EMPLOYMENT AGREEMENT
This AGREEMENT, is made effective as of August 1, 1996, by and between
Bankers Federal Savings FSB ("Bank"), a corporation organized under the laws of
the United States, with its principal administrative office at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, and Xxxxxx X. Xxxxx ("Executive"). Any reference to
"Holding Company" herein shall mean BFS Bankorp, Inc., or any successor thereto,
which is the parent holding company of the Bank.
WHEREAS, the Bank wishes to assure itself of the continued services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Bank on a full-
time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the period of his employment hereunder, Executive agrees to serve as
Director, Senior Vice President and Chief Financial Officer of the Bank. During
said period, Executive also agrees to serve, if elected, as an officer of any
subsidiary or affiliate of the Bank, subject to the Bank agreeing to indemnify
Executive for his services in such capacity. Failure to re-appoint Executive as
Director, Senior Vice President and Chief Financial Officer of the Bank, without
the consent of the Executive, shall constitute an Event of Termination under
Section 4 of this Agreement, or, if applicable, a termination of employment for
purposes of Section 5 of this Agreement.
2. TERMS AND DUTIES.
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of twenty-four (24) full calendar months thereafter. Unless Notice
to the contrary (as provided below) is given to the Executive, each year as of
December 1 this Agreement shall automatically be extended, such that the
remaining term of the Agreement shall be twenty-four months. For purposes of
this Section 2, Notice means a written Notice to the Executive of the non-
extension of this Agreement. If Notice is given to the Executive, this Agreement
shall terminate at the end of twenty-four months following December 1 of the
year in which the Notice is given. The Board of Directors of the Bank ("Board")
will conduct a performance evaluation of the Executive, on at least an annual
basis and prior to every anniversary date, for purposes of determining whether
to extend the Agreement and give notice of renewal, and the results thereof
shall be included in the minutes of the Board's meeting and communicated to
Executive.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote substantially all his business time,
attention, skill, and efforts to the faithful performance of his duties
hereunder including activities and services related to the organization,
operation and management of the Bank and any subsidiary of the Bank; provided,
however, that, with the approval of the Board of Directors of the Bank
("Board"), as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors of, and
hold any other offices or positions in, companies or organizations, which, in
such Board's judgment, will not present any conflict of interest with the Bank,
or materially affect the performance of Executive's duties pursuant to this
Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b). The Bank
shall pay Executive as compensation a salary of not less than $___,000 per year
("Base Salary"). Such salary shall be payable no less frequently than bi-
monthly. During the period of this Agreement, Executive's salary shall be
reviewed at least annually; the first such review will be made no later than
December 1, 1996. Such review shall be conducted by a Committee designated by
the Board, and such Committee may increase (but not decrease) the Base Salary.
In addition to the salary provided in this Section 3(a), the Bank shall provide
Executive at no cost to Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Bank.
(b) The Bank will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Bank will not, without
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites which would adversely affect Executive's rights or benefits
thereunder, unless such change is applicable to all employees. Without limiting
the generality of the foregoing provisions of this Subsection (b), Executive
will be entitled to participate in or receive benefits under any employee
benefit plans including retirement plans, stock option plans, stock bonus plans,
pension plans, profit-sharing plans, health-and-accident plan, medical coverage
or any other employee benefit plan or arrangement made available by the Bank in
the future to its senior executives and key management employees, subject to and
on a basis consistent with the terms, conditions and overall administration of
such plans and arrangements. Executive will be entitled to incentive
compensation and bonuses as provided in any plan of the Bank in which Executive
is eligible to participate. Nothing paid to the Executive under any such plan
or arrangement will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.
(c) In addition to the salary provided for by paragraph (a) of this Section
3, the Bank shall pay or reimburse Executive for all reasonable travel and other
reasonable expenses incurred by Executive performing his obligations under this
Agreement and may provide such additional compensation in such form and such
amounts as the Board may from time to time determine.
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4. PAYMENTS TO EXECUTIVE UPON TERMINATION OF EMPLOYMENT.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. 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 Bank of Executive's full-time employment hereunder for any
reason other than following a Change in Control, as defined in Section 5(a)
hereof, or termination for Cause, as defined in Section 8 hereof, or termination
upon a resolution adopted by two-thirds of the Incumbent Board (as defined in
Section 5(a) hereof) in which the Chief Executive Officer of the Bank concurs;
(ii) Executive's resignation from the Bank's employ, upon any (A) failure to
elect or reelect or to appoint or reappoint Executive as Senior Vice President
and Chief Financial Officer, of the Bank, (B) material change in Executive's
function, duties, or responsibilities or scope from the position and attributes
thereof described in Section 1 above, to which Executive has not agreed in
writing (and any such material change shall be deemed a continuing breach of
this Agreement), (C) liquidation, dissolution, consolidation, or merger of the
Bank or the Holding Company in which the Bank or the Holding Company is not the
resulting entity, or transfer of all or substantially all of the assets of the
Bank or Holding Company in which the Bank or the Holding Company is not the
resulting entity, and to which Executive does not consent, or (D) a material
breach of this Agreement by the Bank. Upon the occurrence of any event
described in Section 4(ii) (A), (B), (C) or (D), above, Executive shall have the
right to elect to terminate his employment under this Agreement by resignation
upon not less than thirty (30) days' prior written notice given within a
reasonable period of time (not to exceed four calendar months) after the event
giving rise to said right to elect, which termination by Executive shall be an
Event of Termination.
(b) Upon the occurrence of an Event of Termination, the Bank shall pay
Executive, or, in the event of his subsequent death (subsequent to an Event of
Termination), his beneficiary or beneficiaries, or his estate, as the case may
be, as severance pay or liquidated damages, or both, an amount equal to two
times the sum of: (i) the highest annual rate of Base Salary paid to Executive
at any time under this Agreement, and (ii) the greater of (x) the average annual
cash bonus paid to Executive with respect to the three completed fiscal years
prior to the Event of Termination, or (y) the cash bonus paid to Executive with
respect to the fiscal year ended prior to the Event of Termination. At the
election of the Executive pursuant to Section 4(d), such payments shall be made
in a lump sum or paid in equal monthly amounts during the period over which
payments are to be made, following the Executive's termination.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to
be continued life, health and disability insurance coverage substantially
identical to the coverage maintained by the Bank for Executive prior to his
termination. Such coverage shall cease upon the earlier of Executive's
employment by another employer (which employer offers substantially similar
life, health and disability insurance coverage as provided to Executive prior to
the Event of Termination) or twenty-four (24) months following such termination.
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(d) During the term of this Agreement Executive may make an election, on an
annual basis in January of each year, as to whether the cash benefits due
Executive under this Agreement shall be paid to Executive in a lump sum or in
equal monthly payment over a period of twenty-four (24) months. Executive's
election as to the distribution of benefits shall be made on a form provided by
the Employer. Such election shall be irrevocable for the year for which such
election is made and upon the occurrence of an Event of Termination. In the
event of Executive's termination prior to the making of an election pursuant to
this subsection 4(d), the Employer, at its discretion, shall determine whether
the payments shall be made to the Executive in a lump sum or in equal monthly
payments.
5. CHANGE OF CONTROL.
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Bank or Holding Company, as set forth
below. For purposes of this Agreement, a "Change in Control" of the Bank or
Holding Company shall mean an event, which occurs subsequent to the date of this
Agreement, of a nature that: (i) would be required to be reported by the Holding
Company in response to Item 1(a) of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a change in control of the
Bank or the Holding Company within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency) thereunder; or (iii) without limitation,
such a Change in Control shall be deemed to have occurred at such time as (a)
any "person" (as that term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of securities representing 20% or
more of a class of securities of the Bank or Holding Company ordinarily having
the right to vote at the election of directors ("Voting Securities"), except for
any securities of the Bank purchased by the Holding Company in connection with
the conversion of the Bank to the stock form and any securities purchased by the
Bank's employee stock ownership plan and trust established with the approval of
the Incumbent Board (as defined below), and except that an investment advisor
shall not be deemed to acquire the voting stock of its advisee if the advisor
votes the stock only upon instruction from the beneficial owner, and does not
provide the beneficial owner with advice concerning the voting of such stock; or
(b) individuals who constitute the Board on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board, or whose nomination for election by the Holding
Company's shareholders was approved by the same Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (b), considered
as though he were a member of the Incumbent Board; or (c) a merger,
consolidation or sale of all or substantially all the assets of the Bank or the
Holding Company occurs unless such merger or consolidation or sale of assets
shall have been affirmatively recommended to the Holding Company's stockholders
by a majority of the Incumbent Board; or (d) a proxy statement soliciting
proxies from stockholders of the Holding Company, by someone other than the
current management of the Holding Company, seeking stockholder approval of a
Plan of Reorganization, merger or consolidation of the Holding
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Company or Bank with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the Plan are
exchanged for or converted into cash or property or securities not issued by the
Bank or the Holding Company shall be distributed, unless the reorganization,
merger or consolidation shall have been affirmatively recommended to the Holding
Company's stockholders by a majority of the members of the Incumbent Board; or
(e) a tender offer is made for 20% or more of the voting securities of the Bank
or Holding Company. Notwithstanding the foregoing provisions of Section 5(a), as
to any acquisition of shares of Voting Securities by BFS Xxxxx, Inc., Xxxxx
Investors L.P., Xxxxxxx X. Xxxxx or any person or entity affiliated with such
person or entities, under their direct or indirect control, or acting on their
behalf or in concert with them (collectively referred to as "Xxxxx"), a Change
in Control shall not be deemed to have occurred unless Xxxxx shall have acquired
more than seventy-five percent (75%) of a class of Voting Securities.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control shall have occurred or the Board has determined that a Change
in Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d) and (e) of this Section 5 upon his subsequent termination of
employment by the Bank any time during the term of this Agreement, unless such
termination is (A) because of his death or Retirement, or, (B) for Cause or
Disability. A termination of Executive's employment by the Holding Company
following a Change in Control shall be deemed to have occurred upon any material
change in Executive's function, duties, title, or responsibilities or scope from
the position and attributes thereof described in Section 1 above, or upon any
reduction in Executive's Base Salary, to which Executive has not agreed in
writing.
(c) Upon the occurrence of a Change in Control followed by the termination
of Executive's employment by the Bank (including a termination referred to in
the last sentence of Section 5(b) above), the Bank shall pay Executive, or, in
the event of his subsequent death (subsequent to an Event of Termination), his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, an amount equal to two times the sum of: (i)
the highest annual rate of Base Salary paid to Executive at any time under this
Agreement, and (ii) the greater of (x) the average annual cash bonus paid to
Executive with respect to the three completed fiscal years prior to the Event of
Termination, or (y) the cash bonus paid to Executive with respect to the fiscal
year ended prior to the Event of Termination. Upon a Change in Control, and
whether or not the Bank terminates Executive's employment (including a
termination referred to in the last sentence of Section 5(b) above), Executive
shall have the right to elect to terminate his employment with the Bank (during
the term of this Agreement), and the Bank shall pay Executive, or, in the event
of his subsequent death (subsequent to such termination), his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, an amount equal to one times the highest annual rate of Base
Salary paid to Executive at any time under this Agreement. At the election of
the Executive pursuant to Section 4(d), such payment may be made in a lump sum
or paid monthly during the twelve (12) months following the Executive's
termination.
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(d) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment (including a termination referred to in the last
sentence of Section 5(b) above), the Bank will cause to be continued life,
health and disability insurance coverage substantially identical to the coverage
maintained by the Bank for Executive prior to his severance. Such coverage
shall cease upon the earlier of Executive's employment by another employer
(which employer offers substantially similar life, health and disability
insurance coverage as provided to Executive prior to the termination) or twenty-
four (24) months following such termination.
6. TERMINATION FOR DISABILITY.
Termination by the Bank of Executive's employment based on "Disability"
shall mean termination because of any physical or mental impairment which
qualifies Executive for disability benefits under the applicable long-term
disability plan maintained by the Bank or, if no such plan applies, which would
qualify Executive for disability benefits under the federal social security
system. In the event Executive is unable to perform his duties under this
Agreement on a full-time basis for a period of six (6) consecutive months by
reason of Disability, the Bank may terminate this Agreement, provided that the
Bank shall continue to be obligated to pay Executive his Base Salary, including
bonuses and any other cash compensation paid to Executive during such period for
the remaining term of this Agreement, or one (1) year, whichever is the longer
period of time, and provided further that any amounts actually paid to Executive
pursuant to any disability insurance or other similar such program which the
Bank has provided or may provide on behalf of its employees or pursuant to any
xxxxxxx'x or social security disability program shall reduce the compensation to
be paid to Executive pursuant to this paragraph.
7. TERMINATION UPON RETIREMENT.
Termination by the Bank of the Executive based on "Retirement" shall mean
retirement at normal retirement age in accordance with the Bank's qualified
retirement plan, or in accordance with any retirement arrangement established
with Executive's consent with respect to him. Upon termination of Executive
upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Bank or other plans to which Executive is a party.
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8. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any 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. In determining incompetence, the
acts or omissions shall be measured against standards generally prevailing in
the savings institutions industry. Executive shall be deemed to have been
terminated for Cause when there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than two-thirds of
the members of the Board (for purposes of determining the number of directors
and whether there has been a vote of two-thirds of the Board, members designated
to serve as directors by a stockholder (or group of stockholders) who own more
than 25% of the shares of Common Stock of the Bank or Holding Company shall be
excluded) at a meeting of the Board called and held for that purpose (after
reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying termination for Cause
and specifying the particulars thereof in detail. The Executive shall not have
the right to receive compensation or other benefits for any period after receipt
of Notice of Termination for Cause.
9. NOTICE.
Any purported termination by the Bank or by Executive shall be communicated
by Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated. "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the Notice
of Termination. Upon notice of termination for Cause, which termination is
disputed by Executive in writing, the parties shall promptly proceed to
arbitration of the dispute in accordance with Section 21 of this Agreement. If
it shall be subsequently determined in arbitration that grounds for Termination
for Cause did not exist, Executive shall be entitled to the payments to
specified in Sections 4 or 5, as applicable, hereof.
10. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 10 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
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(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank as may reasonably be required by the Bank in connection
with any litigation in which it or any of its subsidiaries or affiliates is, or
may become, a party. Executive shall be reimbursed for his reasonable expenses,
including attorney fees, incurred hereunder.
11. NON-COMPETITION.
Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Bank and affiliates thereof,
as it may exist from time to time, is a valuable, special and unique asset of
the business of the Bank. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or considered
business activities of the Bank or affiliates thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever (except for
such disclosure as may be required to be provided to the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation, or other federal banking
agency with jurisdiction over the Bank or Executive) Notwithstanding the
foregoing, Executive may disclose any knowledge of banking, financial and/or
economic principles, concepts or ideas which are not solely and exclusively
derived from the business plans and activities of the Bank. In the event of a
breach or threatened breach by the Executive of the provisions of this Section
11, the Bank will be entitled to an injunction restraining Executive from
disclosing, in whole or in part, the knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof, or from
rendering any services to any person, firm, corporation, other entity to whom
such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed, provided Executive has been informed by the Bank of its views that a
breach is occurring or about to occur, and such breach is not cured by Executive
within ten (10) days of such Notice. Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies available to the Bank for
such breach or threatened breach, including the recovery of damages from
Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be paid in cash or check from
the general funds of the Bank, as the case may be, and no special or separate
fund shall be established and no other segregation of assets shall be made to
assure payment.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided. No provision of this Agreement shall be interpreted
to mean that Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.
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14. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
15. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future of as to any act other than that
specifically waived.
16. REQUIRED PROVISIONS.
(a) The Bank may terminate the Executive's employment at any time, but any
termination by the Bank, other than termination for Cause, shall not prejudice
Executive's right to compensation or other benefits under this Agreement.
Executive shall not have the right to receive compensation or other benefits for
any period after termination for Cause as defined in Section 8 hereinabove.
(b) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 USC 1818(e)(3)) or 8(g) (12 USC 1818(g)) of the Federal
Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, the Bank'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 Bank may in its discretion (i)
pay the Executive all or part of the compensation withheld while their contract
obligations were suspended and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.
(c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 USC (S)1818(e)) or
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8(g) (12 USC (S)1818(g)) of the Federal Deposit Insurance Act, as amended by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, all
obligations of the Bank under this contract shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.
(d) If the Bank is in default as defined in Section 3(x) (12 USC
1813(x)(1)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Bank under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Bank 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, (i) by the Director or his or
her designee, at the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) (12 USC
(S)1823(c)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1982; or (ii) by the
Director or his or her designee at the time the Director or his or her designee
approves a supervisory merger to resolve problems related to the operations of
the Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 USC
Section 1828(k) and any regulations promulgated thereunder.
(g) The required provisions in this Section 16 were inserted pursuant to
existing applicable federal regulations. Any future regulatory changes which
amend or repeal the required provisions in a manner favorable to Executive shall
be automatically incorporated into this Section 16 upon the effective date of
such regulatory change. The term "Director" has the meaning ascribed to it in
the OTS Regulations.
17. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
18. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
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19. GOVERNING LAW.
This Agreement has been executed and delivered in the State of New York,
and its validity, interpretation, performance, and enforcement shall be governed
by the laws of said State but only to the extent not superseded by federal law.
20. PAYMENT OF LEGAL FEES.
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank, if a judgement, settlement, or award in arbitration,
is entered in favor of Executive.
21. ARBITRATION OF DISPUTES
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in New York City in
accordance with the rules of the American Arbitration Association. Judgment may
be entered on the arbitrator's awarded in any court having jurisdiction.
22. INDEMNIFICATION.
The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at their expense, and shall indemnify Executive (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 director or officer of the Bank or
any of its subsidiaries (whether or not he continues to be a director or officer
at the time of incurring such expenses or liabilities), such expenses and
liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements, such settlements to be
approved by the Board of Directors of the Bank, if such action is brought
against Executive in his capacity as an officer or director of the Bank or any
of its subsidiaries.
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SIGNATURES
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and
its seal to be affixed hereunto by its officers thereunto duly authorized, and
Executive has signed this Agreement, all as of the day and year set forth below.
BANKERS FEDERAL SAVINGS FSB
BY:
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
Chairman of the Board
EXECUTIVE
/s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
EMPLOYMENT AGREEMENT
This AGREEMENT, is made effective as of August 1, 1996, by and between
Bankers Federal Savings FSB ("Bank"), a corporation organized under the laws of
the United States, with its principal administrative office at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, and Xxxxxx Xxxxxxxxxx ("Executive"). Any reference
to "Holding Company" herein shall mean BFS Bankorp, Inc., or any successor
thereto, which is the parent holding company of the Bank.
WHEREAS, the Bank wishes to assure itself of the continued services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Bank on a full-
time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the period of his employment hereunder, Executive agrees to serve as
Executive Vice President and Chief Lending Officer of the Bank. During said
period, Executive also agrees to serve, if elected, as an officer of any
subsidiary or affiliate of the Bank, subject to the Bank agreeing to indemnify
Executive for his services in such capacity. Failure to re-appoint Executive as
Executive Vice President and Chief Lending Officer, without the consent of the
Executive, shall constitute an Event of Termination under Section 4 of this
Agreement, or, if applicable, a termination of employment for purposes of
Section 5 of this Agreement.
2. TERMS AND DUTIES.
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of twenty-four (24) full calendar months thereafter. Unless Notice
to the contrary (as provided below) is given to the Executive, each year as of
December 1 this Agreement shall automatically be extended, such that the
remaining term of the Agreement shall be twenty-four months. For purposes of
this Section 2, Notice means a written Notice to the Executive of the non-
extension of this Agreement. If Notice is given to the Executive, this Agreement
shall terminate at the end of twenty-four months following December 1 of the
year in which the Notice is given. The Board of Directors of the Bank ("Board")
will conduct a performance evaluation of the Executive, on at least an annual
basis and prior to every anniversary date, for purposes of determining whether
to extend the Agreement and give notice of renewal, and the results thereof
shall be included in the minutes of the Board's meeting and communicated to
Executive.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote substantially all his business time,
attention, skill, and efforts to the faithful performance of his duties
hereunder including activities and services related to the organization,
operation and management of the Bank and any subsidiary of the Bank; provided,
however, that, with the approval of the Board of Directors of the Bank
("Board"), as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors of, and
hold any other offices or positions in, companies or organizations, which, in
such Board's judgment, will not present any conflict of interest with the Bank,
or materially affect the performance of Executive's duties pursuant to this
Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b). The Bank
shall pay Executive as compensation a salary of not less than $___,000 per year
("Base Salary"). Such salary shall be payable no less frequently than bi-
monthly. During the period of this Agreement, Executive's salary shall be
reviewed at least annually; the first such review will be made no later than
December 1, 1996. Such review shall be conducted by a Committee designated by
the Board, and such Committee may increase (but not decrease) the Base Salary.
In addition to the salary provided in this Section 3(a), the Bank shall provide
Executive at no cost to Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Bank.
(b) The Bank will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Bank will not, without
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites which would adversely affect Executive's rights or benefits
thereunder, unless such change is applicable to all employees. Without limiting
the generality of the foregoing provisions of this Subsection (b), Executive
will be entitled to participate in or receive benefits under any employee
benefit plans including retirement plans, stock option plans, stock bonus plans,
pension plans, profit-sharing plans, health-and-accident plan, medical coverage
or any other employee benefit plan or arrangement made available by the Bank in
the future to its senior executives and key management employees, subject to and
on a basis consistent with the terms, conditions and overall administration of
such plans and arrangements. Executive will be entitled to incentive
compensation and bonuses as provided in any plan of the Bank in which Executive
is eligible to participate. Nothing paid to the Executive under any such plan
or arrangement will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.
(c) In addition to the salary provided for by paragraph (a) of this Section
3, the Bank shall pay or reimburse Executive for all reasonable travel and other
reasonable expenses incurred by Executive performing his obligations under this
Agreement and may provide such additional compensation in such form and such
amounts as the Board may from time to time determine.
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4. PAYMENTS TO EXECUTIVE UPON TERMINATION OF EMPLOYMENT.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. 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 Bank of Executive's full-time employment hereunder for any
reason other than following a Change in Control, as defined in Section 5(a)
hereof, or termination for Cause, as defined in Section 8 hereof, or termination
upon a resolution adopted by two-thirds of the Incumbent Board (as defined in
Section 5(a) hereof) in which the Chief Executive Officer of the Bank concurs;
(ii) Executive's resignation from the Bank's employ, upon any (A) failure to
elect or reelect or to appoint or reappoint Executive as Executive Vice
President and Chief Lending Officer, of the Bank, (B) material change in
Executive's function, duties, or responsibilities or scope from the position and
attributes thereof described in Section 1 above, to which Executive has not
agreed in writing (and any such material change shall be deemed a continuing
breach of this Agreement), (C) liquidation, dissolution, consolidation, or
merger of the Bank or the Holding Company in which the Bank or the Holding
Company is not the resulting entity, or transfer of all or substantially all of
the assets of the Bank or Holding Company in which the Bank or the Holding
Company is not the resulting entity, and to which Executive does not consent, or
(D) a material breach of this Agreement by the Bank. Upon the occurrence of any
event described in Section 4(ii) (A), (B), (C) or (D), above, Executive shall
have the right to elect to terminate his employment under this Agreement by
resignation upon not less than thirty (30) days' prior written notice given
within a reasonable period of time (not to exceed four calendar months) after
the event giving rise to said right to elect, which termination by Executive
shall be an Event of Termination.
(b) Upon the occurrence of an Event of Termination, the Bank shall pay
Executive, or, in the event of his subsequent death (subsequent to an Event of
Termination), his beneficiary or beneficiaries, or his estate, as the case may
be, as severance pay or liquidated damages, or both, an amount equal to two
times the sum of: (i) the highest annual rate of Base Salary paid to Executive
at any time under this Agreement, and (ii) the greater of (x) the average annual
cash bonus paid to Executive with respect to the three completed fiscal years
prior to the Event of Termination, or (y) the cash bonus paid to Executive with
respect to the fiscal year ended prior to the Event of Termination. At the
election of the Executive pursuant to Section 4(d), such payments shall be made
in a lump sum or paid in equal monthly amounts during the period over which
payments are to be made, following the Executive's termination.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to
be continued life, health and disability insurance coverage substantially
identical to the coverage maintained by the Bank for Executive prior to his
termination. Such coverage shall cease upon the earlier of Executive's
employment by another employer (which employer offers substantially similar
life, health and disability insurance coverage as provided to Executive prior to
the Event of Termination) or twenty-four (24) months following such termination.
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(d) During the term of this Agreement Executive may make an election, on an
annual basis in January of each year, as to whether the cash benefits due
Executive under this Agreement shall be paid to Executive in a lump sum or in
equal monthly payment over a period of twenty-four (24) months. Executive's
election as to the distribution of benefits shall be made on a form provided by
the Employer. Such election shall be irrevocable for the year for which such
election is made and upon the occurrence of an Event of Termination. In the
event of Executive's termination prior to the making of an election pursuant to
this subsection 4(d), the Employer, at its discretion, shall determine whether
the payments shall be made to the Executive in a lump sum or in equal monthly
payments.
5. CHANGE OF CONTROL.
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Bank or Holding Company, as set forth
below. For purposes of this Agreement, a "Change in Control" of the Bank or
Holding Company shall mean an event, which occurs subsequent to the date of this
Agreement, of a nature that: (i) would be required to be reported by the Holding
Company in response to Item 1(a) of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a change in control of the
Bank or the Holding Company within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency) thereunder; or (iii) without limitation,
such a Change in Control shall be deemed to have occurred at such time as (a)
any "person" (as that term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of securities representing 20% or
more of a class of securities of the Bank or Holding Company ordinarily having
the right to vote at the election of directors ("Voting Securities"), except for
any securities of the Bank purchased by the Holding Company in connection with
the conversion of the Bank to the stock form and any securities purchased by the
Bank's employee stock ownership plan and trust established with the approval of
the Incumbent Board (as defined below), and except that an investment advisor
shall not be deemed to acquire the voting stock of its advisee if the advisor
votes the stock only upon instruction from the beneficial owner, and does not
provide the beneficial owner with advice concerning the voting of such stock; or
(b) individuals who constitute the Board on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board, or whose nomination for election by the Holding
Company's shareholders was approved by the same Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (b), considered
as though he were a member of the Incumbent Board; or (c) a merger,
consolidation or sale of all or substantially all the assets of the Bank or the
Holding Company occurs unless such merger or consolidation or sale of assets
shall have been affirmatively recommended to the Holding Company's stockholders
by a majority of the Incumbent Board; or (d) a proxy statement soliciting
proxies from stockholders of the Holding Company, by someone other than the
current management of the Holding Company, seeking stockholder approval of a
Plan of Reorganization, merger or consolidation of the Holding
-4-
Company or Bank with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the Plan are
exchanged for or converted into cash or property or securities not issued by the
Bank or the Holding Company shall be distributed, unless the reorganization,
merger or consolidation shall have been affirmatively recommended to the Holding
Company's stockholders by a majority of the members of the Incumbent Board; or
(e) a tender offer is made for 20% or more of the voting securities of the Bank
or Holding Company. Notwithstanding the foregoing provisions of Section 5(a), as
to any acquisition of shares of Voting Securities by BFS Xxxxx, Inc., Xxxxx
Investors L.P., Xxxxxxx X. Xxxxx or any person or entity affiliated with such
person or entities, under their direct or indirect control, or acting on their
behalf or in concert with them (collectively referred to as "Xxxxx"), a Change
in Control shall not be deemed to have occurred unless Xxxxx shall have acquired
more than seventy-five percent (75%) of a class of Voting Securities.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control shall have occurred or the Board has determined that a Change
in Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d) and (e) of this Section 5 upon his subsequent termination of
employment by the Bank any time during the term of this Agreement, unless such
termination is (A) because of his death or Retirement, or, (B) for Cause or
Disability. A termination of Executive's employment by the Holding Company
following a Change in Control shall be deemed to have occurred upon any material
change in Executive's function, duties, title, or responsibilities or scope from
the position and attributes thereof described in Section 1 above, or upon any
reduction in Executive's Base Salary, to which Executive has not agreed in
writing.
(c) Upon the occurrence of a Change in Control followed by the termination
of Executive's employment by the Bank (including a termination referred to in
the last sentence of Section 5(b) above), the Bank shall pay Executive, or, in
the event of his subsequent death (subsequent to an Event of Termination), his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, an amount equal to two times the sum of: (i)
the highest annual rate of Base Salary paid to Executive at any time under this
Agreement, and (ii) the greater of (x) the average annual cash bonus paid to
Executive with respect to the three completed fiscal years prior to the Event of
Termination, or (y) the cash bonus paid to Executive with respect to the fiscal
year ended prior to the Event of Termination. Upon a Change in Control, and
whether or not the Bank terminates Executive's employment (including a
termination referred to in the last sentence of Section 5(b) above), Executive
shall have the right to elect to terminate his employment with the Bank (during
the term of this Agreement), and the Bank shall pay Executive, or, in the event
of his subsequent death (subsequent to such termination), his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, an amount equal to one times the highest annual rate of Base
Salary paid to Executive at any time under this Agreement. At the election of
the Executive pursuant to Section 4(d), such payment may be made in a lump sum
or paid monthly during the twelve (12) months following the Executive's
termination.
-5-
(d) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment (including a termination referred to in the last
sentence of Section 5(b) above), the Bank will cause to be continued life,
health and disability insurance coverage substantially identical to the coverage
maintained by the Bank for Executive prior to his severance. Such coverage
shall cease upon the earlier of Executive's employment by another employer
(which employer offers substantially similar life, health and disability
insurance coverage as provided to Executive prior to the termination) or twenty-
four (24) months following such termination.
6. TERMINATION FOR DISABILITY.
Termination by the Bank of Executive's employment based on "Disability"
shall mean termination because of any physical or mental impairment which
qualifies Executive for disability benefits under the applicable long-term
disability plan maintained by the Bank or, if no such plan applies, which would
qualify Executive for disability benefits under the federal social security
system. In the event Executive is unable to perform his duties under this
Agreement on a full-time basis for a period of six (6) consecutive months by
reason of Disability, the Bank may terminate this Agreement, provided that the
Bank shall continue to be obligated to pay Executive his Base Salary, including
bonuses and any other cash compensation paid to Executive during such period for
the remaining term of this Agreement, or one (1) year, whichever is the longer
period of time, and provided further that any amounts actually paid to Executive
pursuant to any disability insurance or other similar such program which the
Bank has provided or may provide on behalf of its employees or pursuant to any
xxxxxxx'x or social security disability program shall reduce the compensation to
be paid to Executive pursuant to this paragraph.
7. TERMINATION UPON RETIREMENT.
Termination by the Bank of the Executive based on "Retirement" shall mean
retirement at normal retirement age in accordance with the Bank's qualified
retirement plan, or in accordance with any retirement arrangement established
with Executive's consent with respect to him. Upon termination of Executive
upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Bank or other plans to which Executive is a party.
-6-
8. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any 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. In determining incompetence, the
acts or omissions shall be measured against standards generally prevailing in
the savings institutions industry. Executive shall be deemed to have been
terminated for Cause when there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than two-thirds of
the members of the Board (for purposes of determining the number of directors
and whether there has been a vote of two-thirds of the Board, members designated
to serve as directors by a stockholder (or group of stockholders) who own more
than 25% of the shares of Common Stock of the Bank or Holding Company shall be
excluded) at a meeting of the Board called and held for that purpose (after
reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying termination for Cause
and specifying the particulars thereof in detail. The Executive shall not have
the right to receive compensation or other benefits for any period after receipt
of Notice of Termination for Cause.
9. NOTICE.
Any purported termination by the Bank or by Executive shall be communicated
by Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated. "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the Notice
of Termination. Upon notice of termination for Cause, which termination is
disputed by Executive in writing, the parties shall promptly proceed to
arbitration of the dispute in accordance with Section 21 of this Agreement. If
it shall be subsequently determined in arbitration that grounds for Termination
for Cause did not exist, Executive shall be entitled to the payments to
specified in Sections 4 or 5, as applicable, hereof.
10. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 10 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
-7-
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank as may reasonably be required by the Bank in connection
with any litigation in which it or any of its subsidiaries or affiliates is, or
may become, a party. Executive shall be reimbursed for his reasonable expenses,
including attorney fees, incurred hereunder.
11. NON-COMPETITION.
Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Bank and affiliates thereof,
as it may exist from time to time, is a valuable, special and unique asset of
the business of the Bank. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or considered
business activities of the Bank or affiliates thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever (except for
such disclosure as may be required to be provided to the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation, or other federal banking
agency with jurisdiction over the Bank or Executive) Notwithstanding the
foregoing, Executive may disclose any knowledge of banking, financial and/or
economic principles, concepts or ideas which are not solely and exclusively
derived from the business plans and activities of the Bank. In the event of a
breach or threatened breach by the Executive of the provisions of this Section
11, the Bank will be entitled to an injunction restraining Executive from
disclosing, in whole or in part, the knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof, or from
rendering any services to any person, firm, corporation, other entity to whom
such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed, provided Executive has been informed by the Bank of its views that a
breach is occurring or about to occur, and such breach is not cured by Executive
within ten (10) days of such Notice. Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies available to the Bank for
such breach or threatened breach, including the recovery of damages from
Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be paid in cash or check from
the general funds of the Bank, as the case may be, and no special or separate
fund shall be established and no other segregation of assets shall be made to
assure payment.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided. No provision of this Agreement shall be interpreted
to mean that Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.
-8-
14. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
15. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future of as to any act other than that
specifically waived.
16. REQUIRED PROVISIONS.
(a) The Bank may terminate the Executive's employment at any time, but any
termination by the Bank, other than termination for Cause, shall not prejudice
Executive's right to compensation or other benefits under this Agreement.
Executive shall not have the right to receive compensation or other benefits for
any period after termination for Cause as defined in Section 8 hereinabove.
(b) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 USC 1818(e)(3)) or 8(g) (12 USC 1818(g)) of the Federal
Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, the Bank'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 Bank may in its discretion (i)
pay the Executive all or part of the compensation withheld while their contract
obligations were suspended and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.
(c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 USC (S)1818(e)) or
-9-
8(g) (12 USC (S)1818(g)) of the Federal Deposit Insurance Act, as amended by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, all
obligations of the Bank under this contract shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.
(d) If the Bank is in default as defined in Section 3(x) (12 USC
1813(x)(1)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Bank under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Bank 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, (i) by the Director or his or
her designee, at the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) (12 USC
(S)1823(c)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1982; or (ii) by the
Director or his or her designee at the time the Director or his or her designee
approves a supervisory merger to resolve problems related to the operations of
the Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 USC
Section 1828(k) and any regulations promulgated thereunder.
(g) The required provisions in this Section 16 were inserted pursuant to
existing applicable federal regulations. Any future regulatory changes which
amend or repeal the required provisions in a manner favorable to Executive shall
be automatically incorporated into this Section 16 upon the effective date of
such regulatory change. The term "Director" has the meaning ascribed to it in
the OTS Regulations.
17. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
18. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
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19. GOVERNING LAW.
This Agreement has been executed and delivered in the State of New York,
and its validity, interpretation, performance, and enforcement shall be governed
by the laws of said State but only to the extent not superseded by federal law.
20. PAYMENT OF LEGAL FEES.
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank, if a judgement, settlement, or award in arbitration,
is entered in favor of Executive.
21. ARBITRATION OF DISPUTES
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in New York City in
accordance with the rules of the American Arbitration Association. Judgment may
be entered on the arbitrator's awarded in any court having jurisdiction.
22. INDEMNIFICATION.
The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at their expense, and shall indemnify Executive (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 director or officer of the Bank or
any of its subsidiaries (whether or not he continues to be a director or officer
at the time of incurring such expenses or liabilities), such expenses and
liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements, such settlements to be
approved by the Board of Directors of the Bank, if such action is brought
against Executive in his capacity as an officer or director of the Bank or any
of its subsidiaries.
-11-
SIGNATURES
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and
its seal to be affixed hereunto by its officers thereunto duly authorized, and
Executive has signed this Agreement, all as of the day and year set forth below.
BANKERS FEDERAL SAVINGS FSB
BY:
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
Chairman of the Board
EXECUTIVE
/s/ Xxxxxx Xxxxxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxxxxx
