EMPLOYMENT AGREEMENT
This Agreement is made effective as of January 1, 2006 (the "Effective
Date"), by and between First Federal Savings & Loan Association of Edwardsville,
a stock savings association (the "Bank"), with its principal office in
Edwardsville, Illinois, and Xxxxxx Xxxxxxx ("Executive"). References to the
"Company" mean First Federal Financial Services, Inc., a federal corporation.
The Company shall be a signatory to this Agreement for the sole purpose of
guaranteeing the Bank's performance hereunder.
WHEREAS, Executive currently serves as an officer of the Bank and in order
to provide Executive further incentive to achieve the financial and performance
objectives of the Bank and the Company, the parties desire to enter into this
Agreement upon the terms and conditions hereof; and
WHEREAS, Executive agrees that this Agreement supersedes and replaces that
certain Executive Employment Agreement with the Bank dated as of June 29, 2004
and amended as of November 17, 2005.
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.
Executive agrees to serve as the Senior Vice President - Residential
Lending of the Company and the Bank. In this position, Executive shall be
responsible for establishing and implementing the business objectives, policies
and strategic plan of the Company and the Bank in connection with residential
lending activities, pursuant to direction from the Chief Executive Officer
and/or the Board of Directors. Executive also agrees to serve, if appointed or
elected, as an officer an director of any subsidiary or affiliate of the Bank.
2. TERM AND DUTIES.
(a) The period of Executive's employment under this Agreement shall begin
as of the Effective Date first above written and shall continue for a period of
twelve (12) 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 twelve (12) full calendar months; unless a written notice of non-renewal (a
"Non-Renewal Notice") is provided to Executive at least sixty (60) days and not
more than thirty (30) days prior to any anniversary date, that the term of this
Agreement shall not so renew. On an annual basis prior to the deadline for the
notice period referenced above, the Chief Executive Officer shall conduct a
performance review of Executive for purposes of determining whether to provide a
Non-Renewal Notice.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence approved by the Chief Executive Officer, Executive shall
devote substantially all his business time, attention, skill, and efforts to the
faithful performance of his duties hereunder including activities and services
related to the organization, operation and management of the Bank; provided,
however, that, with the approval of the Chief Executive Officer, Executive may
serve, or continue to serve, on the boards of directors of, and hold any other
offices or positions in, business companies or business organizations, which, in
the Chief Executive Officer'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, it being understood that membership in and
service on boards or committees of social, religious, charitable or similar
organizations does not require approval.
3. COMPENSATION, BENEFITS 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 $95,000 per year
("Base Salary"). Such Base Salary shall be payable biweekly, or with such other
frequency as officers and employees are generally paid. During the period of
this Agreement, Executive's Base Salary shall be reviewed at least annually.
Such review shall be conducted by the Chief Executive Officer, and the Bank may
increase, but not decrease (except a decrease that is generally applicable to
all employees) Executive's Base Salary (with any increase in Base Salary to
become "Base Salary" for purposes of this Agreement). In addition to the Base
Salary, 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. Base Salary shall include any amounts of compensation deferred by
Executive under qualified and nonqualified plans maintained by the Bank.
(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-and-accident insurance plans, medical coverage or any other employee
benefit plan or arrangement made available by the Bank or the Company 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 participate in any
incentive compensation and bonus plans offered by the Bank or the Company in
which Executive is eligible to participate. Nothing paid to Executive under any
such plan or arrangement will be deemed to be in lieu of other compensation to
which Executive is entitled under this Agreement.
(c) In addition to the Base Salary, the Bank or the Company shall pay or
reimburse Executive for all reasonable travel and other reasonable expenses
incurred by Executive performing his obligations under this Agreement and may
provide such additional compensation in such form and such amounts as the Chief
Executive Officer may from time to time determine. The Bank shall reimburse
Executive for his ordinary and necessary business expenses, including, without
limitation, fees for memberships in such clubs and organizations as Executive
and the Chief Executive Officer shall mutually agree are necessary and
appropriate for business purposes, and travel and entertainment expenses,
incurred in connection with the performance of his duties under this Agreement.
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4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during Executive's term of employment under this Agreement, the provisions of
this Section 4 shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any of the following:
(i) the termination by the Bank of Executive's full-time employment
hereunder for any reason other than termination governed by
Section 5 (Termination for Cause) or termination governed by
Section 6 (termination due to Disability or death); or
(ii) Executive's resignation from the Bank's employ for any of the
following reasons:
(A) the failure to elect or reelect or to appoint or reappoint
Executive to the position set forth under Section 1;
(B) a material change in Executive's functions, duties, or
responsibilities with the Bank, 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;
(C) a relocation of Executive's principal place of employment by
more than thirty (30) miles from its location at the
Effective Date;
(D) a material reduction in the benefits and perquisites to
Executive from those being provided as of the Effective
Date, other than an employee-wide reduction in pay or
benefits;
(E) a liquidation or dissolution of the Company or the Bank,
other than a liquidation or dissolution that is caused by a
reorganization or a mutual-to-stock conversion of the First
Federal Financial Services, MHC (the "Mutual Holding
Company") which does not affect the status of Executive; or
(F) a material breach of this Agreement by the Bank.
Upon the occurrence of any event described in clauses (A), (B),
(C), (D), (E) or (F), above, Executive shall have the right to
elect to terminate his employment under this Agreement by
resignation upon not less than sixty (60) days prior written
Notice of Termination, as defined in Section 9(b), given within
six (6) full calendar months after the event giving rise to said
right to elect. Notwithstanding the preceding sentence, in the
event of a continuing breach of this Agreement by the Bank,
Executive, after giving due notice within the prescribed time
frame of an initial event specified above, shall not waive any of
his rights under
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this Agreement and this Section solely by virtue of the fact that
Executive has submitted his resignation, provided Executive has
remained in the employment of the Bank and is engaged in good
faith discussions to resolve any occurrence of an event described
in clauses (A), (B), (C), (D) or (F) above.
(iii) (A) Executive's involuntary termination by the Bank or the
Company (or any successor thereto) on the effective date of, or
at any time following, a Change in Control, or (B) Executive's
resignation from the employment with the Bank or the Company (or
any successor thereto) following a Change in Control as a result
of any event described in Section 4(a)(ii)(A), (B), (C), (D), or
(F) above. For these purposes, a Change in Control of the Bank or
the Company shall mean a change in control of a nature that: (i)
would be required to be reported in response to Item 5.01 of the
current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
0000 (xxx "Xxxxxxxx Xxx"); or (ii) without limitation such a
Change in Control shall be deemed to have occurred at such time
as (a) any "person" (as the term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Mutual Holding
Company, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the
combined voting power of Company's outstanding securities except
for any securities purchased by the Bank's employee stock
ownership plan or trust; or (b) individuals who constitute the
Board of Directors of the Company on 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 a majority of the directors of the Board, shall
be, for purposes of this clause (b), considered as though he were
a member of the Incumbent Board; or (c) a plan of reorganization,
merger, consolidation, sale of all or substantially all the
assets of the Bank or the Company or similar transaction in which
the Bank or Company is not the surviving institution occurs; or
(d) a proxy statement is distributed soliciting proxies from
stockholders of the Company, by someone other than the current
management of the Company, seeking stockholder approval of a plan
of reorganization, merger or consolidation of the Company or
similar transaction with one or more corporations or financial
institutions, and as a result of such proxy solicitation, a plan
of reorganization, merger consolidation or similar transaction
involving the Company is approved by the requisite vote of the
Company's stockholders; or (e) a tender offer is made for 25% or
more of the voting securities of the Company and the shareholders
owning beneficially or of record 25% or more of the outstanding
securities of the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares
have been accepted by the tender offeror. Notwithstanding
anything to the contrary herein, a Change in Control shall not be
deemed to have occurred in the event that (i) the Company sells
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less than 50% of its outstanding common stock in one or more
stock offerings, or (ii) the Company or the Mutual Holding
Company converts to stock form by reorganizing into the stock
holding company structure.
(b) Upon the occurrence of an Event of Termination under Sections 4(a) (i)
or (ii), on the Date of Termination, as defined in Section 9(b), the Bank shall
be obligated to pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, an amount equal to the sum of: (i) his
earned but unpaid salary as of the date of his termination of employment with
the Bank; (ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company's officers and
employees; (iii) the remaining payments that Executive would have earned, in
accordance with Sections 3(a) and 3(b), if he had continued his employment with
the Bank for twelve (12) full months following such Event of Termination, and
had earned the maximum bonus or incentive award in each calendar year that ends
during such term; and (iv) the annual contributions or payments that would have
been made on Executive's behalf to any employee benefit plans of the Bank or the
Company as if Executive had continued his employment with the Bank for twelve
(12) full months following such Event of Termination, based on contributions or
payments made (on an annualized basis) at the Date of Termination. Any payments
hereunder shall be made in a lump sum within thirty (30) days after the Date of
Termination, or in the event that Section 409A of the Internal Revenue Code of
1986, as amended (the "Code") applies, no later than the first day of the
seventh month following the Date of Termination. Such payments shall not be
reduced in the event Executive obtains other employment following termination of
employment.
(c) Upon the occurrence of an Event of Termination under Section 4(a)(iii),
on the Date of Termination, as defined in Section 9(b), the Bank shall be
obligated to pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, an amount equal to the sum of: (i) his
earned but unpaid salary as of the date of his termination of employment with
the Bank; (ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company's officers and
employees; (iii) the remaining payments that Executive would have earned, in
accordance with Sections 3(a) and 3(b), if he had continued his employment with
the Bank for an eighteen (18) month period following such Event of Termination,
and had earned the maximum bonus or incentive award in each calendar year that
ends during such term; and (iv) the annual contributions or payments that would
have been made on Executive's behalf to any employee benefit plans of the Bank
or the Company as if Executive had continued his employment with the Bank for an
eighteen (18) month period following such Event of Termination, based on
contributions or payments made (on an annualized basis) at the Date of
Termination. Any payments hereunder shall be made in a lump sum within thirty
(30) days after the Date of Termination, or in the event that Section 409A of
the Code applies, no later than the first day of the seventh month following the
Date of Termination. Such payments shall not be reduced in the event Executive
obtains other employment following termination of employment.
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(d) To the extent required under applicable law, upon the occurrence of an
Event of Termination, the Bank will cause to be continued life, medical and
disability coverage substantially identical to the coverage maintained by the
Bank for Executive and his family prior to Executive's termination.
(e) Notwithstanding anything in this Agreement to the contrary, in no event
shall the aggregate payments or benefits to be made or afforded to Executive
under this Section constitute an "excess parachute payment" under Section 280G
of the Code or any successor thereto, and in order to avoid such a result,
Executive's benefits hereunder shall be reduced, if necessary, to an amount, the
value of which is one dollar ($1.00) less than an amount equal to three (3)
times Executive's "base amount," as determined in accordance with Section 280G.
The allocation of the reduction required hereby shall be determined by
Executive.
5. TERMINATION FOR JUST CAUSE.
(a) The term "Termination for Just Cause" shall mean termination because
of: (i) Executive's being convicted of a felony or of any lesser criminal
offense involving moral turpitude; (ii) the willful commission by the Executive
of a criminal or other act that, in the judgment of the Chief Executive Officer,
would likely cause substantial economic damage to the Company or the Bank or
substantial injury to the business reputation of the Company or Bank; (iii) the
commission by the Executive of any act of fraud in the performance of his duties
on behalf of the Company or Bank or a material violation of the Company's or the
Bank's code of ethics; (iv) the continuing willful failure of the Executive to
perform his duties to the Company or the Bank (other than any such failure
resulting from the Executive's incapacity due to physical or mental illness)
after written notice thereof has been given to Executive by the Chief Executive
Officer (specifying the particulars thereof in reasonable detail) and Executive
has been given a reasonable opportunity to be heard and cure such failure; or
(v) an order of a federal or state regulatory agency or a court of competent
jurisdiction requiring the termination of the Executive's employment by the
Company or the Bank. For purposes of this Section, no act, or the failure to
act, on Executive's part shall be "willful" unless done, or omitted to be done,
in bad faith and without reasonable belief that the action or omission was in
the best interests of the Bank or its affiliates.
(b) Notwithstanding Section 5(a), neither the Company nor the Bank may
terminate Executive for Just Cause unless and until there shall have been
delivered to him a Notice of Termination, finding that in the good faith opinion
of the Chief Executive Officer, Executive was guilty of conduct justifying
Termination for Just Cause and specifying the particulars thereof in detail.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Just Cause. During the period beginning on the
date of the Notice of Termination for Just Cause through the Date of
Termination, any unvested stock options and related limited rights granted to
Executive under any stock option plan shall not be exercisable nor shall any
unvested awards granted to Executive under any stock benefit plan of the Bank,
the Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination, any such unvested stock options and related limited rights and any
such unvested awards shall become null and void and shall not be exercisable by
or delivered to Executive at any time subsequent to such Termination for Just
Cause. In the Event of Executive's Termination for Just Cause, to the extent the
Executive serves as a director of the Company and the Bank, and/or as a director
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and/or officer of any subsidiary or affiliate of the Company and/or the Bank,
the Executive's service in such positions shall immediately terminate.
6. TERMINATION FOR DISABILITY OR DEATH.
(a) The Bank or Executive may terminate Executive's employment after having
established Executive's Disability. For purposes of this Agreement, "Disability"
means a physical or mental infirmity that impairs Executive's ability to
substantially perform his duties under this Agreement and that results in
Executive's becoming eligible for long-term disability benefits under a
long-term disability plan of the Company or the Bank (or, if the Company or the
Bank has no such plan in effect, that impairs Executive's ability to
substantially perform his duties under this Agreement for a period of one
hundred eighty (180) consecutive days). The Chief Executive Officer shall
determine in good faith, based upon competent medical advice and other factors
that he reasonably believes to be relevant, whether or not Executive is and
continues to be disabled for purposes of this Agreement. As a condition to any
benefits, the Chief Executive Officer may require Executive to submit to such
physical or mental evaluations and tests as he deems reasonably appropriate, at
the Bank's expense. In the event of such Disability, Executive's obligation to
perform services under this Agreement will terminate. In the event of such
termination, Executive shall continue to receive his Base Salary at the rate in
effect on the Date of Termination for the remainder of the then-current term.
Such payments shall be reduced by the amount of any short- or long-term
disability benefits payable to Executive under any disability program sponsored
by the Company or the Bank.
(b) In the event of Executive's death during the term of this Agreement,
his estate, legal representatives or named beneficiary or beneficiaries (as
directed by Executive in writing) shall be paid Executive's Base Salary, at the
rate in effect at the time of Executive's death for the remainder of the
then-current term.
7. TERMINATION UPON RETIREMENT
Termination of Executive's employment based on "Retirement" shall mean
termination of Executive's employment on or after age 65 or in accordance with
any retirement policy established by the Bank or the Company with Executive's
consent with respect to him. Upon termination of Executive based on Retirement,
no amounts or benefits shall be due Executive under this Agreement, and
Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.
8. RESIGNATION FROM BOARDS OF DIRECTORS
In the event of termination of Executive's employment for any reason other
than upon a Change in Control, to the extent that Executive serves as a director
of the Company and the Bank, and/or as a director and/or officer of any
subsidiary or affiliate of the Company and/or the Bank, Executive shall
immediately resign as a director.
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9. NOTICE.
(a) Any notice required hereunder shall be in writing and hand-delivered to
the other party. Any 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
provide 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 his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the Notice
of Termination.
(c) If the party receiving a Notice of Termination desires to dispute or
contest the basis or reasons for termination, the party receiving the Notice of
Termination must notify the other party within thirty (30) days after receiving
the Notice of Termination that such a dispute exists, and shall pursue the
resolution of such dispute in good faith and with reasonable diligence. During
the pendency of any such dispute, neither the Company nor the Bank shall be
obligated to pay Executive compensation or other payments beyond the Date of
Termination.
10. 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 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
Company.
11. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
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, including, without limitation, that
certain Executive Employment Agreement dated as of June 29, 2004 and amended as
of November 17, 2005, except that this Agreement shall not affect or operate to
reduce any benefit or compensation inuring to 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 him
without reference to this Agreement.
12. NO ATTACHMENT; BINDING ON SUCCESSORS.
(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,
8
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect 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.
13. 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 be 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.
14. REQUIRED PROVISIONS.
(a) If 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) [12 USC ss.1818(e)(3)] or 8(g)(1) [12 USC ss.1818(g)(1)] of the
Federal Deposit Insurance Act (the "FDI Act"), the Bank's 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 Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while its contract obligations were suspended and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.
(b) If 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)(4) [12 USC ss.1818(e)(4)] or 8(g)(1) [12 USC ss.1818(g)(1)] of the
FDI Act, all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the contracting parties
shall not be affected.
(c) If the Bank is in default as defined in Section 3(x)(1) [12 USC
ss.1813(x)(1)] of the FDI Act, all obligations of the Bank under this Agreement
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.
(d) All obligations under this contract shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank, (i) by the Director of the OTS or his or her
designee, at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) [12 USC
ss.1823(c)] of the FDI Act; or (ii) by the Director or his or her designee at
the time the Director or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank 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.
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(e) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Company, whether pursuant to this Agreement or otherwise,
are subject to and conditioned upon their compliance with Section 18(k) of the
FDI Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder
in 12 C.F.R. Part 359.
15. 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.
16. 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.
17. 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.
18. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, conducted before
a single arbitrator selected by the Bank and Executive sitting in a location
selected by the Bank and Executive within twenty-five (25) miles of
Edwardsville, Illinois 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.
19. 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, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in Executive's favor.
20. INDEMNIFICATION.
(a) The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) to the fullest extent permitted under
applicable law against all expenses and liabilities reasonably incurred by him
in connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of his 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
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include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements (such settlements must be approved by the
Board); provided, however, the Bank shall not be required to indemnify or
reimburse Executive for legal expenses or liabilities incurred in connection
with an action, suit or proceeding arising from any illegal or fraudulent act
committed by Executive. Any such indemnification shall be made consistent with
OTS Regulations and Section 18(K) of the Federal Deposit Insurance Act, 12
U.S.C. ss.1828(K), and the regulations issued thereunder in 12 C.F.R. Part 359.
(b) Notwithstanding the foregoing, no indemnification shall be made unless
the Bank gives the OTS at least 60 days' notice of its intention to make such
indemnification. Such notice shall state the facts on which the action arose,
the terms of any settlement, and any disposition of the action by a court. Such
notice, a copy thereof, and a certified copy of the resolution containing the
required determination by the Board shall be sent to the Regional Director of
the OTS, who shall promptly acknowledge receipt thereof. The notice period shall
run from the date of such receipt. No such indemnification shall be made if the
OTS advises the Bank in writing within such notice period, of its objection
thereto.
IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to
be executed by their duly authorized representatives, and Executive has signed
this Agreement, effective as of the date first above written. The Company has
become a party to this Agreement for the sole purpose of binding itself to the
duties and obligations set forth herein.
ATTEST: FIRST FEDERAL SAVINGS & LOAN
ASSOCIATION OF EDWARDSVILLE
/s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxx
--------------------------------- ------------------------------
Xxxxx Xxxxxx, Corporate Secretary Xxxxx X. Xxxxx, President and
Chief Executive Officer
ATTEST: FIRST FEDERAL FINANCIAL
SERVICES, INC.
/s/ Xxxxx Xxxxxx By: /s/Xxxxx X. Xxxxx
--------------------------------- ------------------------------
Xxxxx Xxxxxx, Corporate Secretary Xxxxx X. Xxxxx, President and
Chief Executive Officer
WITNESS: EXECUTIVE:
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx
--------------------------------- ------------------------------
Xxxxxx Xxxxxxx
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