EXHBIT 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this ____ day of ______ 1998, between Homestead
Bancorp, Inc., a Louisiana corporation (the "Corporation"), Ponchatoula
Homestead Savings, F.A., a federally-chartered savings and loan association and
a wholly owned subsidiary of the Corporation (the "Association"), and Xxxxxxx X.
Xxxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and the
Association (together the "Employers");
WHEREAS, the Employers desire to be ensured of the Executive's continued
active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that her employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereby agree as follows:
1. Definitions. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) Average Annual Compensation. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employers or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination (or such shorter period as the Executive was employed), including
Base Salary and bonuses under any employee benefit plans of the Employers but
excluding any compensation resulting from the exercise of stock options or the
vesting of restricted stock awards.
(b) Base Salary. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(c) Cause. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, 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 provision of this Agreement. For purposes of
this paragraph, no act or failure to act on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's action or omission
was in the best interest of the Employers.
(d) Change in Control of the Corporation. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any successor thereto, whether or not the Corporation is registered
under Exchange Act; provided that, without limitation, such a change in control
shall be deemed to have occurred if (i) 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 defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities; or (ii)
during any period of three consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation cease for
any reason to constitute at least a majority thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(e) Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) Date of Termination. "Date of Termination" shall mean the date
specified in the Notice of Termination.
(g) Disability. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) Good Reason. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control of the Corporation based on:
(i) Without the Executive's express written consent, the failure
to elect or to re-elect or to appoint or to re-appoint the
Executive to the offices of Secretary and Treasurer of the
Employers or a material adverse change made by the Employers
in the Executive's functions, duties or responsibilities as
Secretary and Treasurer of the Employers;
(ii) Without the Executive's express written consent, a material
reduction by the Employers in the Executive's Base Salary as
the same may be increased from time to time or, except to
the extent permitted by Section
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3(b) hereof, a material reduction in the package of fringe
benefits provided to the Executive, taken as a whole;
(iii) Without the Executive's express written consent, the
Employers require the Executive to work in an office which
is more than 30 miles from the location of the Employers'
current principal executive office, except for required
travel on business of the Employers to an extent
substantially consistent with the Executive's present
business travel obligations;
(iv) Any purported termination of the Executive's employment for
Cause, Disability or Retirement which is not effected
pursuant to a Notice of Termination satisfying the
requirements of paragraph (j) below; or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as
contemplated in Section 9 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) Notice of Termination. Any purported termination of the
Executive's employment by the Employers for any reason, including without
limitation for Cause, Disability or Retirement, or by the Executive for any
reason, including without limitation for Good Reason, shall be communicated by
written "Notice of Termination" to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be not less than
thirty (30) nor more than ninety (90) days after such Notice of Termination is
given, except in the case of the Employers' termination of the Executive's
employment for Cause; and (iv) is given in the manner specified in Section 10
hereof.
(k) Retirement. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to the Employers' salaried employees.
2. Term of Employment.
(a) The Employers hereby employ the Executive as Secretary and
Treasurer and the Executive hereby accepts said employment and agrees to render
such services to the Employers on the terms and conditions set forth in this
Agreement. Unless extended as provided in this Section 2, this Agreement shall
terminate three (3) years after the date first above written. Prior to the
first annual anniversary of the date first above written and each annual
anniversary thereafter, the Boards of Directors of the Employers shall consider,
review (taking into account all relevant factors, including the Executive's
performance) and, if appropriate, explicitly approve
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a one-year extension of the remaining term of this Agreement. The term of this
Agreement shall continue to extend each year if the Boards of Directors so
approve such extension unless the Executive gives written notice to the
Employers of the Executive's election not to extend the term, with such notice
to be given not less than thirty (30) days prior to any such anniversary date.
If the Boards of Directors elect not to extend the term, they shall give written
notice of such decision to the Executive not less than thirty (30) days prior to
any such anniversary date. If any party gives timely notice that the term will
not be extended as of any annual anniversary date, then this Agreement shall
terminate at the conclusion of its remaining term. References herein to the
term of this Agreement shall refer both to the initial term and successive
terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as is consistent with her title of
Secretary and Treasurer.
3. Compensation and Benefits.
(a) The Employers shall compensate and pay the Executive for her
services during the term of this Agreement at a minimum base salary of $______
per year ("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Boards of Directors of the Employers. In
addition to her Base Salary, the Executive shall be entitled to receive during
the term of this Agreement such bonus payments as may be determined by the
Boards of Directors of the Employers.
(b) During the term of the Agreement, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with her then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change in the rights of or
benefits to the Executive as compared with any other executive officer of the
Employers. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the salary payable to the Executive pursuant to Section 3(a) hereof.
(c) During the term of this Agreement, the Executive shall be entitled
to paid annual vacation in accordance with the policies as established from time
to time by the Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Boards of Directors of the Employers.
4. Expenses. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of, or in connection
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with the business of the Employers, including, but not by way of limitation,
automobile and traveling expenses, and all reasonable entertainment expenses
(whether incurred at the Executive's residence, while traveling or otherwise),
subject to such reasonable documentation and other limitations as may be
established by the Boards of Directors of the Employers. If such expenses are
paid in the first instance by the Executive, the Employers shall reimburse the
Executive therefor.
5. Termination.
(a) The Employers shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate her employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by
the Employers for Cause, Disability or Retirement or in the event of the
Executive's death, or (ii) the Executive terminates her employment hereunder
other than for Good Reason, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the applicable
Date of Termination.
(c) In the event that (i) the Executive's employment is terminated by
the Employers for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive (a) due to a
material breach of this Agreement by the Employers, which breach has not been
cured within fifteen (15) days after a written notice of non-compliance has been
given by the Executive to the Employers, or (b) for Good Reason, then the
Employers shall, subject to the provisions of Section 6 hereof, if applicable,
(A) Pay to the Executive, in thirty-six (36) equal monthly installments
beginning with the first business day of the month following the Date of
Termination, a cash severance amount equal to three (3) times the Executive's
Average Annual Compensation over the most recent five taxable years, and
(B) Maintain and provide for a period ending at the earlier of (i) the
expiration of the remaining term of employment pursuant hereto prior to the
Notice of Termination or (ii) the date of the Executive's full-time employment
by another employer (provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the Executive's continued
participation in all group insurance, life insurance, health and accident,
disability and other employee benefit plans, programs and arrangements in which
the Executive was entitled to participate immediately prior to the Date of
Termination (other than stock option plans, employee stock ownership plans and
restricted stock plans of the Employers), provided that in the event that the
Executive's participation in any plan, program or arrangement as provided in
this subparagraph (B) is barred or during such period any such plan, program or
arrangement is discontinued or the benefits thereunder are materially reduced,
the Employers shall arrange to provide the Executive with
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benefits substantially similar to those which the Executive was entitled to
receive under such plans, programs and arrangements immediately prior to the
Date of Termination.
6. Limitation of Benefits under Certain Circumstances. If the
payments and benefits pursuant to Section 5 hereof, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Employers, would constitute a "parachute payment" under Section 280G of
the Code, the payments and benefits pursuant to Section 5 hereof shall be
reduced, in the manner determined by the Executive, by the amount, if any,
which is the minimum necessary to result in no portion of the payments and
benefits under Section 5 being non-deductible to either of the Employers
pursuant to Section 280G of the Code and subject to the excise tax imposed under
Section 4999 of the Code. The determination of any reduction in the payments
and benefits to be made pursuant to Section 5 shall be based upon the opinion of
independent tax counsel selected by the Employers and paid by the Employers.
Such counsel shall be reasonably acceptable to the Employers and the Executive;
shall promptly prepare the foregoing opinion, but in no event later than thirty
(30) days from the Date of Termination; and may use such actuaries as such
counsel deems necessary or advisable for the purpose. The Employers shall pay
to the Executive the maximum amount of payments and benefits pursuant to Section
5, as selected by the Executive, which such opinion indicates that there is a
high probability do not result in any of such payments and benefits being
non-deductible to the Employers and subject to the imposition of the excise tax
imposed under Section 4999 of the Code. Nothing contained herein shall result
in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment under any circumstances other than as
specified in this Section 6, or a reduction in the payments and benefits
specified in Section 5 below zero.
7. Mitigation; Exclusivity of Benefits.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. Withholding. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. Assignability. The Employers may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may
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transfer all or substantially all of its assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employers hereunder as fully as if it had
been originally made a party hereto, but may not otherwise assign this Agreement
or its rights and obligations hereunder. The Executive may not assign or
transfer this Agreement or any rights or obligations hereunder.
10. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Board of Directors
Homestead Bancorp, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
To the Executive: Xxxxxxx X. Xxxxxxx
Homestead Bancorp, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
11. Amendment; 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 the Executive and such officer or officers as
may be specifically designated by the Boards of Directors of the Employers to
sign on its behalf. No waiver by any party hereto at any time of any breach by
any 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.
12. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of
Louisiana.
13. Nature of Obligations. Nothing contained herein shall create or
require the Employers to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
14. Interpretation and Headings. This agreement shall be interpreted
in order to achieve the purposes for which it was entered into. The section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
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15. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. 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.
17. Regulatory Actions. The following provisions shall be applicable
to the parties to the extent that they are required to be included in employment
agreements between a savings association and its employees pursuant to Section
563.39(b) of the Regulations Applicable to all Savings Associations, 12 C.F.R.
Section 563.39(b), or any successor thereto, and shall be controlling in the
event of a conflict with any other provision of this Agreement, including
without limitation Section 5 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers' affairs pursuant
to notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. Sections 1818(e)(3) and 1818(g)(1)), the
Employers' obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Employers may, in their discretion: (i) pay the Executive
all or part of the compensation withheld while its obligations under this
Agreement were suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
(b) If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Employers' affairs by an
order issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
Sections 1818(e)(4) and (g)(1)), all obligations of the Employers under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the Executive and the Employers as of the date of termination shall
not be affected.
(c) If the Association is in default, as defined in Section 3(x)(1) of
the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement
shall terminate as of the date of default, but vested rights of the Executive
and the Employers as of the date of termination shall not be affected.
(d) All obligations under this Agreement shall be terminated pursuant
to 12 C.F.R. Section 563.39(b)(5) (except to the extent that it is determined
that continuation of the Agreement for the continued operation of the Employers
is necessary): (i) by the Director of the Office of Thrift Supervision ("OTS"),
or his/her designee, at the time the Federal Deposit Insurance Corporation
("FDIC") 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 (12
U.S.C. Section 1823(c)); or (ii) by the Director of the OTS, or his/her
designee, at the time the Director or his/her designee approves a supervisory
merger to resolve problems related to operation of the Association or when the
Association is determined by the Director of the OTS to be in an unsafe or
unsound condition,
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but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.
18. Regulatory Prohibition. Notwithstanding any other provision of
this Agreement to the contrary, any payments made to the Executive pursuant to
this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and the
regulations promulgated thereunder.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
Attest: HOMESTEAD BANCORP, INC.
By:
----------------------------- ----------------------------------
Xxxxxx X. Xxxxxxxxxx,
Chairman of the Board
Attest: PONCHATOULA HOMESTEAD SAVINGS, F.A.
By:
----------------------------- ----------------------------------
Xxxxxx X. Xxxxxxxxxx,
Chairman of the Board
EXECUTIVE
By:
----------------------------------
Xxxxxxx X. Xxxxxxx
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