EXHIBIT 10.6
FIRST LINCOLN BANCSHARES INC.
EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement") is made effective as of______________, 1998 by
and between First Lincoln Bancshares Inc. (the "Holding Company"), a corporation
organized under the laws of Delaware with its principal offices at 00/xx/ xxx X
Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, and XxXxxx X. Xxxxxxxxxx (the "Executive").
Any reference to the "Bank" herein shall mean First Federal Lincoln Bank or any
successor thereto.
WHEREAS, the Holding Company wishes to assure itself of the services of the
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Holding
Company 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 the Executive's employment hereunder, the Executive
shall serve as Chief Executive Officer of First Federal Lincoln Bank-Iowa (the
"Iowa Bank") a subsidiary of the Bank, with responsibility for, among other
things, operation and management of the Bank's activities in Iowa, Chairman of
the Board of the Bank, an executive position, with responsibility for, among
other things, calling meetings of the board of directors of the Bank, presiding
at such meetings and exercising certain oversight responsibilities through
service on various management committees of the Bank, and Chairman of the Board
of the Holding Company, an executive position with responsibility for, among
other things, determining the order of business and procedures at meetings of
shareholders and presiding at such meetings, calling special meetings of the
board of directors of the holding company and presiding at such meetings. The
Executive shall render administrative and management services to the Bank, the
Iowa Bank and the Holding Company such as are customarily performed by persons
in similar executive capacities. During the term of this Agreement, the Holding
Company agrees (a) to elect the Executive to the Board of Directors of the Bank
and (b) to nominate the executive for election to the Board of Directors of the
Holding Company and, if the Executive is so elected, to elect the Executive as
Chairman of the Board of Directors of the Holding Company, an executive
position, and the Executive agrees to serve in such capacity. The Executive's
principal place of employment shall be 00xx xxx X Xxxxxxx, Xxxxxxx, Xxxxxxxx
00000. The Executive also agrees to serve, if elected, as an officer or director
of any subsidiary of the Holding Company.
2. TERMS.
(a) The period of the Executive's employment under this Agreement shall
commence as of the date first above written and shall continue for a period of
thirty-six (36) full calendar months thereafter. Commencing on the date of the
execution of this Agreement, the term of this Agreement shall be extended for
one day each day until such time as the board of directors of the Holding
Company (the "Board") or the Executive elects not to extend the term of the
Agreement by giving written notice to the other party in accordance with Section
8 of this Agreement, in which case the term of this Agreement shall be fixed and
shall end on the third anniversary of the date of such written notice.
(b) During the period of the Executive's employment hereunder, except for
periods of absence occasioned by illness, vacation periods, and leaves of
absence, the 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 Holding Company, the Bank and the Iowa Bank, its
direct and indirect subsidiaries, (the "Subsidiaries") and participation in
community, professional and civic organizations; provided, however, that, with
the approval of the Board, as evidenced by a resolution adopted from time to
time, the 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 will not present any conflict of interest with the Holding Company or the
Subsidiaries, or materially affect the performance of the Executive's duties
pursuant to this Agreement.
(c) Notwithstanding anything herein to the contrary, the Executive's
employment with the Holding Company, the Bank or the Iowa Bank may be terminated
by the Holding Company or the Executive during the term of this Agreement,
subject to the terms and conditions of this Agreement. However, the Executive
shall not perform, in any respect, directly or indirectly, during the pendency
of his temporary or permanent suspension or termination from the Bank or the
Iowa Bank, duties and responsibilities formerly performed at the Bank or the
Iowa Bank as part of his duties and responsibilities as Chairman of the Board of
the Holding Company.
3. COMPENSATION AND REIMBURSEMENT.
The Executive shall receive compensation and reimbursement under this
Agreement as follows:
(a) The Executive shall be entitled to a salary from the Holding Company or
the Subsidiaries of $110,000 per year ("Base Salary") payable in accordance with
the normal payroll practices of the Bank. Base Salary shall include any amounts
of compensation deferred by the Executive under any tax-qualified retirement or
welfare benefit plan or any other deferred compensation arrangement maintained
by the Holding Company and its Subsidiaries. During the period of this
Agreement, the Executive's Base Salary shall be reviewed by the Board at least
annually, with the Board making its first review no later than one year from the
date of this
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Agreement. The Board may increase the Executive's Base Salary at any time during
the term of this Agreement and the resulting annual salary attributable to such
increase shall become the "Base Salary" for purposes of this Agreement from the
date of such increase.
(b) Discretionary Bonuses. The Executive shall be entitled to participate
in an equitable manner with all other executive officers of the Holding Company
in discretionary bonuses as authorized and declared by the Board to executive
employees. No other compensation provided for in this Agreement shall be deemed
a substitute for the Executive's right to participate in such bonuses when and
as declared by the Board.
(c) The Executive shall be entitled to receive fees for serving as a
director of the Holding Company and/or the Bank and for serving as Chairman of
the Board of the Holding Company and/or the Bank or as a member of any committee
as received by other members of the Boards of Directors of the Holding Company
and/or the Bank.
(d) The Executive shall be entitled to participate in any employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
the Executive was participating or with respect to which the Executive was
deriving a benefit immediately prior to the beginning of the term of this
Agreement, and the Holding Company and its Subsidiaries will not, without the
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites which would adversely affect the Executive's rights or benefits
thereunder, except to the extent that such changes are made applicable to all
employees participating in such plans, arrangements or perquisites on a non-
discriminatory basis. Without limiting the generality of the foregoing
provisions of this Subsection (d), the Executive shall be entitled to
participate in and receive benefits under all plans relating to stock options,
restricted stock awards, stock purchases, pension, thrift, profit-sharing,
employee stock ownership, supplemental retirement, group life insurance, medical
and other health and welfare benefit coverage, education, cash or stock bonuses,
and other retirement or employee benefits or combinations thereof, that are now
or hereafter maintained for the benefit of the Holding Company's and
Subsidiaries' executive employees or employees generally. Further, with respect
to any plan regarding stock options, restricted stock awards, and stock
purchases, the Executive shall be entitled to receive benefits in an equitable
manner with all other executive officers taking into consideration the
Executive's positions as Chairman of the Board of the Holding Company, Chief
Executive Officer of the Iowa Bank with responsibility for, among other things,
the operation of the Iowa Bank as its senior executive and executive management
of the Bank's activities in Iowa, and Chairman of the Board of the Bank, with
executive responsibilities. 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.
(e) The Holding Company shall pay or reimburse the Executive for all
reasonable travel and other expenses incurred in the performance of the
Executive's obligations under this Agreement.
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4. PAYMENTS TO THE EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) The provisions of this Section shall apply upon the occurrence of an
"Event of Termination" (as herein defined) during the Executive's term of
employment under this Agreement. As used in this Agreement, subject to Section
22, an "Event of Termination" shall mean and include any one or more of the
following: (i) the termination by the Bank, the Iowa Bank or the Holding
Company of the Executive's employment hereunder for any reason other than
termination governed by Section 5(a) hereof, or Termination for Cause, as
defined in Section 7 hereof; (ii) the Executive's resignation from the employ of
the Holding Company, the Bank or the Iowa Bank, upon any (A) failure by the
Bank, the Iowa Bank or the Holding Company to elect, reelect, appoint,
reappoint, nominate or renominate the Executive to any corporate office set
forth in Section 1, unless consented to by the Executive, (B) material change in
the Executive's functions, authorities, duties, or responsibilities with the
Holding Company or its Subsidiaries, which change would cause the Executive's
position to become one of lesser responsibility, importance, or scope than the
position described in Section 1, unless consented to by the Executive, (C)
relocation of the Executive's principal place of employment by more than 25
miles from its location at the effective date of this Agreement, unless
consented to by the Executive, (D) material reduction in the benefits and
perquisites to the Executive from those being provided as of the effective date
of this Agreement, unless consented to by the Executive, (E) liquidation or
dissolution of the Holding Company or the Bank, or (F) breach of this Agreement
by the Holding Company. Upon the occurrence of any Event of Termination, the
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 six full calendar months after the Event of Termination.
(b) Upon the occurrence of an Event of Termination, on the "Date of
Termination," as defined in Section 8, the Holding Company shall pay or provide
to the Executive, or, in the event of his death subsequent to the Event of
Termination, his beneficiary or beneficiaries, or his estate, as the case may
be, the following: (i) the Base Salary and bonuses in accordance with Sections
3(a) and 3(b), respectively, that would have been paid to the Executive for the
remaining term of this Agreement had the Event of Termination not occurred, plus
the value, as calculated by a recognized firm customarily performing such
valuations, of any stock options or related rights which, as of the Date of
Termination, have been granted to the Executive but are not exercisable and the
value of any restricted stock or related rights which have been granted to the
Executive but in which the Executive does not have a non-forfeitable or fully-
vested interest as of the Date of Termination; and (ii) all benefits, including
health insurance, in accordance with Section 3(d), that would have been paid or
provided to the Executive for the remaining term of this Agreement had the Event
of Termination not occurred. At the election of the Executive, which election
is to be made prior to an Event of Termination, such payments shall be made in a
lump sum. In the event that no election is made, payment to the Executive will
be made on a monthly basis in approximately equal installments during the
remaining term of the Agreement.
(c) Upon the occurrence of an Event of Termination, the Holding Company
will cause to be continued life, medical, dental and disability coverage
substantially equivalent to the coverage
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maintained by the Holding Company or its Subsidiaries for the Executive prior to
his termination at no premium cost to the Executive. Such coverage shall cease
upon the expiration of the remaining term of this Agreement, unless otherwise
provided for in a separate agreement entered into by the Executive and the Bank
or the Holding Company.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the Holding
Company or the Bank shall mean an event 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 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, as amended, the Federal Deposit Insurance Act, and the
Rules and Regulations promulgated by the Office of Thrift Supervision (or its
predecessor agency), as in effect on the date hereof (provided, that in applying
the definition of change in control as set forth under the rules and regulations
of the OTS, the Board shall substitute its judgment for that of the OTS); or
(iii) without limitation such a Change in Control shall be deemed to have
occurred at such time as (A) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting
securities of the Bank or the Holding Company representing 20% or more of the
Bank's or the Holding Company's outstanding voting securities or right to
acquire such securities except for any voting securities of the Bank purchased
by the Holding Company and any voting securities purchased by any employee
benefit plan of the Holding Company or its Subsidiaries, 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 Company's stockholders was
approved by a Nominating Committee solely composed of members which are
Incumbent Board members, shall be, for purposes of this clause (B), considered
as though he were a member of the Incumbent Board, or (C) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Bank or the Holding Company or similar transaction occurs or is
effectuated in which the Bank or Holding Company is not the resulting entity;
provided, however, that such an event listed above will be deemed to have
occurred or to have been effectuated upon the receipt of all required federal
regulatory approvals not including the lapse of any statutory waiting periods,
or (D) a proxy statement has been distributed 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 Company or Bank with one
or more corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Bank or the
Holding Company shall be distributed, or (E) a tender offer is made for 20% or
more of the voting securities of the Bank or Holding Company then outstanding.
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(b) If a Change in Control has occurred pursuant to Section 5(a) or the
Board has determined that a Change in Control has occurred, the Executive shall
be entitled to the benefits provided in paragraphs (c) and (d), of this Section
5.
(c) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Holding Company shall pay or provide to the Executive, or in the event of
his subsequent death, his beneficiary or beneficiaries, or his estate, as the
case may be the greater of: (i) the Base Salary and bonuses in accordance with
Sections 3(a) and 3(b), respectively, that would have been paid to the Executive
for the remaining term of this Agreement had the event described in subsection
(b) of this Section 5 not occurred, plus the value, as calculated by a
recognized firm customarily performing such valuations, of any stock options or
related rights which, as of the Date of Termination, have been granted to the
Executive but are not exercisable, and the value of any restricted stock or
related rights which have been granted to the Executive but in which the
Executive does not have a non-forfeitable or fully-vested interest as of the
Date of Termination, and all benefits, including health insurance, in accordance
with Section 3(d) that would have been provided to the Executive for the
remaining term of this Agreement had the event described in subsection (b) of
this Section (5) not occurred; or (ii) three (3) times the Executive's Average
Annual Compensation (as herein defined) for the five (5) preceding taxable
years. Such annual compensation shall include all taxable income paid by the
Holding Company or the Subsidiaries, including but not limited to, Base Salary,
commissions and bonuses as well as contributions on behalf of the Executive to
any pension and profit sharing plan, severance payments, directors or committee
fees and fringe benefits paid or to be paid to the Executive during such years.
At the election of the Executive, which election is to be made prior to a Change
in Control, such payment shall be made in a lump sum. In the event that no
election is made, payment to the Executive will be made on a monthly basis in
approximately equal installments during the remaining term of the Agreement.
Such payments shall not be reduced in the event the Executive obtains other
employment following termination of employment.
(d) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Company will cause to be continued life, medical, dental and disability
coverage substantially equivalent to the coverage maintained by the Bank for the
Executive at no premium cost to the Executive prior to his severance. Such
coverage and payments shall cease upon the expiration of sixty (60) months
following the Change in Control, unless otherwise provided for in a separate
agreement entered into by the Executive and the Bank or the Holding Company.
6. CHANGE OF CONTROL RELATED PROVISIONS.
In each calendar year that the Executive is entitled to receive payments or
benefits under the provisions of this Employment Agreement, the Holding Company
shall determine if an excess parachute payment (as defined in Section 4999 of
the Internal Revenue Code of 1986, as amended, and any successor provision
thereto, (the "Code")) exists. Such determination shall be made after taking
any reductions permitted pursuant to Section 280G of the Code and the
regulations thereunder. Any amount determined to be an excess parachute payment
after taking into account such reductions shall be hereafter referred to as the
"Initial Excess Parachute Payment". As soon as
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practicable after a Change in Control, the Initial Excess Parachute Payment
shall be determined. Upon the Date of Termination following a Change in Control,
the Holding Company shall pay the Executive, subject to applicable withholding
requirements under applicable state or federal law, an amount equal to:
(1) twenty (20) percent of the Initial Excess Parachute Payment (or such
other amount equal to the tax imposed under Section 4999 of the Code);
and
(2) such additional amount (tax allowance) as may be necessary to
compensate the Executive for the payment by the Executive of state and
federal income and excise taxes on the payment provided under clause
(1) and on any payments under this Clause (2). In computing such tax
allowance, the payment to be made under Clause (1) shall be multiplied
by the "gross up percentage" ("GUP"). The GUP shall be determined as
follows:
Tax Rate
GUP = __________
1- Tax Rate
The "Tax Rate" for purposes of computing the GUP shall be the sum of
the highest marginal federal and state income and employment-related
tax rates, including any applicable excise tax rates, applicable to
the Executive in the year in which the payment under Clause (1) is
made.
(3) Notwithstanding the foregoing, if it shall subsequently be determined
in a final judicial determination or a final administrative settlement to which
the Executive is a party that the excess parachute payment as defined in Section
4999 of the Code, reduced as described above, is more than the Initial Excess
Parachute Payment (such different amount being hereafter referred to as the
"Determinative Excess Parachute Payment") then the Holding Company's independent
accountants shall determine the amount (the "Adjustment Amount") the Holding
Company must pay to the Executive in order to put the Executive in the same
position as the Executive would have been if the Initial Excess Parachute
Payment had been equal to the Determinative Excess Parachute Payment. In
determining the Adjustment Amount, independent accountants of the Holding
Company shall take into account any and all taxes (including any penalties and
interest) paid by or for the Executive or refunded to the Executive or for the
Executive's benefit. As soon as practicable after the Adjustment Amount has
been so determined, the Holding Company shall pay the Adjustment Amount to the
Executive. In no event however, shall the Executive make any payment under this
paragraph to the Holding Company.
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7. TERMINATION FOR CAUSE OR IN THE EVENT OF DEATH OR DISABILITY.
(a) The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, willful misconduct, any breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses), final cease and desist order or material breach of any
provision of this Agreement. Notwithstanding the foregoing, the Executive shall
not be deemed to have been terminated for Cause unless and until there shall
have been delivered to him a Notice of Termination which shall include a copy of
a resolution duly adopted by the affirmative vote of not less than three-fourths
of the members of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to the 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, the 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 Termination for Cause. During the period beginning on the
date of the Notice of Termination for Cause pursuant to Section 8 hereof through
the Date of Termination, stock options and related limited rights granted to the
Executive under any stock option plan shall not be exercisable nor shall any
unvested awards granted to the Executive under any stock benefit plan of the
Bank, the Holding Company or any subsidiary or affiliate thereof, vest. At the
Date of Termination, such stock options and related limited rights and any such
unvested awards shall become null and void and shall not be exercisable by or
delivered to the Executive at any time subsequent to such Termination for Cause.
(b) The Executive's employment shall terminate automatically upon the
Executive's death during the term of this Agreement. If the Holding Company
determines in good faith that the "Disability" (as defined below) of the
Executive has occurred, it may give to the Executive written notice in
accordance with Section 8 of its intention to terminate this Agreement. In such
event, the Executive's employment with the Holding Company shall terminate
effective on the 30/th/ day after receipt of the notice by the Executive,
provided that, within 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" means a condition, resulting from bodily injury or
disease or mental impairment that renders, and for a six consecutive months
period has rendered, the Executive unable to perform his duties under this
Agreement. Disability shall be determined by a physician or group of physicians
selected by the Holding Company or its insurance carriers and acceptable to the
Executive or the Executive's legal representative. If the employment of the
Executive under this Agreement shall terminate because of death or Disability,
the Holding Company shall pay to the Executive or the Executive's estate or
representative, as the case may be, the Base Salary and discretionary bonus for
the fiscal year in which the termination occurs, prorated for the number of
weeks during which the Executive was employed by the Holding Company during such
fiscal year. In addition, the Executive or his designated beneficiary, as the
case may be, shall receive such amounts as are provided for in the disability
policy or life insurance policy provided by the Holding Company for the benefit
of the Executive; provided, further, that the Executive shall be provided with
coverage under a disability policy that will provide him with payments that
would have at least
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equaled those made under this Agreement for the term of the Agreement had the
Executive not incurred a Disability.
8. NOTICE.
(a) Any purported termination by the Holding Company or by the 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 the Executive's employment under
the provision so indicated.
(b) "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).
(c) 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 occurrence of a
Change in Control and voluntary termination by the Executive in which case the
Date of Termination shall be the date specified in the Notice, 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 therefrom 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 Holding Company will
continue to pay the Executive his full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, Base
Salary) and continue him 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.
Amounts paid under this Section are in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any other amounts due
under this Agreement.
9. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to the Executive under this Agreement shall
be subject to the Executive's compliance with this Section 9 for one (1) full
year after the earlier of the expiration of this Agreement or termination of the
Executive's employment with the Holding Company. The Executive shall, upon
reasonable notice, furnish such information and assistance to the Holding
Company as may reasonably be required by the Holding Company in connection with
any litigation in which it or any of its subsidiaries or affiliates is, or may
become, a party.
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(b) The Executive shall not be required to mitigate the amount of any
salary or other payment or benefit provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits after the date of termination or otherwise.
10. NON-COMPETITION AND NON-DISCLOSURE.
(a) Upon any termination of the Executive's employment hereunder pursuant
to Section 4 hereof, the Executive agrees not to compete with the Holding
Company or its Subsidiaries for a period of one (1) year following such
termination in any city, town or county in which the Executive's normal business
office is located and the Holding Company or any of its Subsidiaries has an
office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. The Executive
agrees that during such period and within said cities, towns and counties, the
Executive shall not work for or advise, consult or otherwise serve with,
directly or indirectly, any entity whose business materially competes with the
depository, lending or other business activities of the Holding Company or its
Subsidiaries. The parties hereto, recognizing that irreparable injury will
result to the Holding Company or its Subsidiaries, its business and property in
the event of the Executive's breach of this Subsection 10(a) agree that in the
event of any such breach by the Executive, the Holding Company or its
Subsidiaries, will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by the Executive,
the Executive's partners, agents, servants, employees and all persons acting for
or under the direction of the Executive. The Executive represents and admits
that in the event of the termination of his employment pursuant to Section 7
hereof, the Executive's experience and capabilities are such that the Executive
can obtain employment in a business engaged in other lines and/or of a different
nature than the Holding Company or its Subsidiaries, and that the enforcement of
a remedy by way of injunction will not prevent the Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the Holding Company
or its Subsidiaries from pursuing any other remedies available to the Holding
Company or its Subsidiaries for such breach or threatened breach, including the
recovery of damages from the Executive.
(b) The Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Holding Company and
its Subsidiaries as it may exist from time to time, is a valuable, special and
unique asset of the business of the Holding Company and its Subsidiaries. The
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
Holding Company and its Subsidiaries thereof to any person, firm, corporation,
or other entity for any reason or purpose whatsoever unless expressly authorized
by the Board of Directors or required by law. Notwithstanding the foregoing, the
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 Holding Company. In the event of a
breach or threatened breach by the Executive of the provisions of this Section,
the Holding Company will be entitled to an
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injunction restraining the Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Holding Company or its Subsidiaries 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. Nothing herein will
be construed as prohibiting the Holding Company from pursuing any other remedies
available to the Holding Company for such breach or threatened breach, including
the recovery of damages from the Executive.
11. SOURCE OF PAYMENTS.
(a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Holding Company subject to Section 11(b).
(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by the Executive under the Employment Agreement dated_______________,
1998, between the Executive and the Bank, such compensation payments and
benefits paid by the Bank will be subtracted from any amount due simultaneously
to the Executive under similar provisions of this Agreement. Payments pursuant
to this Agreement and the Bank Agreement shall be allocated in proportion to the
level of activity and the time expended on such activities by the Executive as
determined by the Holding Company and the Bank on a quarterly basis.
12. 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 Holding Company and
the Executive, except that this Agreement shall not amend, terminate, impact or
affect or operate to reduce any provision of the Bank Agreement, or other
agreement incorporated in the Bank Agreement or any benefit or compensation
inuring to the Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that the Executive is subject to
receiving fewer benefits than those available to him without reference to this
Agreement.
13. 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, the
Executive and the Holding Company and their respective successors and assigns.
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14. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
15. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
16. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
17. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Nebraska,
unless otherwise specified herein.
18. ARBITRATION.
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 Executive within
fifty (50) miles from the location of the Bank, in accordance with the
Commercial Arbitration 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 the Executive 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.
In the event any dispute or controversy arising under or in connection with
the Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the Executive shall be entitled to the
payment of all back-pay, including salary, bonuses and any other
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cash compensation, fringe benefits and any compensation and benefits due the
Executive under this Agreement.
19. PAYMENT OF LEGAL FEES.
All reasonable legal fees paid or incurred by the Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Holding Company, if the Executive is successful pursuant to
a legal judgment, arbitration or settlement.
20. INDEMNIFICATION.
(a) The Holding Company shall provide the Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense and shall indemnify the
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under Delaware 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 Holding Company (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.
(b) Any payments made to the Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R.
Part 359 and any rules or regulations promulgated thereunder.
21. SUCCESSOR TO THE HOLDING COMPANY.
The Holding Company 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 Bank or the Holding Company,
expressly and unconditionally to assume and agree to perform the Holding
Company's obligations under this Agreement, in the same manner and to the same
extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
22. SALE, TRANSFER OR MERGER OF THE IOWA BANK.
Notwithstanding the provisions of Section 4 or any other provision of
this Agreement, any action with respect to the Executive's position as Chief
Executive Officer of the Iowa Bank in connection with or resulting from a sale,
merger, transfer or similar reorganization of the Iowa Bank shall not be deemed
an Event of Termination if, following such action, the Executive succeeds to an
executive officer position of the Bank.
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SIGNATURES
IN WITNESS WHEREOF, First Lincoln Bancshares Inc. has caused this Agreement
to be executed and its seal to be affixed hereunto by its duly authorized
officer and its directors, and the Executive has signed this Agreement, on the
_______ day of _________, 1998.
ATTEST: HOLDING COMPANY.
____________________________ By: ____________________________
Xxxxxxxx X. Xxxxx ____________________________
Secretary Director
For the Entire Board of Directors
[SEAL]
WITNESS:
____________________________ By: ____________________________
Xxxxxxxx X. Xxxxx XxXxxx X. Xxxxxxxxxx
Secretary Executive
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