EMPLOYMENT AGREEMENT
Exhibit
10.1
AGREEMENT
dated this 1st day of July 2006 between Citizens Financial Bank (the "Bank"),
a
federally chartered savings bank, and Xxxxxx X. Xxxxxx (the
"Executive").
WITNESSETH
WHEREAS,
the Executive is presently an officer of CFS Bancorp, Inc. (the "Corporation")
and the Bank (together, the "Employers");
WHEREAS,
the Employers desire to be ensured of the Executive's continued active
participation in the business of the Employers;
WHEREAS,
the Corporation and the Bank desire to enter into separate agreements with
the
Executive with respect to his employment by each 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 by the Bank in the event that his employment with the Bank
is
terminated under specified circumstances;
NOW
THEREFORE, in consideration of the mutual agreements herein contained, and
upon
the other terms and conditions hereinafter provided, 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 Base Salary, cash bonuses and
amounts
allocated to the Executive under any qualified employee benefit plans
of
the Employers for the preceding three
years.
|
| b) |
Base
Salary.
"Base Salary" shall have the meaning set forth in Section 4(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.
|
| d) |
Change
in Control. “Change
in Control” means the occurrence of any of the following: (i) an event
that would be required to be reported in response to Item 5.01 of
Form 8-K
or Item 6(e) of Schedule 14A of Regulation 14A pursuant to the 1934
Securities and Exchange Act of 1934, as amended (1934 Act), or any
successor thereto, whether or not any class of securities of the
Corporation is registered under the 1934 Act; (ii) any “person” is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934
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 (iii) during any period of thirty-six
consecutive months, 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.
|
| i) |
For
purposes of the definition of “Change in Control,” a Person or group of
Persons does not include the CFS Bancorp, Inc. Employee Stock Ownership
Plan Trust which forms a part of the CFS Bancorp, Inc. Employee Stock
Ownership Plan (the “ESOP”), or any other employee benefit plan,
subsidiary or affiliate of the Corporation, and the outstanding shares
of
common stock of the Corporation, on a fully diluted basis, include
all
shares owned by the ESOP, whether allocated or unallocated to the
accounts
of participants, thereunder.
|
| ii) |
For
purposes of the definition of “Change in Control,” the term “Person” means
any natural person, proprietorship, partnership, corporation, limited
liability company, organization, firm, business, joint venture,
association, trust or other entity and any government agency, body
or
authority.
|
| e) |
Code.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
|
| f) |
Date
of Termination.
"Date of Termination" shall mean (i) if the Executive's employment
is
terminated for Cause or for Disability, the date specified in the
Notice
of Termination, and (ii) if the Executive's employment is terminated
for
any other reason, the date on which a Notice of Termination is given
or as
specified in such Notice.
|
| g) |
Disability.
Termination by the Bank 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 within two years following a Change
in
Control of the Corporation based
on:
|
2
| 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
Chief Executive Officer of the Employers or a material adverse change
made
by the Employers in the Executive's functions, duties or responsibilities
as Chief Executive Officer of the
Employers;
|
| ii) |
Without
the Executive's express written consent, a reduction by either of
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 4(b) hereof,
a
reduction in the package of fringe benefits provided to the Executive,
taken as a whole;
|
| iii) |
The
principal executive office of either of the Employers is relocated
more
than ten miles from Munster, Indiana or, without the Executive's
express
written consent, either of the Employers require the Executive to
be based
anywhere other than an area in which the Employers' principal executive
office is located, 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 Disability
or
Retirement which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (k) below;
or
|
| vi) |
The
failure by the Bank to obtain the assumption of and agreement to
perform
this Agreement by any successor.
|
| i) |
IRS.“IRS”
shall mean the Internal Revenue
Service.
|
| j) |
Key
Employee.
"Key
Employee"
means an employee who is:
|
| i) |
An
officer of the Corporation having annual compensation greater than
$140,000;
|
| ii) |
A
five-percent owner of the Corporation;
or
|
| iii) |
A
one-percent owner of the Corporation having an annual compensation
greater
than $150,000.
|
For
purposes of determining who is an officer for purposes of Section 1(j)(i),
no
more than 50 employees (or, if lesser, the greater of three or 10 percent of
the
employees) shall be treated as officers, and those categories of employees
listed in Code Section 414(q)(5) shall be excluded. The
$140,000 amount shall be adjusted at the same time and in the same manner as
under Code Section 415(d), except that the base period shall be the calendar
quarter beginning July 1, 2001, and any increase under this sentence which
is
not a multiple of $5,000 shall be rounded to the next lower multiple of
$5,000.
| k) |
Notice
of Termination.
Any purported termination of the Executive's employment by the Bank
for
any reason, including without limitation for Cause, Disability or
Retirement, or
|
3
|
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 Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be
not less
than 30 nor more than 90 days after such Notice of Termination is
given,
except in the case of the Bank's termination of Executive's employment
for
Cause, which shall be effective immediately; and (iv) is given in
the
manner specified in Section 11
hereof.
|
| l) |
Retirement.
"Retirement" shall mean voluntary termination by the Executive after
the
Executive attains the age 55, with at least five years of active
service.
|
| m) |
Separation
from Service.
"Separation
from Service"
means the date on which the Executive dies, retires or otherwise
experiences a Termination of Employment with the Corporation. Provided,
however, a Separation from Service does not occur if the Executive
is on
military leave, sick leave, or other bona fide leave of absence (such
as
temporary employment by the government) if the period of such leave
does
not exceed six months, or if the leave is for a longer period, so
long as
the individual’s right to reemployment with the Corporation is provided
either by statute or by contract. If the period of leave exceeds
six
months and the Executive’s right to reemployment is not provided either by
statute or contract, there shall be a Separation from Service on
the first
date immediately following such six-month period. Executive shall
incur a
"Termination
of Employment"
when a termination of employment is incurred under Proposed Treasury
Regulation 1.409A-1(h)(ii) or any final version of such Proposed
Regulation.
|
| n) |
Specified
Employee.
“Specified Employee” means an employee who is a “Key Employee” if the
Corporation’s stock is publicly traded on an established securities
market. An employee shall be a Specified Employee for the twelve-month
period beginning on the April 1st
following any calendar year in which the employee is a Key
Employee.
|
| 2) |
Term
of Employment.
|
| a) |
The
Bank hereby employs the Executive as its Chief Executive Officer,
and the
Executive hereby accepts said employment and agrees to render such
services to the Bank on the terms and conditions set forth in this
Agreement. The term of this Agreement shall be a period of three
years
commencing as of the date hereof (the "Commencement Date"), subject
to
earlier termination as provided herein. Reference herein to the term
of
this Agreement shall refer to both such initial term and any extended
terms. The Board of Directors of the Bank shall review on a periodic
basis
(and no less frequently than annually) whether to permit further
extensions of the term of this Agreement. As part of such review,
the
Board of Directors shall consider all relevant factors, including
the
|
4
|
Executive's
performance hereunder, and shall either expressly approve further
extensions of the time of this Agreement or decide to provide notice
to
the contrary.
|
| b) |
During
the term of this Agreement, the Executive shall perform such executive
services for the Bank as may be consistent with his titles and from
time
to time assigned to him by the Bank’s Board of Directors.
The Executive further agrees to serve without additional compensation
as
an officer and director of any of the Bank's subsidiaries and agrees
that
any amounts received from such corporation may be offset against
the
amounts due hereunder. In addition, it is agreed that the Bank may
assign
the Executive to one of its subsidiaries for payroll
purposes.
|
| 3) |
Loyalty,
Confidentiality and
Non-Competition
|
| a) |
The
Executive shall devote his or her full time and best efforts to the
performance of his or her employment under this Agreement. During
the term
of this Agreement, the Executive shall not, at any time or place,
either
directly or indirectly engage in any business or activity in competition
with the business affairs or interests of the Employers or be a director,
officer or consultant to any bank, savings and loan association,
credit
union, thrift, savings bank, or similar institution in the Chicago
CMSA.
|
| b) |
For
a period of three years from the date of voluntary termination, or
termination for Cause, the Executive shall not, at any time or place,
either directly or indirectly engage in any business or activity
in
competition with the business affairs or interests of the Employers
or be
a director, officer or consultant to any bank, savings and loan
association, credit union, thrift, savings bank, or similar institution
in
the Chicago CMSA.
|
| c) |
For
purposes of this Agreement, directly or indirectly engaging in any
business activity in competition with the business or affairs of
the
Employers includes, but is not limited to, serving or acting as an
owner,
partner, agent, beneficiary, or employee of any person, firm or corporate
entity so engaged; except that nothing herein contained shall be
deemed to
prevent or limit the right of Executive to invest any of his surplus
funds
in the capital stock or other securities of any corporation whose
stock or
securities are publicly owned or are regularly traded on any public
exchange, nor shall anything herein contained be deemed to prevent
employee from investing or limit employee's right to invest his surplus
funds in real estate.
|
| d) |
All
information relating to business of the Employers including, but
not
limited to, that business obtained or serviced by Executive and all
customer listings, contact lists, expiration cards, asset reports,
instruments, documents, papers and other material used in connection
with
such business, shall be the exclusive property of the Employers.
Executive
shall keep all such information and material confidential; none of
it
shall be copied, reproduced or duplicated without the express written
permission of the Employers, and Executive shall return all material
containing such information to
|
5
|
Employers
upon their request or upon termination of employment. Executive also
agrees that he or she shall not utilize the confidential information
or
trade secrets of the Employers, either directly or indirectly, for
any
purposes except performance of the Executive's responsibilities and
in
furtherance of the Employers’ business, unless otherwise expressly
authorized by Employers in writing in advance.
|
| e) |
Executive
agrees that, during his employment, and for a period of three years
following the date of his involuntary termination of employment for
Cause,
or his voluntary termination without Good Reason, the
Executive:
|
| i) |
shall
not solicit any of the Employers’ past or current customers or clients for
the benefit of anyone other than Employers or their
affiliates;
|
| ii) |
shall
not divulge the names of any of the Employers’ past or then current
customers to any other person, corporation or
entity;
|
| iii) |
shall
not divulge to anyone, except the Employers or their representatives,
any
information regarding their management strategies, marketing information
or goals, policies and/or other information regarding the affairs
of the
Employers, all of which Executive is hereby obligated to keep secret,
however and whenever such information comes to his or her attention;
and
|
| iv) |
shall
not, either directly or indirectly, induce or solicit any person
to leave
the employ of the Employers.
|
| 4) |
Compensation
and Benefits.
|
| a) |
The
Employers shall compensate and pay the Executive for his services
during
the term of this Agreement at a minimum base salary of $370,240 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
and may
not be decreased without the Executive's express written consent.
In
addition to his 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 this 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 his then duties and
responsibilities, as fixed by the Boards of Directors of the Employers.
The Bank 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 Bank and does not result in a
proportionately greater adverse change in the rights of or benefits
to the
Executive as
|
6
|
compared
with any other executive officer of the Bank. 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 4(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.
|
| d) |
In
the event the Executive's employment is terminated due to Disability
or
Retirement, the Employers shall provide, at its cost, all existing
life
and medical insurance coverage for the Executive and his spouse for
a
period until they both become eligible for Medicare coverage. Thereafter,
the Executive may continue, at his cost, the health insurance coverage
as
an eligible retired employee under the Employer’s health and medical
benefit plans.
|
| e) |
In
the event of the Executive's death during the term of this Agreement
or
following his termination due to Disability or Retirement, the Employers
shall provide to the Executive's spouse continued medical health
benefits
substantially identical to the coverage maintained by the Employers
for
the Executive immediately prior to his death until such time as his
spouse
becomes eligible for Medicare
coverage.
|
| f) |
The
Executive's compensation, benefits and expenses shall be paid by
the
Corporation and the Bank in the same proportion as the time and services
actually expended by the Executive on behalf of each respective
Employer.
|
| g) |
During
the term of this Agreement, the Employers shall provide to the Executive,
at the Employers’ cost, all perquisites which other senior executives of
the Employers are generally entitled to receive, including the payment
of
his annual dues at his Country
Club.
|
| h) |
During
the term of the Agreement, the Employers shall provide suitable office
space, desk,
chairs, filing cabinets, telephones and other usual and customary
office
furniture, fixtures and equipment adequate for the efficient performance
of the duties assigned to the
Executive.
|
| i) |
During
the term of this Agreement, the Employers
shall provide to Executive the use of an automobile of Executive's
choice
with an average annual lease cost not to exceed $10,000 per year.
The
Employers agree to replace the automobile with a new one at Executive's
request no more often than once every two years. Corporation shall
pay all
automobile operating expenses incurred by Executive in the performance
of
Executive's
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7
|
duties.
Corporation shall procure and maintain in force an automobile liability
policy for the automobile with coverage, including Executive, in
the
minimum amount of $1,000,000 combined single limit on bodily injury
and
property damage.
|
5)
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 with the business of the Employers,
including, but not by way of limitation, automobile expenses and other 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.
| 6) |
Termination.
|
| a) |
The
Bank 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 his employment hereunder for any
reason.
|
| b) |
In
the event that (i) the Executive's employment is terminated by the
Bank
for Cause or (ii) the Executive terminates his employment hereunder
other
than for Disability, Retirement, death or 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 the Executive's employment is terminated as a result
of
Disability, Retirement or the Executive's death during the term of
this
Agreement, the Executive shall have no right pursuant to this Agreement
to
compensation or other benefits for any period after the applicable
Date of
Termination, except as provided for in Sections 4(d) and 4(e)
hereof.
|
| d) |
In
the event that (i) the Executive's employment is terminated by the
Bank
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 Bank, which breach has not been cured
within fifteen days after a written notice of non-compliance has
been
given by the Executive to the Employers, or (b) for Good Reason,
then the
Bank shall, subject to the provisions of Section 7 hereof, if
applicable:
|
| i) |
pay
to the Executive, a cash severance amount equal to three times that
portion of the Executive's Average Annual Compensation paid by the
Bank,
in two equal installments, with the first installment to be paid
on the
first business day of the month following the Executive’s Date of
Termination and the second installment to be paid no later than January
15th
of
the calendar year following the year in which the first installment
was
paid; and
|
8
| ii) |
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, at no cost to the Executive, the Executive's continued
participation in all group insurance, life insurance, health and
accident
insurance, disability insurance and other employee benefit plans,
programs
and arrangements offered by the Bank in which the Executive was entitled
to participate immediately prior to the Date of Termination (excluding
(x)
stock option and restricted stock plans of the Employers, (y) bonuses
and other items of cash compensation included in Average Annual
Compensation and (z) other benefits, or portions thereof, included in
Average Annual Compensation), 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 Bank shall arrange to provide the Executive
with
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.
|
| e) |
If
at the time of the Executive’s Separation from Service, for any reason
other than death, the Executive meets the definition of a Specified
Employee, payment of all amounts under subsections 6(d)(i) and (ii)
and
7(a) shall be suspended for six months following the Executive’s
Separation from Service. In such event, the first installment shall
be
paid on the first day following the end of the six-month suspension
period. The second installment shall be paid no later than January
15th
of
the calendar year following the year in which the first installment
was
paid. If the Executive incurs a Separation from Service due to death,
regardless of whether the Executive meets the definition of a Specified
Employee, payment of his benefit shall not be suspended. Provided,
however, that the six-month suspension period shall not apply to
the
provision of any group insurance, life insurance, health and accident
insurance or disability insurance under subsection
6(d)(ii).
|
7)
Limitation of Benefits under Certain Circumstances. If
the
payments and benefits pursuant to Section 6 hereof, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Bank, would constitute a "parachute payment" under Section 280G
of the
Code, the payments and benefits payable by the Bank pursuant to Section 6
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 payable by the Bank under Section 6 being non-deductible to the
Bank
pursuant to Section 280G of the Code and subject to the excise tax imposed
under
Section 4999 of the Code. The parties hereto agree that the present value
of the
payments and benefits payable pursuant to this Agreement to the Executive
upon
termination shall be limited to three times the Executive's Average Annual
Compensation. The determination of any reduction in the payments and benefits
to
be made pursuant to Section 6 shall be based upon the opinion of independent
counsel selected by the
9
|
Bank's
independent public accountants and paid by the Bank. Such counsel
shall be
reasonably acceptable to the Bank and the Executive; shall promptly
prepare the foregoing opinion, but in no event later than thirty
days from
the Date of Termination; and may use such actuaries as such counsel
deems
necessary or advisable for the purpose. 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 7, or a reduction in the
payments
and benefits specified in Section 6 below
zero.
|
| 8) |
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.
|
9)
Withholding. All payments required to be made by the Bank
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or
regulation.
10)
Assignability. The Bank 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 Bank may hereafter merge or
consolidate or to which the Bank may 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 Bank
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.
11)
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:
| a) |
To
the
Bank:
Corporate Secretary
|
Citizens
Financial Bank
000
Xxxxx
Xxxx
Xxxxxxx,
Xxxxxxx
00000
| b) |
To
the Corporation: Corporate
Secretary
|
10
CFS
Bancorp,
Inc.
000
Xxxxx
Xxxx
Xxxxxxx,
Xxxxxxx
00000
| c) |
To
the Executive:
Xxxxxx
X. Xxxxxx
|
[Address
Redacted]
12)
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 Board of Directors of
the
Bank 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.
13)
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
Indiana.
14)
Nature of Obligations. Nothing contained herein shall
create or require the Bank 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 Bank hereunder, such right shall be no
greater than the right of any unsecured general creditor of the
Bank.
15)
Headings. 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.
16)
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.
17)
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 shall constitute one and the same instrument.
18)
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. §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 6 hereof.
11
| 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. §§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.
§§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 Bank is in default, as defined in Section 3(x)(1) of the FDIA
(12
U.S.C. §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.
§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 Bank under the authority contained in Section 13(c)
of
the FDIA (12 U.S.C. §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
Bank or
when the Bank is determined by the Director of the OTS to be in an
unsafe
or unsound condition, but vested rights of the Executive and the
Employers
as of the date of termination shall not be
affected.
|
19)
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 Federal Deposit Insurance Act (12
U.S.C. §1828(k)) and the regulations promulgated thereunder, including 12 C.F.R.
Part 359. In the event of the Executive's termination of employment with
the Bank for Cause, all employment relationships and managerial duties with
the
Bank shall immediately cease regardless of whether the Executive remains in
the
employ of the Corporation following such termination. Furthermore, following
such termination for Cause, the Executive shall not, directly or indirectly,
influence or participate in the affairs or the operations of the
Bank.
12
20)
Payment of Costs and Legal Fees and Reinstatement of Benefits.
In the event any dispute or controversy arising under or in
connection with the Executive's termination is resolved in favor of the
Executive, whether by judgment, arbitration or settlement, the Executive shall
be entitled to the payment of (a) all legal fees incurred by the Executive
in resolving such dispute or controversy, and (2) any back-pay, including
Base Salary, bonuses and any other cash compensation, fringe benefits and any
compensation and benefits due to the Executive under this
Agreement.
21)
Entire Agreement. This Agreement embodies the entire
agreement between the Bank and the Executive with respect to the matters agreed
to herein. All prior agreements between the Bank and the Executive with respect
to the matters agreed to herein are hereby superseded and shall have no force
or
effect. Notwithstanding the foregoing, nothing contained in this Agreement
shall
affect the agreement of even date being entered into between the Corporation
and
the Executive.
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.
Attest: CITIZENS
FINANCIAL BANK
/s/
Xxxxxx X. Xxxxxxxx By:
/s/
Xxxxx X.Xxxxx
EXECUTIVE
/s/
Xxxxxx X.
Xxxxxx
Xxxxxx
X.
Xxxxxx
13
