking other employment.
(c) Notwithstanding the provisions of Sections 4(a) and (b), and in the
event that there has not been a change in control as defined in Section 5(a),
upon the Voluntary Termination by the Executive upon giving sixty days notice to
the Bank (which shall not be deemed to constitute an "Event of Termination" as
defined herein), the Bank, shall pay Executive, or in the event of her
subsequent death, her beneficiary or beneficiaries, or her estate, as the case
may be, a severance payment in an amount equal to the Executive's preceding
year's Base Salary, including bonuses and any other cash compensation paid to
the Executive during such year, and the amount of any benefits received pursuant
to any employee benefit plans, on behalf of the Executive, maintained by the
Bank during such years; provided, however, that if the Bank is not in compliance
with its minimum capital requirements or if such payments would cause the Bank's
capital to be reduced below its minimum capital requirements, such payments
shall be deferred until such time as the Bank is in capital compliance. At the
election of the Executive, which election is to be made within thirty (30) days
of an Event of Termination, any payments shall be made in a lump sum or paid
monthly during the remaining term of the agreement following the Executive's
termination. In the event that no election is made, any payment to the Executive
will be made on a monthly basis during the remaining term of the agreement. Such
payments shall not be reduced in the event the Executive obtains other
employment following termination of employment.
(d) Upon the occurrence of an Event of Termination, the Bank will cause
to be continued life, medical, dental and disability coverage substantially
identical to the coverage maintained by the Bank of Executive prior to her
termination, provided that such benefits shall not be provided in the event they
should constitute an unsafe or unsound banking practice relating to executive
compensation and employment contracts pursuant to applicable regulations as is
now or hereafter in effect. Such coverage shall cease upon the expiration of the
remaining term of this Agreement.
(e) In the event that the Executive is receiving monthly payments
pursuant to Section 4(b) or (c) hereof, on an annual basis, thereafter, between
the dates of January I and January 31 of each year, Executive shall elect
whether the balance of the amount payable under the Agreement at that time shall
be paid in a lump sum or on a pro rata basis. Such election shall be irrevocable
for the year for which such election is made.
5. CHANGE IN CONTROL
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control. A "Change in Control" shall mean a
reorganization, merger, merger conversion, consolidation or sale of all or
substantially all of the assets of the Bank or the Company or a similar
transaction in which the Bank or Company is not the resulting entity; (u)
individuals who constitute the board of directors of the Bank or the board of
directors of the Company as of the date hereof (the "Incumbent Board"), cease
for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three-fourths of the directors composing the
Incumbent Board or whose nomination for election by the Bank's or Company's
stockholders or members was approved by the same nominating Committee serving
under an Incumbent Board shall be for purposes of this section considered as
though he were a member of the Incumbent Board; or (iii) an acquisition of
"control" of the Bank or the Company as defined by the Bank Holding Company Act
of 1956, as amended, and applicable rules and regulations promulgated thereunder
as in effect at the time of the Change in Control (collectively, the "BHCA"), as
determined by the board of directors of the Bank or the Company; or (iv) an
acquisition of the Bank's stock requiring submission of notice under the Change
in Bank Control Act; provided, however, that a change in control shall not be
deemed to have occurred under clauses (i), (iii), or (iv) of this section if the
transaction(s) constituting a change in control is approved by a majority of the
board of directors of the Bank or the Company, as the case may be.
(b) If any of the events described in Section 5(a) hereof constituting
a Change in Control have occurred, Executive shall be entitled to the benefits
provided in paragraphs (c), (d), (e), (f), (g) and (h) of this Section 5 upon
her subsequent termination of employment at any time during the term of this
Agreement (regardless of whether such termination results from her resignation
or her dismissal), unless such termination is because of her death, termination
for Cause or termination for Disability. Upon the Change in Control, Executive
shall have the right to elect to terminate her employment with the Bank at any
time, for any reason, during the term of this Agreement.
(c) Upon the occurrence of a Change in Control followed by the
Executive's termination of employment, the Bank shall pay Executive, or in the
event of her subsequent death, her beneficiary or beneficiaries, or her estate,
as the case may be, a severance pay or liquidated damages, or both, a sum equal
to the greater of the payments due for the remaining term of the Agreement or
2.99 times the average of the five preceding years' Base Salary, including
bonuses and any other cash compensation paid to the Executive during such years,
and the amount of any contributions made to any employee benefit plans, on
behalf of the Executive, maintained by the Bank during such years. At the
election of the Executive, which election is to be made within thirty (30) days
of the Date of Termination following a Change in Control, such payment may be
made in a lump sum or paid in equal monthly installments during the thirty-six
(36) months following the Executive's termination. In the event that no election
is made, payment to the Executive will be made on a monthly basis during the
remaining term of the Agreement.
(d) Upon the occurrence of a Change in Control followed by the
Executive's termination of employment, the Bank will cause to be continued life,
medical, dental and disability coverage substantially identical to the coverage
maintained by the Bank for Executive prior to her severance.
Such coverage and payments shall cease upon the expiration of
thirty-six (36) months.
(e) Upon the occurrence of a Change in Control, Executive will be
entitled to any benefits granted to her pursuant to any stock option plan of the
Bank or Holding Company.
(f) Upon the occurrence of a Change in Control the Executive will be
entitled to any benefits awarded to her under any of the Bank's Recognition and
Retention Plans arising from a Change in Control.
(g) In the event that the Executive is receiving monthly payments
pursuant to Section 5(c) hereof, on an annual basis, thereafter, between the
dates of January I and January 31 of each year, Executive shall elect whether
the balance of the amount payable under the Agreement at that time shall be paid
in a lump sum or on a pro rata basis. Such election shall be irrevocable for the
year for which such election is made.
(h) Notwithstanding the preceding paragraphs of this Section 5, in the
event that:
(i) the aggregate payments or benefits to be made or afforded to Executive
under said paragraphs (the "Termination Benefits") would be deemed to
include an "excess parachute payment" under Section 280G of the Code or
any successor thereto, and
(ii) if such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is one dollar ($ 1.00) less
than an amount equal to the total amount of payments permissible under
Section 280G of the Code or any successor thereto.
then the Termination Benefits to be paid to Executive shall be so reduced so as
to be a Non-Triggering Amount.
(i) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during which
Executive is incapable of performing her duties hereunder by reason of temporary
disability.
(j) Any payments made to Executive pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
ss. 1818(k) and any applicable regulations promulgated thereunder.
(k) The Executive shall not be entitled to any payments pursuant to
this Section 5 if the Bank is not in compliance with its minimum capital
requirements or if such payments would cause the Bank's capital to be reduced
below its minimum capital requirements, such payments shall be deferred until
such times as the Bank is in capital compliance and provided further, that in no
event shall total severance compensation from all sources exceed three times the
Executive's Base Salary for the immediately preceding year.
6. TERMINATION UPON RETIREMENT
Termination by the Bank of the Executive based on "Retirement" shall
mean termination in accordance with the Bank's retirement policy or in
accordance with any retirement arrangement established with Executive's consent
with respect to her. Upon termination of Executive upon Retirement, Executive
shall be entitled to all benefits under any retirement plan of the Bank and
other plans to which Executive is a party.
7. TERMINATION FOR CAUSE
The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, incompetence, any breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material breach of any
material provision of this Agreement. In determining incompetence, the acts or
omissions shall be measured against standards generally prevailing in the
savings institutions industry. Notwithstanding the foregoing, Executive shall
not be deemed to have been Terminated for Cause unless and until there shall
have been delivered to her a copy of a resolution duly adopted by the
affirmative vote of not less than threefourths of the members of the Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to Executive and an opportunity for her, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying Termination for Cause and specifying
the particulars thereof in detail. The Executive shall not have the right to
receive compensation or other benefits for any period after Termination for
Cause. Any stock options granted to Executive under any stock option plan of the
Bank, the Holding Company or any subsidiary or affiliate thereof, shall become
null and void effective upon Executive's receipt of Notice of Termination for
Cause pursuant to Section 8 hereof, and shall not be exercisable by Executive at
any time subsequent to such Termination for Cause.
8. NOTICE
(a) Any purported termination by the Bank or by Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provided a basis for termination of Executive's employment under the provision
so indicated.
(b) "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of her duties
on a full-time basis during such thirty (3 0) day period), and (B) if her
employment is terminated for any other reason, the date specified in the Notice
of Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).
(c) If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, except upon the occurrence of
a Change in Control and voluntary termination by the Executive in which case the
date of termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is fainally determined,
either by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal having expired and no appeal having been
perfected) and provided further that the Date of Termination shall be extended
by a notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable
diligence. Notwithstanding the pendency of any such dispute, the Bank will
continue to pay Executive her full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, Base Salary) and
continue Executive as a participant in all compensation, benefit and insurance
plans in which he was participating when the notice of dispute was given, until
the dispute is finally resolved in accordance with this Agreement. Amounts paid
under this Section are in addition to all other amounts due under this Agreement
and shall not be offset against or reduce any other amounts due under this
Agreement.
9. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination thereof
(b) Executive shall, upon reasonable notice, furnish such information
and assistance to the Bank as may reasonably be required by the Bank in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.
10. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to Section 4(c) hereof, Executive agrees not to compete with the Bank and/or the
Holding Company for a period of one (1) year following such termination in any
city, town or county in which the Bank and/or the Holding Company has an office
or has filed an application for regulatory approval to establish an office,
determined as of the effective date of such termination, except as agreed to
pursuant to a resolution duly adopted by the Board: Executive agrees that during
such period and within said cities, towns and counties, Executive shall not work
for or advise, consult or otherwise serve with, directly or indirectly, any
entity whose business materially competes with the depository, lending or other
business activities of the Bank and/or the Holding Company. The parties hereto,
recognizing that irreparable injury will result to the Bank and/or the Holding
Company, its business and property in the event of Executive's breach of this
Subsection 10(a) agree that in the event of any such breach by Executive, the
Bank and/or the Holding Company will be entitled, in addition to any other
remedies and damages available, to an injunction to restrain the violation
hereof by Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive represents and
admits that in the event of the termination of her employment pursuant to
Sections 4(c) hereof, Executive's experience and capabilities are such that
Executive can obtain employment in a business engaged in other lines and/or of a
different nature than the Bank and/or the Holding Company, and that the
enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood. Nothing herein will be construed as prohibiting the Bank
and/or the Holding Company from pursuing any other remedies available to the
Bank and/or the Holding Company for such breach or threatened breach, including
the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Bank and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank. Executive will not, during or after the term
of her employment, disclose .any knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof to any person,
firm, corporation, or other entity for any reason or purpose whatsoever.
Notwithstanding the foregoing, Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Bank. In the
event of a breach or threatened breach by the Executive of the Provisions of
this Section 10, the Bank will be entitled to an injunction restraining
Executive from disclosing, in whole or in part, the knowledge of the past,
present, planned or considered business activities of the Bank or affiliates
thereof, or from rendering any services to any person, firm, corporation, other
entity to whom such knowledge, in whole or in part, has been disclosed or is
threatened to be disclosed. Nothing herein will be construed as prohibiting the
Bank from pursuing any other remedies available to the Bank for such breach or
threatened breach, including the recovery of damages from Executive.
11. SOURCE OF PAYMENTS
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Holding Company, however,
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 Holding Company.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLAN
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to the Executive
of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to her without reference to this Agreement.
13. NO ATTACHMENT
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
14. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there by any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
15. REQUIRED PROVISIONS
(a) The Bank may terminate the Executive's employment at any time, but
any termination by the Bank other than Termination for Cause, shall not
prejudice Executive's right to compensation or other benefits under this
Agreement. Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Cause as defined in Section 7
hereinabove.
(b) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a notice
served under Section 8(e)(3)(12U.S.C. xx.xx. 1818 (e)(3)) or 8(g)(12 U.S.C. ss.
1818(g)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, the Bank's
obligations under this contract shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank shall (i) pay the Executive all or part of the compensation
withheld while their contract obligations were suspended and (ii) reinstate (in
whole or in part) any of the obligations which were suspended.
(c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(12U.S.C. xx.xx. 1818(e)) or 8(g) (12 U. S.C. ss. 1818 (g)) of the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all obligations of the Bank under this
contract shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Bank is in default as defined in Section 3(x) (12 U.S.C. ss.
1813 (x)(l)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Bank under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Bank under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution, by the Federal Deposit
Insurance Corporation ("FDIC"), at the time FDIC enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) (12 U.S.C. ss. 1823 (c)) of the Federal Deposit Insurance Act, as
amended by the Financial Institutions Reform, Recovery and Enforcement Act of
1982; or when the Bank is determined by the FDIC 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.
16. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
17. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Illinois,
but only to the extent not superseded by federal law.
19. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration 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 her
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.
20. PAYMENT OF LEGAL FEES
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank.
21. INDEMNIFICATION
The Bank shall provide Executive (including her heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
Executive (and her heirs, executors and administrators) to the fullest extent
permitted under federal law or state law against all expenses and liabilities
reasonably incurred by her in connection with or arising out of any action, suit
or proceeding in which he may be involved by reason of her having been a
director or officer of the Bank (whether or not he continues to be a director or
officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgements, court costs and
attorneys' fees and the cost of reasonable settlements (such settlements must be
approved by the Board of Directors of the Bank). If such action, suit or
proceeding is brought against Executive in her capacity as an officer or
director of the Bank, however, such indemnification shall not extend to matters
as to which Executive is finally adjudged to be liable for willful misconduct in
the performance of her duties. No Indemnification shall be paid that would
violate 12 U.S.C. 1828 (k) or applicable regulations promulgated thereunder.
22. SUCCESSOR TO THE BANK
The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Holding Company,
expressly and unconditionally to assume and agree to perform the Bank's
obligations under this Agreement, in the same manner and to the same extent that
the Bank would be required to perform if no such succession or assignment had
taken place.
SIGNATURES
IN WITNESS WHEREOF, the Bank and the Holding Company have caused this
Agreement to be executed and their seals to be affixed hereunto by theur duly
authorized officers, and the Executive has signed this Agreement, on the 17th
day of April, 1997.
ATTEST: CHARTERBANK, S.B.
[SEAL]
ATTEST: CHARTER FINANCIAL, INC.
WITNESS:
EXECUTIVE
