Exhibit 99.2
[EXECUTIVE NAME]
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CHANGE OF CONTROL AGREEMENT
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THIS CHANGE OF CONTROL AGREEMENT (this "Agreement") is made as of the
___ day of ______________, 2001, (the "Effective Date") by and between KANKAKEE
BANCORP, INC., a Delaware corporation (the "Company") and ______________________
("Executive").
RECITALS
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A. The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company and its Affiliates will have the continued dedication of
Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company.
B. Executive is currently serving as an executive of the Company or one
of its Affiliates.
C. The Company desires to continue to employ Executive as an executive
of the Company or one of its Affiliates and Executive is willing to continue
such employment.
D. The Company recognizes that circumstances may arise in which a
Change of Control of the Company through acquisition or otherwise may occur
thereby causing uncertainty of employment without regard to the competence or
past contributions of Executive, which uncertainty may result in the loss of
valuable services of Executive, and the Company and Executive wish to provide
reasonable security to Executive against changes in the employment relationship
in the event of any such Change of Control.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:
AGREEMENTS
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1. Payment of Severance Amount. If Executive's employment by the
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Company, or any Affiliate or successor of the Company, is terminated by either
the Company or Executive during the time periods set forth in subparagraphs (a)
and (b) below, then the Company shall pay Executive an amount equal to the
Severance Amount, payable in one (1) lump sum within fifteen (15) days after the
Termination Date:
(a) Termination by the Company, or any Affiliate or successor of the
Company, without Cause, within either six (6) months prior to a Change
of Control or twelve (12) months immediately following a Change of
Control; or
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(b) Termination by Executive, other than as a result of death,
disability, or normal retirement pursuant to a retirement plan to which
Executive was subject prior to any Change of Control, and following a
Change in Duties, which Change in Duties and termination shall occur
within twelve (12) months immediately following a Change of Control.
2. Definitions. All of the terms defined in this paragraph 2 shall have
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the meanings given below throughout this Agreement.
(a) "Affiliate" shall mean any entity which owns or controls, is
owned by or is under common ownership or control with, the Company,
including without limitation, Kankakee Federal Savings Bank.
(b) "Annual Base Salary" shall, as determined on the Termination
Date, be equal to the greater of:
(i) Executive's annual salary, excluding bonuses, benefits and
special incentive payments, on the date of the earliest
event which constitutes a Change of Control; or
(ii) Executive's annual salary, excluding bonuses, benefits and
special incentive payments, as of the Termination Date.
(c) "Bank" shall mean Kankakee Federal Savings Bank.
(d) "Cause" shall mean the termination of Executive's employment as
a result of:
(i) fraud, misappropriation of or intentional material damage
to the property or business of the Company (including its
Affiliates),
(ii) substantial and material failure by Executive to fulfill
the duties and responsibilities of his or her regular
position and/or comply with the Company's or its
Affiliates' policies, rules or regulations, or
(iii) Executive's conviction of a felony.
(e) "Change in Duties" shall mean any one or more of the following
occurring after a Change of Control:
(i) a significant change in the nature or scope of Executive's
authority or duties from those applicable to Executive
immediately prior to the date on which a Change of Control
occurs;
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(ii) a reduction in Executive's Annual Base Salary (within the
meaning of Section 2(b)(i)) from that provided to
Executive immediately prior to the date on which a Change
of Control occurs;
(iii) Executive's eligibility to participate, and participation,
in bonus, stock option, incentive award and other
compensation plans which provide opportunities to receive
compensation are not the same or greater than that of
executives of the successor of the Company (including its
Affiliates) with comparable duties;
(iv) executive benefits (including but not limited to medical,
dental, life insurance and long-term disability plans) and
perquisites applicable to Executive are not the same as or
greater than that of the executive benefits and
perquisites provided to executives of the successor of the
Company (including its Affiliates) with comparable duties;
or
(v) a change, without Executive's written agreement, in the
location of Executive's principal place of employment with
the Company (including its Affiliates) by more than fifty
(50) miles from the location where Executive was
principally employed immediately prior to the date on
which a Change of Control occurs.
(f) "Change of Control" shall mean the following:
(i) The consummation of the acquisition by any person (as such
term is defined in Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934
Act")) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the 0000 Xxx) of twenty-five
percent (25%) or more of the combined voting power of the
then outstanding Voting Securities of the Company;
(ii) The individuals who, as of the date hereof, are members of
the Board cease for any reason to constitute a majority of
the Board, unless the election, or nomination for election
by the stockholders, of any new director was approved by a
vote of a majority of the Board, and such new director
shall, for purposes of this Agreement, be considered as a
member of the Board; or
(iii) Consummation of: (1) a merger or consolidation to which
the Company is a party if the stockholders of the Company
immediately before such merger or consolidation do not, as
a result of such merger or consolidation, own, directly or
indirectly, more than sixty-seven percent (67%) of the
combined voting power of the then outstanding Voting
Securities of the entity resulting from such merger or
consolidation in substantially the same proportion
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as their ownership of the combined voting power of the
Company's Voting Securities outstanding immediately before
such merger or consolidation; or (2) a complete liquidation
or dissolution or sale or other disposition of all or
substantially all of the assets of the Company or the Bank.
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because twenty-five percent (25%) or more of the combined
voting power of the Company's then outstanding Voting Securities is
acquired by: (1) a trustee or other fiduciary holding securities under one
or more employee benefit plans maintained for employees of the entity; or
(2) any corporation which, immediately prior to such acquisition, is owned
directly or indirectly by the stockholders in the same proportion as their
ownership of stock immediately prior to such acquisition.
(g) "Severance Amount" shall mean the amount equal to all amounts
earned or accrued through the Termination Date, including Annual Base
Salary (within the meaning of Section 2(b)(i)) and vacation pay, plus an
amount equal to three (3) times the sum of: (i) Executive's Annual Base
Salary; (ii) the average of the two (2) most recent annual performance
bonuses received by the Executive as of the date of the Change of Control;
and (iii) the average of the contributions made by the Company to
tax-qualified retirement plans for the benefit of the Executive for the two
(2) years immediately preceding the date of the Change of Control.
(h) "Termination Date" shall mean the date of employment termination
indicated in the written notice provided by the Company or Executive to the
other.
(i) "Voting Securities" shall mean any securities which ordinarily
possess the power to vote in the election of directors without the
happening of any pre-condition or contingency.
3. Golden Parachute Payment Adjustment. If it is determined, in the
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opinion of the Company's independent accountants, in consultation, if necessary,
with the Company's independent legal counsel, that any Severance Amount payments
under this Agreement, either separately or in conjunction with any other
payments, benefits and entitlements received by Executive in respect of a Change
of Control under any other plan or agreement under which Executive participates
or to which the Executive is a party, would constitute an "Excess Parachute
Payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and thereby be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax"), then in such event the Company
shall pay to Executive a "grossing-up" amount equal to the amount of such Excise
Tax, plus all federal and state income or other taxes with respect to the
payment of the amount of such Excise Tax, including all such taxes with respect
to any such grossing-up amount. If, at a later date, the Internal Revenue
Service assesses a deficiency against Executive for the Excise Tax which is
greater than that which was determined at the time such amounts were paid, then
the Company shall pay to Executive the amount of such unreimbursed Excise Tax
plus any interest, penalties and reasonable professional fees or expenses
incurred by Executive as a result of such assessment, including all such taxes
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with respect to any such additional amount. The highest marginal tax rate
applicable to individuals at the time of the payment of such amounts will be
used for purposes of determining the federal and state income and other taxes
with respect thereto. The Company shall withhold from any amounts paid under
this Agreement the amount of any Excise Tax or other federal, state or local
taxes then required to be withheld. Computations of the amount of any
grossing-up supplemental compensation paid under this subparagraph shall be
conclusively made by the Company's independent accountants, in consultation, if
necessary, with the Company's independent legal counsel. If, after Executive
receives any gross-up payments or other amount pursuant to this paragraph 3,
Executive receives any refund with respect to the Excise Tax, Executive shall
promptly pay the Company the amount of such refund within ten (10) days of
receipt by Executive.
4. Medical Benefits. If Executive's employment by the Company or any
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Affiliate or successor of the Company is terminated and Executive is entitled to
a Severance Amount pursuant to Section 1 above, then to the extent that
Executive or any of Executive's dependents may be covered under the terms of any
medical plans of the Company (or any Affiliate) for active employees immediately
prior to the Termination Date, the Company will provide Executive and those
dependents with equivalent coverages for the period of three (3) years from the
Termination Date. The coverages may be procured directly by the Company (or any
Affiliate, if appropriate) apart from, and outside of the terms of the plans
themselves; provided that Executive and Executive's dependents comply with all
of the conditions of the medical plans. In consideration for these benefits,
Executive must make contributions equal to those required from time to time from
employees for equivalent coverages under the medical plans.
5. Regulatory Suspension and Termination.
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(a) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Company's affairs by a notice
served under Section 8(e)(3) (12 U.S.C. (S) 1818(e)(3)) or 8(g) (12 U.S.C.
(S) 1818(g)) of the Federal Deposit Insurance Act, as amended, the
Company's obligations under this contract shall be suspended as of the date
of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Company may in its discretion (i) pay Executive
all or part of the amounts withheld while the contract obligations were
suspended and (ii) reinstate (in whole or in part) any of the obligations
which were suspended.
(b) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Company's affairs by an order issued
under Section 8(e) (12 U.S.C. (S) 1818(e)) or 8(g) (12 U.S.C. (S) 1818(g))
of the Federal Deposit Insurance Act, as amended, all obligations of the
Company under this contract shall terminate as of the effective date of the
order, but vested rights of the contracting parties shall not be affected.
(c) If the Company is in default as defined in Section 3(x) (12 U.S.C.
(S) 1813(x)(1)) of the Federal Deposit Insurance Act, as amended, all
obligations of the Company under this contract shall terminate as of the
date of default, but this paragraph shall not affect any vested rights of
the contracting parties.
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(d) All obligations of the Company under this contract shall be
terminated, except to the extent determined that continuation of the
contract is necessary for the continued operation of the institution by the
Federal Deposit Insurance Corporation (the "FDIC"), at the time the FDIC
enters into an agreement to provide assistance to or on behalf of the
Company under the authority contained in Section 13(c) (12 U.S.C. (S)
1823(c)) of the Federal Deposit Insurance Act, as amended, or when the
Company is determined by the FDIC to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not be
affected by such action.
(e) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with
Section 18(k) (12 U.S.C. (S)1828(k)) of the Federal Deposit Insurance Act,
as amended, and any regulations promulgated thereunder.
6. Notices. Notices and all other communications under this Agreement
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shall be in writing and shall be deemed given when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company to:
Kankakee Bancorp, Inc.
Attention: Chairman of the Board
000 Xxxxx Xxxxxxxx Xxxxxx
P. O. Xxx 0
Xxxxxxxx, Xxxxxxxx 00000-0000
If to Executive to:
[Name}
[Address]
[City and State]
or to such other address as either party may furnish to the other in writing,
except that notices of changes of address shall be effective only upon receipt.
7. Applicable Law. This Agreement is entered into under, and shall be
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governed for all purposes by, the laws of the state of Illinois.
8. Severability. If a court of competent jurisdiction determines that any
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provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement and all other provisions
shall remain in full force and effect.
9. Withholding of Taxes. The Company may withhold from any benefits
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payable under this Agreement all federal, state, city or other taxes as may be
required pursuant to any law, governmental regulation or ruling.
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10. Not an Employment Agreement. Nothing in this Agreement shall give
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Executive any rights (or impose any obligations) to continued employment by the
Company or any Affiliate or successor of the Company, nor shall it give the
Company any rights (or impose any obligations) for the continued performance of
duties by Executive for the Company or any Affiliate or successor of the
Company.
11. No Assignment. Executive's rights to receive payments or benefits under
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this Agreement shall not be assignable or transferable whether by pledge,
creation of a security interest or otherwise, other than a transfer by will or
by the laws of descent or distribution. In the event of any attempted assignment
or transfer contrary to this paragraph, the Company shall have no liability to
pay any amount so attempted to be assigned or transferred. This Agreement shall
inure to the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
12. Successors. This Agreement shall be binding upon and inure to the
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benefit of the Company, its successors and assigns (including, without
limitation, any company into or with which the Company may merge or
consolidate). The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets or the Bank's assets
unless either (a) the person or entity acquiring the assets, or a substantial
portion of the assets, shall expressly assume by an instrument in writing all
duties and obligations of the Company under this Agreement, or (b) the Company
shall provide, through the establishment of a separate reserve, for the payment
in full of all amounts which are or may reasonably be expected to become payable
to Executive under this Agreement.
13. Legal Fees. All reasonable legal fees and related expenses (including
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the costs of experts, evidence and counsel) paid or incurred by Executive
pursuant to any dispute relating to this Agreement shall be paid or reimbursed
by the Company if Executive is successful on the merits pursuant to a legal
judgment, arbitration or settlement.
14. Term. The term of this Agreement shall commence on the Effective Date
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and shall continue for a period of one (1) year. This Agreement shall
automatically extend for one (1) year on each anniversary of the Effective Date,
unless terminated by either party effective as of the last day of the then
current one (1) year extension by written notice to that effect delivered to the
other not fewer than ninety (90) days prior to the anniversary of the Effective
Date; provided, however, no termination of this Agreement shall be effective if
a Change of Control occurs within twelve (12) months of such termination. In the
event of a Change of Control during the term of this Agreement, this Agreement
shall remain in effect for the one (1) year period following the Change of
Control.
15. Entire Agreement Modifications. This Agreement constitutes the entire
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agreement between the parties respecting the subject matter hereof, and
supercedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. This Agreement may not be amended
or modified except by written agreement signed by Executive and the Company.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first written.
KANKAKEE BANCORP, INC. [EXECUTIVE NAME]
By: ______________________________________ _________________________________
Its:______________________________________
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