SYNERGY FEDERAL SAVINGS BANK
EMPLOYMENT AGREEMENT
This Agreement is made and entered into this 1st of January, 1999, by
and between SYNERGY FEDERAL SAVINGS BANK, a federally-chartered savings bank
(hereinafter referred to as the SAVINGS BANK), with principal offices located at
000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx, and XXXX X. XXXXX (hereinafter
referred to as "CEO"), currently residing at 000 Xxxx Xxxxx Xxxxx, Xxxxxxxxxx,
Xxx Xxxxxx, and shall be effective the first day of January, 1999.
1. TERM.
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The period of CEO's employment under this Agreement shall begin as of
the date first above written and shall continue for a period of thirty-six (36)
full calendar months thereafter. Commencing on the first anniversary date of
this Agreement, and continuing at each anniversary date thereafter, the
Agreement shall renew for an additional year such that the remaining term shall
be three (3) years unless written notice is provided to CEO at least ten (10)
days and not more than sixty (60) days prior to any such anniversary date, that
his employment shall cease at the end of thirty-six (36) months following such
anniversary date. Prior to each notice period for non-renewal, the Executive and
Compensation Committee (excluding the "CEO") of the Board of Directors ("Board")
of the Savings Bank will conduct a comprehensive performance evaluation and
review of the CEO for all purposes under this Agreement, including whether to
extend the Agreement, and the results thereof shall be included in the minutes
of the Board's meeting (the "Performance Review").
2. DUTIES AND RESPONSIBILITIES
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CEO shall perform the duties and responsibilities of Chief Executive
Officer in accordance with applicable federal or state laws and regulations and
the bylaws, rules and regulations of the Savings Bank and shall provide
executive management services for the Savings Bank. Subject to the direction and
approval of the Board of Directors of the Savings Bank, CEO shall formulate,
approve, supervise and direct the methods of keeping the records of the Savings
Bank, statistical or otherwise; shall prepare all such reports as are required
by law or regulation including, but not limited to, statements and reports for
the Board of Directors and the members of the Savings Bank; shall prepare the
annual budget; and shall, from time to time, and at any time upon request, make
reports to the Savings Bank's Board of Directors on the business affairs and
financial condition of the Savings Bank. This shall not be deemed to limit the
powers of the Board of Directors and/or the Audit Committee of the Savings Bank
to engage at any time public accountants to examine end report concerning the
accounts and financial affairs of the Savings Bank. CEO shall perform such other
duties and services as may be entrusted to him by the Savings Bank in accordance
with its bylaws and consistent with this office as Chief Executive Officer.
In addition, CEO shall perform those specific duties set forth in
Exhibit "A" attached hereto and made a part thereof entitled, Position
Description of Chief Executive Officers.
3. COMPENSATION
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3.1.1 Base Compensation: CEO shall be paid a base annual salary of One
Hundred and Sixty-five Thousand Dollars ($165,000.00) for the remainder of the
Agreement. The CEO will be paid in twenty-six (26) bi-weekly installments on the
Savings Bank's normal paydays for the duration of the Agreement.
3.1.2 In addition to the base salary, the Savings Bank agrees to
provide the CEO with an automobile and pay the monthly lease/loan payment
(calculated at 0% interest). The monthly lease/loan payments cannot exceed
$5,000.00 annually. The Savings Bank also agrees to pay, as long as the employee
is employed as CEO at the Savings Bank, the annual insurance premium, regular
maintenance on, and repairs of, the vehicle, reasonable charges for fuel and
oils, registration and titling fees.
Whether the CEO terminates this lease/loan upon scheduled termination
or if this lease/loan is terminated early in accordance with the terms of the
lease/loan agreement, the CEO will have the option to renegotiate the total
annual lease/loan allocation ($5,000.00 annually). Agreed upon changes made to
the lease/loan payment allocation will not change the terms of the Employee
Agreement as stated in Section 1.
3.1.3 The Performance Review defined in Section 1 above shall include a
determination whether the performance of the CEO met expectations or exceeded
expectations. In making this decision the Executive and Compensation Committee
shall consider, but not be limited to, an evaluation of the accomplishments of
the prior year's EIP goals and other measures of the CEO's managerial and
organizational performance. Based upon the results of the Performance Review,
the Executive and Compensation Committee may, in its sole discretion, increase
the base salary of the CEO between zero (0) and eight (8%) percent.
3.1.4. In addition to the foregoing, the Performance Review shall
include an evaluation of the operation of the Savings Bank to determine if
diversification activity significantly increased the size and complexity of the
Savings Bank. If so, the Executive and Compensation Committee, in its sole
discretion, may elect to increase the base salary to be paid to the CEO.
3.2 CEO Bonus: The Performance Review shall also provide the basis for
determining any CEO bonus. In the third year of this Agreement, the Performance
Review will also form the basis for negotiation of the renewal terms of this
Agreement. The Bank Administration Institute Executive Salary Survey, as well as
other appropriate sources, may be used as a comparative tool.
3.3 Executive Incentive Program: CEO shall be entitled to participate
in an annual Savings Bank Executive Management-Incentive Compensation Program
with a maximum CEO bonus rate of fifteen (15%) percent of total compensation
(base salary). Two-thirds of this bonus (up to 10% of base salary) shall be
based upon individual performance as determined by the Executive and
Compensation Committee as determined in the Performance Review. One-third of
this bonus (5% of base salary) shall be subject to the attainment of five
specific annual performance goals (1% of base salary for each goal). The goals
shall be the same as those governing similar incentives for other executive
employees of the Savings Bank. In addition, if all five annual performance goals
are achieved, CEO shall receive an added incentive based upon the final net
income as of December 31. For every $50,000 increase in net income over budget,
CEO shall receive an incentive bonus of three percent (3%) of base salary as of
December 31. The Executive Incentive Program bonus, if granted by the Executive
and Compensation Committee, shall be a lump sum payment to be made within thirty
(30) days of the end of each year of this Agreement. The Executive Incentive
Program payment shall not result in a permanent increase in the CEO's salary.
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4. OTHER ACTIVITIES
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CEO may serve, for compensation, as a lecturer, consultant to others
and may engage in other activities of a short duration which do not interfere
with his ability to perform his responsibilities under this Agreement. In all
such cases, CEO shall inform the Board of Directors of such activities in
advance. Otherwise, CEO during the term of the Agreement, shall not, except as
otherwise agreed to by the Board of Directors of the Savings Bank, work with,
accept or receive any compensation or consideration from any other organization,
firm, savings bank, person, corporation, or otherwise, for services to be
performed by CEO.
5. INSURANCE AND EMPLOYEE BENEFITS
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5.1 Employee Benefits Generally: CEO shall be entitled to the
employee benefit package currently available to all Savings
Bank employees. This benefit package includes:
Term Life Insurance
Long-Term and Short-Term Disability
Hospitalization, Medical and Dental Insurance
Retirement Plan
as set forth in the booklets previously issued. In addition, Savings Bank will
purchase for the benefit of CEO (i) supplemental disability coverage (including
long term convalescent care coverage) and (ii) supplemental life insurance
protection to provide CEO with the same level of coverage (as a percent of CEO's
compensation) as is provided to employees generally. The Savings Bank will be
responsible for CEO's share of benefits costs including dependent coverage.
5.2 Retiree Health Benefits: In addition to the benefits provided under
subparagraph 5.1 of this Section, CEO shall be entitled to continuing health
care coverage upon CEO's retirement from the Savings Bank for the remainder of
CEO's life. Prior to attainment of age sixty-five (65), CEO's coverage shall be
in substantially the same amount as provided to CEO prior to CEO's retirement.
After attainment of age sixty-five (65), Savings Bank shall provide a Medicare
supplement to CEO.
5.3 Memberships, Travel and Entertainment Expenses: The Bank shall
reimburse the CEO for his ordinary and necessary business expenses, including,
without limitation, fees for such civic clubs and organizations as the CEO and
the Board 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, upon presentation to the Bank of
an itemized account of such expenses in such form as the Bank may reasonably
require.
5.4 Professional Dues and Educational Expenses: CEO shall be expected
to and encouraged to continue his education in subject matters which may be
beneficial and advantageous to the current and future operation of the Savings
Bank. CEO shall be encouraged to participate in those organizations to which the
Savings Bank pays dues or fees, and which will benefit the Savings Bank in an
informational, communicative or educational manner.
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5.5 Spouses Expenses: The Board of Directors shall designate meetings
and activities which it deems necessary for the CEO's spouse to attend which are
in the best interest of the Savings Bank. Savings Bank will pay for out of town
expenses for these meetings.
5.6 Vacation and Leave: CEO shall be entitled to five (5) weeks of paid
vacation and all holidays designated by the Savings Bank for its employees. In
the event of termination of employment, CEO shall be paid for unused earned and
accrued vacation at the then-current rate of salary.
5.7 Tax Returns: The Savings Bank will, during the term of this
Agreement, reimburse the CEO for the reasonable expense related to the
preparation of CEO's federal and state tax returns. The CEO will arrange for
such service in a timely manner.
5.8 Medical Examination: Once annually during term of this Agreement,
CEO shall obtain a complete medical examination, the reasonable cost of which
will be paid by the Savings Bank. The Chairperson of the Savings Bank shall be
advised in writing by the physician of the continued fitness of CEO to perform
under this Agreement and such report shall be confidential.
5.9. Non-Qualified Deferred Compensation Plans: Within six (6) months
of execution of this Agreement, the Bank shall adopt for the benefit of CEO, a
Supplemental Executive Retirement Plan to supplement the benefits payable to CEO
at retirement from the Bank's tax-qualified plans, and a Phantom Stock and
Phantom Option Plan, pursuant to which CEO will be granted phantom stock and
phantom option awards.
6. NON-ASSIGNABILITY
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This is an Agreement for the personal services of CEO and his rights
hereunder shall not be assignable by him, provided, however, that in the event
of CEO's death while this Agreement is in effect, any salary of benefits due or
payable to him to date of death, along with payment for unused earned and
accrued vacation and leave days shall be payable to his estate.
7. EFFECT OF AGREEMENT
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This Agreement shall be binding upon the parties and their respective
heirs, executors, administrators, successors and assigns. CEO shall not assign
any part of CEO's rights under this Agreement without the written consent of
Savings Bank. In the event of a merger, transfer, consolidation, or
reorganization involving Savings Bank, this Agreement shall continue in force
and become an obligation of Savings Bank's successor.
8. TERMINATION
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This Agreement may be terminated prior to the expiration date provided
in Article 1 as follows:
8.1 The provisions of this Section shall in all respects be subject to
the terms and conditions stated in Sections 9 and 10.
8.1.1 The provisions of this Section shall apply upon the occurrence of
an Event of Termination (as herein defined) during the CEO's term of employment
under this Agreement. As used in this Agreement, an "Event of Termination" shall
mean and include any one or more of the following:
(i) the termination by the Savings Bank of CEO's full-time employment
hereunder for any reason
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other than (A) disability or retirement, (B) death, or (C) Termination for Cause
as defined in Section 8.3 hereof; or
(ii) CEO's resignation from the Savings Bank's employ, upon any
(A) failure to elect or reelect or to appoint or reappoint CEO
as Chief Executive Officer,
(B) material change in CEO's function, duties, or
responsibilities, which change would cause CEO's position to
become one of lesser responsibility, importance, or scope from
the position and attributes thereof described in Section 2,
above,
(C) a relocation of CEO's principal place of employment by
more than 30 miles from its location at the effective date of
this Agreement, or a material reduction in the benefits and
perquisites to the CEO from those being provided as of the
effective date of this Agreement,
(D) liquidation or dissolution of the Savings Bank or Company
other than liquidations or dissolutions that are caused by
reorganizations that do not affect the status of CEO, or
(E) breach of this Agreement by the Savings Bank.
Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D) or
(E), above, CEO shall have the right to elect to terminate his employment under
this Agreement by resignation upon sixty (60) days prior written notice given
within a reasonable period of time not to exceed four calendar months after the
initial event giving rise to said right to elect. Notwithstanding the preceding
sentence, in the event of a continuing breach of this Agreement by the Savings
Bank, the CEO, after giving due notice within the prescribed time frame of an
initial event specified above, shall not waive any of his rights solely under
this Agreement and this Section 8 by virtue of the fact that CEO has submitted
his resignation but has remained in the employment of the Savings Bank and is
engaged in good faith discussions to resolve any occurrence of an event
described in clauses (A), (B), (C), (D) and (E) above.
(iii) CEO's voluntary resignation from the Savings Bank's employ on the
effective date of, or at any time following a Change in Control during the term
of this Agreement. For these purposes, a "Change in Control" shall mean: (1)(i)
a reorganization, merger, merger conversion, consolidation or sale of all or
substantially all of the assets of the Savings Bank or a similar transaction in
which the Savings Bank is not the resulting entity; (ii) individuals who
constitute the board of directors of the Savings Bank as of the date hereof (the
"Incumbent Board"), cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-fourths of the
directors composing the Incumbent Board or whose nomination for election by the
Savings Bank's stockholders or members was approved by the nominating committee
serving under an Incumbent Board shall be for purposes of this section
considered as though he were a member of the Incumbent Board; or (iii) an
acquisition of "control" of the Savings Bank as defined by the Home Owners Loan
Act, as amended, and applicable rules and regulations promulgated thereunder as
in effect at the time of the Change in Control (collectively, the "HOLA"), or
(iv) an acquisition of the Savings Bank's stock requiring submission of notice
under the Change in Savings Bank Control Act; (2) In the event of the conversion
of the Savings Bank to stock form as the subsidiary of a stock holding company
("Stock Holding Company") to own 100% of the Savings Bank's stock at any time
subsequent to the effective date of this Agreement, a "Change in Control" shall
mean, a change in control of the Savings Bank or the Stock Holding Company of a
nature that: (i) would be required to be reported in response to Item 1(a) of
the current report on Form 8-K, as in effect on
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the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the
Savings Bank or the Stock Holding Company within the meaning of the HOLA; or
(iii) without limitation, such a change in control shall be deemed to have
occurred at such time as (a) any "person" (as such term is used in Section 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 Savings Bank or the Stock Holding Company representing 25% or more of the
Savings Bank's or Stock Holding Company's outstanding securities ordinarily
having the right to vote at the election of directors, except for any securities
of the Savings Bank issued to the Stock Holding Company in connection with the
Reorganization and Stock Offering pursuant to the Savings Bank's Plan of
Reorganization and Stock Issuance and securities purchased by the Savings Bank's
or the Stock Holding Company's employee stock benefit plans; or (b) the
Incumbent Board ceases for any reason to constitute at least a majority of the
board of directors of the Savings Bank or Stock Holding Company; or (c) a
reorganization, merger, consolidation, sale of all or substantially all of the
assets of the Savings Bank or the Stock Holding Company or similar transaction.
8.1.2 Payments Upon an Event of Termination.
(a) Upon the occurrence of an Event of Termination other than a Change
in Control, on the date of termination, the Savings Bank shall pay CEO, as
severance pay or liquidated damages, or both, a sum equal to the sum of (i) the
Base Salary from the date of termination through the remaining term of the
Agreement and (ii) the highest rate of bonus awarded to the CEO during the prior
three years. At the election of the CEO, which election is to be made on an
annual basis during the month of January, and which election is irrevocable for
the year in which made and upon the occurrence of an Event of Termination, any
payments shall be made in a lump sum or paid monthly during the remaining term
of this Agreement following the CEO's termination. In the event that no election
is made, payment to the CEO will be made on a monthly basis during the remaining
term of this Agreement. Such payments shall not be reduced in the event the CEO
obtains other employment following termination of employment.
(b) Upon the occurrence of an Event of Termination in connection with a
Change in Control, on the date of termination the Savings Bank shall pay CEO, as
severance pay or liquidated damages, or both, a sum equal to three (3) times the
sum of (i) Base Salary and (ii) the highest rate of bonus awarded to the CEO
during the prior three years. At the election of the CEO, which election is to
be made on an annual basis during the month of January, and which election is
irrevocable for the year in which made and upon the occurrence of an Event of
Termination, any payments shall be made in a lump sum or paid monthly during the
remaining term of this Agreement following the CEO's termination. In the event
that no election is made, payment to the CEO will be made on a monthly basis
during the remaining term of this Agreement. Such payments shall not be reduced
in the event the CEO obtains other employment following termination of
employment.
(c) Upon the occurrence of an Event of Termination, the Savings Bank
will cause to be continued, at the expense of the Savings Bank, life, medical,
dental, retiree health, and disability coverage substantially identical to the
coverage maintained by the Savings Bank for CEO prior to his termination. In
addition, the Savings Bank shall continue all other perquisites provided to CEO
pursuant to this Agreement. Such coverage and benefits shall continue from the
date of termination through the remaining term of this Agreement. The Savings
Bank shall also provide executive outplacement services to CEO for a period of
one year.
(d) Notwithstanding the preceding paragraphs of this Section 8, in
the event that:
(i) the aggregate payments or benefits to be made or afforded to
CEO under said
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paragraphs (the "Termination Benefits") would be deemed to
include an "excess parachute payment" under Section 280G of
the Code or any successor thereto, and
(ii) if such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is one dollar
($1.00) less than an amount equal to the total amount of
payments permissible under Section 280G of the Code or any
successor thereto, then the Termination Benefits to be paid
to CEO shall be so reduced so as to be a Non-Triggering
Amount.
8.1.3 Failure to Extend Agreement.
(a) In the event that the Savings Bank fails to renew the term of this
Agreement (see Paragraph 1 above), and upon the subsequent termination of CEO's
full-time employment hereunder by the Savings Bank for any reason other than
disability or retirement, death or Termination for Cause as defined in Section
8.3 hereof, the Savings Bank shall pay CEO, as severance pay or liquidated
damages, or both, a sum equal to the sum of (i) the Base Salary from the date of
termination through the remaining term of the Agreement and (ii) the highest
rate of bonus awarded to the CEO during the prior three years. At the election
of the CEO, which election is to be made on an annual basis during the month of
January, and which election is irrevocable for the year in which made and upon
the occurrence of an Event of Termination, any payments shall be made in a lump
sum or paid monthly during the remaining term of this Agreement following the
CEO's termination. In the event that no election is made, payment to the CEO
will be made on a monthly basis during the remaining term of this Agreement.
Such payments shall not be reduced in the event the CEO obtains other employment
following termination of employment. At the minimum, the Savings Bank shall pay
CEO not less than the Base Salary for the period of one year. In addition, the
provisions of Paragraphs 8.1.2 (c) and 8.1.2 (d) shall apply.
(b) In the event that the Savings Bank fails to renew the term of this
Agreement (see Paragraph 1 above), the notice period for CEO's voluntary
termination of this Agreement (see Paragraph 8.2.1) shall be reduced from one
hundred and twenty (120) days to sixty (60) days until such time as the Savings
Bank extends the Agreement to a remaining term of three years.
(c) In the event that the Savings Bank fails to renew the term of this
Agreement (see Paragraph 1 above), and upon the subsequent voluntary termination
of CEO's full-time employment by CEO, the Savings Bank shall pay to CEO a sum
equal to the Base Salary for a period of one year.
8.2 Resignation by CEO
8.2.1 Should CEO voluntarily decide to terminate his employment for any
reason other than as specifically set forth in Section 8.1, he will provide the
Savings Bank with no less than one hundred and twenty (120) days written notice,
as defined in Section 8.5.1, of the Date of Termination, as defined in Section
8.5.2. During such one hundred and twenty (120) day period, Executive shall
continue to receive the Base Compensation payable under Section 3.1.1, the
automobile allowance payable under Section 3.1.2, and shall be entitled to a
pro-rata share of any bonus payable under Section 3.1.3. In addition, CEO shall
be entitled to the Insurance and Employee Benefits payable for such period under
Section 5.
8.2.2 In the event that the CEO gives the Notice of Termination and
complies with the 120 day notice period set forth in Section 8.1.1 above, and,
at the Savings Bank's option, the Savings Bank
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decides on an earlier termination date, which does not comply with the 120 day
notice provision, then the CEO will be entitled to receive the payments to which
he becomes entitled under Section 8.2.1, through the Date of Termination, as
defined in Section 8.5.2.
8.3 Termination for Cause:
8.3.1 The Savings Bank's Board of Directors may terminate the officer
or employee's employment at any time, but any termination by the Savings Bank's
Board of Directors other than termination for cause, shall not prejudice the
officer or employee's right to compensation or other benefits under the
Agreement. The officer or employee shall have no right to receive compensation
or other benefits for any period after termination for cause. Termination for
cause shall include termination because of the officer or employee's personal
dishonesty, negligence, 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 the Agreement. In such event, CEO shall be given prior written
notice of the charges against him and an opportunity to respond in writing to
the charges before a final decision is made to terminate this Agreement.
8.4 Termination Due to Death:
8.4.1 No termination compensation will be paid in the event that CEO's
employment is terminated as a result of death.
8.5 Notice; Date of Termination:
8.5.1 Notice. Any purported termination by the Savings Bank or by CEO
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 CEO's employment under the
provision so indicated.
8.5.2 Date of Termination shall mean the date specified in the Notice
of Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).
8.5.3 If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, except upon the voluntary
termination by the CEO in which case the Date of Termination shall be the date
specified in the Notice (which shall conform to the requirements of this
Agreement), the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal having expired and no appeal having
been perfected) and provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, the
Savings Bank will continue to pay CEO his full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to, Base
Compensation) and continue CEO as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice of dispute was
given, until the dispute is finally resolved in accordance with this Agreement,
provided such dispute is
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resolved within the term of this Agreement. If such dispute is not resolved
within the term of the Agreement, the Savings Bank shall not be obligated, upon
final resolution of such dispute, to pay CEO compensation and other payments
accruing beyond the term of the Agreement. Amounts paid under this Section shall
be offset against or reduce any other amounts due under this Agreement.
9. SUSPENSION AND/OR REMOVAL:
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9.1 If the officer or employee is suspended and/or temporarily
prohibited from participating in the conduct of the Savings Bank's affairs by a
notice served under section 8(e)(3) or (9)(1) of [the] Federal Deposit Insurance
Act (12 U.S.C. 1818(e)(3) and (g)(1)) the Savings Bank's obligations under the
Agreement shall be suspended as of the date of service unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Savings
Bank may in its discretion (i) pay the officer or employee 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.
9.2 If the officer or employee is removed and/or permanently prohibited
from participating in the conduct of the Savings Bank's affairs by an order
issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12
X.X.X, 0000(x)(0) or (g)(1)), all obligations of the Savings Bank under the
Agreement shall terminate as of the effective date of the order, but vested
rights of the Agreeing parties shall not be affected.
10. TERMINATION OF ALL AGREEMENT OBLIGATIONS:
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10.1 If the Savings Bank is in default (as defined in section 3(x)(1)
of the Federal Deposit Insurance Act), all obligations under the Agreement shall
terminate as of the date of default, but this paragraph 10.1 need not be
included in an employment Agreement if prior written approval is secured from
the Director or his or her designee.
10.2 All obligations under the Agreement shall be terminated, except to
the extent determined that continuation of the contract is necessary for the
continued operation of the Savings Bank.
10.2.1 by the Director or his or her designee, at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the Savings Bank under the authority contained in section 13(c)
of the Federal Deposit Insurance Act; or
10.2.2 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 Savings Bank or when the Savings Bank is determined by the
Director to be in an unsafe or unsound condition. Any rights of the parties that
have already vested, however, shell not be affected by such action.
11. PAYMENTS.
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Any payments made to the employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12
U.S.C.ss.1828(k) and any regulations promulgated thereunder.
12. ENTIRE AGREEMENT:
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This Agreement constitutes the entire understanding of the parties
concerning CEO's compensation and may not be modified or amended without the
written consent of the parties.
13. ARBITRATION:
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Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the employee within
twenty-five (25) miles from the location of the Savings Bank, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction; provided,
however, that CEO shall be entitled to seek specific performance of his right to
be paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
14. PAYMENT OF LEGAL FEES:
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Reasonable legal fees paid or incurred by CEO pursuant to any dispute
or question of interpretation relating to this Agreement shall be paid or
reimbursed by the Savings Bank, provided that the dispute or interpretation has
been resolved in the CEO's favor.
15. INDEMNIFICATION:
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The Savings Bank shall provide CEO (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify CEO (and his
heirs, executors and administrators) to the fullest extent permitted under
federal 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 trustee, director or officer of the
Savings Bank (whether or not he continues to be a trustee, director or officer
at the time of incurring such expenses or liabilities), such expenses and
liabilities to 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 Savings Bank's Board). If such action, suit or proceeding is
brought against CEO in his capacity as an officer, trustee, or director of the
Savings Bank, however, such indemnification shall not extend to matters as to
which CEO is finally adjudged to be liable for willful misconduct in the
performance of his duties.
16. SUCCESSOR TO THE SAVINGS BANK:
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The Savings Bank shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Savings Bank or the Company,
expressly and unconditionally to assume and agree to perform the Savings Bank's
obligations under this Agreement, in the same manner and to the same extent that
the Savings Bank would be required to perform if no such succession or
assignment had taken place.
17. CONFIDENTIAL INFORMATION:
------------------------
During the term of this Agreement, and any extensions thereof, CEO will
have access to trade secrets, computer programs, processes, information
concerning the Savings Bank's members, marketing strategies, business plans,
audit information, regulatory relationships, as well as other confidential
information pertaining to the Savings Bank (collectively referred to as "the
Savings Bank's Confidential Information"). CEO shall not in any way, commercial
or otherwise, except to the extent required by the proper performance of his
duties and of this Agreement, disclose to any person, for any reason, at any
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time, any information relating to the Savings Bank's Confidential Information.
Information which is generally available to the public shall not be considered
the Savings Bank's Confidential Information. Further, upon the termination of
this Agreement, or any extension thereof, for any reason, CEO agrees to continue
to treat as private and privileged all such Savings Bank's Confidential
Information and will not disclose any such information for at least two (2)
years after the termination of this Agreement, except upon the direct written
authorization of the Chairman of the Board of the Savings Bank.
18. RESTRICTIVE COVENANT:
--------------------
CEO acknowledges that his services are special and of unique value to the
Savings Bank and therefore covenants and agrees that for a period of one (1)
year after termination of this Agreement, or any extensions, for any reason,
whether with or without cause, he will not be employed by a financial
institution, whose principal offices are located in Union County, New Jersey. As
a specific exception to the arbitration provision noted above, CEO acknowledges
that the Savings Bank shall be entitled to seek injunctive relief in court to
enforce the terms and provisions of this restrictive covenant. Nothing contained
in this restrictive covenant shall prevent the CEO from serving as a consultant
for the purpose of establishing a de novo financial institution provided the CEO
is an independent contractor and not an employee of the financial institution.
The parties hereto subscribe below:
ATTEST: SYNERGY FEDERAL SAVINGS BANK
----------------------------- ----------------------------------
Secretary Xxxxxxx X. Xxxxxx, Chairman
WITNESS: CEO:
----------------------------- ----------------------------------
Xxxx X. Xxxxx
Date: _________________, 1999
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