Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), made this 1/st/ day of January, 2003, by
and among JEFFERSON BANCSHARES, M.H.C. (the "Company"), JEFFERSON FEDERAL
SAVINGS AND LOAN ASSOCIATION (the "Association") and XXXXXXXX X. XXXXX
("Executive").
W I T N E S S E T H
WHEREAS, Executive serves in a position of substantial responsibility;
WHEREAS, the Company and the Association wish to assure the services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Association 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. Employment. Executive is employed as the President and Chief Executive
Officer and of the Company and the Association. Executive shall perform all
duties and shall have all powers which are commonly incident to the offices of
President and Chief Executive Officer and which, consistent with those offices,
are delegated to him by the Chairman of the Board of Directors of the
Association and the Company.
2. Location and Facilities. The Executive will be furnished with the
working facilities and staff customary for executive officers with the title and
duties set forth in Section 1 and as are necessary for him to perform his
duties. The location of such facilities and staff shall be at the principal
administrative offices of the Company and the Association, or at such other site
or sites customary for such offices.
3. Term.
a. The term of this Agreement shall be (i) the initial term, consisting
of the period commencing on the date of this Agreement (the "Effective
Date") and ending on the third anniversary of the Effective Date, plus
(ii) any and all extensions of the initial term made pursuant to this
Section 3.
b. Commencing on the first year anniversary date of this Agreement, and
continuing on each anniversary thereafter, the disinterested members
of the boards of directors of the Association and the Company may
extend the Agreement an additional year such that the remaining term
of the Agreement shall be thirty-six (36) months, unless Executive
elects not to extend the term of this Agreement by giving written
notice in accordance with Section 19 of this Agreement. The Board of
Directors of the Association (the "Board") will review the Agreement
and Executive's performance annually for purposes of determining
whether to extend the Agreement and the rationale and results thereof
shall be included in the minutes of the Board's meeting. The Board of
Directors of the Association shall give notice to Executive as soon as
possible after such review as to whether the Agreement is to be
extended.
4. Base Compensation.
a. The Company and the Association agree to pay the Executive during the
term of this Agreement a base salary at the rate of $165,000.00 per
year, payable in accordance with customary payroll practices.
b. The Board shall review annually the rate of the Executive's base
salary based upon factors they deem relevant, and may maintain or
increase his salary, provided that no such action shall reduce the
rate of salary below the rate in effect on the Effective Date.
c. In the absence of action by the Board, the Executive shall continue to
receive salary at the annual rate specified on the Effective Date or,
if another rate has been established under the provisions of this
Section 4, the rate last properly established by action of the Board
under the provisions of this Section 4.
5. Bonuses. In lieu of any bonus normally provided to permanent full-time
employees of the Association, the Association agrees to provide a bonus program
to the Executive which will provide the Executive with the opportunity to earn
up to 50% of the Executive's base salary, on an annual basis, the amount of
which shall be determined by specific performance standards and a formula agreed
to by Executive and the Association annually. Performance standards shall be
measured on a calendar year, and no bonus shall be payable if Executive is not
employed on December 31 of the year in question; provided, however, in the event
of death of the Executive, the bonus for the calendar year of Executive's death
shall be prorated on a quarterly basis, using the information for the quarter(s)
completed prior to Executive's death.
6. Benefit Plans. The Executive shall be entitled to participate in such
life insurance, medical, dental, pension, profit-sharing, retirement and
stock-based compensation plans and other programs and arrangements as may be
approved from time to time by the Company and the Association for the benefit of
their employees. In addition, during the term of this Agreement, the Association
shall provide the Executive with a supplemental life insurance policy with a
death benefit of not less than $350,000. Notwithstanding the termination of this
Agreement for any reason, other than upon the Executive's termination for Cause,
the Association further agrees that the Executive shall receive a supplemental
retirement benefit of $15,083 per year, beginning during the calendar year in
which the Executive attains age 65 and continuing for a total of fifteen (15)
years.
7. Vacation and Leave.
a. The Executive shall be entitled to vacations and other leave in
accordance with policy for senior executives, or otherwise as approved
by the Board, but, in any event, not less than four (4) weeks vacation
annually.
b. In addition to paid vacations and other leave, the Executive shall be
entitled, without loss of pay, to absent himself voluntarily from the
performance of his employment for such additional periods of time and
for such valid and legitimate reasons as the Board may in its
discretion determine. Further, the Board may grant to the Executive a
leave or leaves of absence, with or without pay, at such time or times
and upon such terms and conditions as the Board in its discretion may
determine.
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8. Expense Payments and Reimbursements. The Executive shall be reimbursed
for all reasonable out-of-pocket business expenses that he shall incur in
connection with his services under this Agreement upon substantiation of such
expenses in accordance with applicable policies of the Company and the
Association. In addition, Executive shall receive an allowance of $2,400 per
year for dues in professional, social and civic organizations.
9. Automobile Allowance. During the term of this Agreement, the Executive
shall be entitled to an annual automobile allowance of $12,000, payable in equal
monthly installments. Executive shall comply with reasonable reporting and
expense limitations on the use of such automobile as may be established by the
Company or the Association from time to time, and the Company or the Association
shall annually include on Executive's Form W-2 any amount of income attributable
to Executive's personal use of such automobile.
10. Loyalty and Confidentiality; Noncompetition.
a. During the term of this Agreement, Executive: (i) shall devote all his
time, attention, skill, and efforts to the faithful performance of his
duties hereunder; provided, however, that from time to time, Executive
may 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 Company and the Association or any of
their subsidiaries or affiliates, unfavorably affect the performance
of Executive's duties pursuant to this Agreement, or violate any
applicable statute or regulation and (ii) shall not engage in any
business or activity contrary to the business affairs or interests of
the Company and the Association.
b. Nothing contained in this Agreement shall prevent or limit Executive's
right to invest in the capital stock or other securities of any
business dissimilar from that of the Company and the Bank, or, solely
as a passive, minority investor, in any business.
c. Executive agrees to maintain the confidentiality of any and all
information concerning the operation or financial status of the
Company and the Association; the names or addresses of any of its
borrowers, depositors and other customers; any information concerning
or obtained from such customers; and any other information concerning
the Company and the Association to which he may be exposed during the
course of his employment. The Executive further agrees that, unless
required by law or specifically permitted by the Board in writing, he
will not disclose to any person or entity, either during or subsequent
to his employment, any of the above-mentioned information which is not
generally known to the public, nor shall he employ such information in
any way other than for the benefit of the Company and the Association.
d. Upon the termination of Executive's employment hereunder for any
reason, Executive agrees not to compete with the Association for a
period of two (2) years following such termination in any city, town
or county in which the Executive's normal business office is located
and the Association has an office or has filed an application for
regulatory approval to establish an office (or within a 60-mile radius
of each of such offices), determined as of the effective date of such
termination, except as agreed to pursuant to a resolution duly adopted
by the Board. Executive agrees that during such period and within said
cities, towns and counties, Executive shall not work for or advise,
consult or otherwise serve with, directly or indirectly, any entity
whose business materially competes with the depository,
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lending or other business activities of the Association. The parties hereto,
recognizing that irreparable injury will result to the Association, its business
and property in the event of Executive's breach of his obligations under this
paragraph and agree that in the event of any such breach by Executive, the
Association, will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by Executive,
Executive's partners, agents, servants, employees and all persons acting for or
under the direction of Executive. Nothing herein will be construed as
prohibiting the Association from pursuing any other remedies available to the
Association for such breach or threatened breach, including the recovery of
damages from Executive.
11. Termination and Termination Pay. Subject to Section 12 of this
Agreement, Executive's employment under this Agreement may be terminated in the
following circumstances:
a. Death. Executive's employment under this Agreement shall terminate
upon his death during the term of this Agreement, in which event
Executive's estate shall be entitled to receive the compensation due
to the Executive through the last day of the calendar month in which
his death occurred.
b. Retirement. This Agreement shall be terminated upon Executive's
retirement under the retirement benefit plan or plans in which he
participates pursuant to Section 6 of this Agreement or otherwise.
c. Disability.
i. The Board or Executive may terminate Executive's employment after
having determined Executive has a Disability. For purposes of
this Agreement, "Disability" means a physical or mental infirmity
that impairs Executive's ability to substantially perform his
duties under this Agreement and that results in Executive
becoming eligible for long-term disability benefits under any
long-term disability plans of the Company and the Association
(or, if there are no such plans in effect, that impairs
Executive's ability to substantially perform his duties under
this Agreement for a period of one hundred eighty (180)
consecutive days). The Board shall determine whether or not
Executive is and continues to be permanently disabled for
purposes of this Agreement in good faith, based upon competent
medical advice and other factors that they reasonably believe to
be relevant. As a condition to any benefits, the Board may
require Executive to submit to such physical or mental
evaluations and tests as it deems reasonably appropriate.
ii. In the event of such Disability, Executive's obligation to
perform services under this Agreement will terminate. The
Association will pay Executive, as Disability pay, an amount
equal to seventy-five (75) percent of Executive's weekly rate of
base salary in effect as of the date of his termination of
employment due to Disability. Disability payments will be made on
a monthly basis and will commence on the first day of the month
following the effective date of Executive's termination of
employment for Disability and end on the earlier of: (A) the date
he returns to full-time employment at the Association in the same
capacity as he was employed prior to his termination for
Disability; (B) his death; or (C) the remaining term of the
Agreement (if the Agreement had not been earlier terminated by
the Executive's
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Disability). Such payments shall be reduced by the amount of any
short- or long-term disability benefits payable to the Executive
under any other disability programs sponsored by the Company and
the Association. In addition, during any period of Executive's
Disability, Executive and his dependents shall, to the greatest
extent possible, continue to be covered under all benefit plans
(including, without limitation, retirement plans and medical,
dental and life insurance plans) of the Company and the
Association, in which Executive participated prior to his
Disability on the same terms as if Executive were actively
employed by the Company and the Association.
d. Termination for Cause.
i. The Board may, by written notice to the Executive in the form and
manner specified in this paragraph, immediately terminate his
employment at any time, for "Cause". The Executive shall have no
right to receive compensation or other benefits for any period
after termination for Cause except for vested
benefits.Termination for "Cause" shall mean termination because
of, in the good faith determination of the Board, Executive's:
(1) Personal dishonesty;
(2) Incompetence;
(3) Willful misconduct;
(4) Breach of fiduciary duty involving personal profit;
(5) Intentional failure to perform duties under this Agreement;
(6) Willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) that reflects
adversely on the reputation of the Company and the
Association, any felony conviction, any violation of law
involving moral turpitude, or any violation of a final
cease-and-desist order; or
(7) Material breach by Executive of any provision of this
Agreement.
ii. Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for Cause by the Company and the Association
unless there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of three-fourths
(3/4) of the entire membership of the Board at a meeting of such
Board called and held for the purpose (after reasonable notice to
Executive and an opportunity for Executive to be heard before the
Board with counsel), of finding that in the good faith opinion of
the Board, Executive was guilty of the conduct described above
and specifying the particulars thereof.
e. Voluntary Termination by Executive. In addition to his other rights to
terminate under this Agreement, Executive may voluntarily terminate
employment during the term of this
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Agreement upon at least sixty (60) days prior written notice to the Board,
in which case Executive shall receive only his compensation, vested rights
and employee benefits up to the date of his termination.
f. Without Cause or With Good Reason.
i. In addition to termination pursuant to Sections 11(a) through 11(e)
the Board, may, by written notice to Executive, immediately terminate
his employment at any time for a reason other than Cause (a
termination "Without Cause") and Executive may, by written notice to
the Board, immediately terminate this Agreement at any time within
ninety (90) days following an event constituting "Good Reason" as
defined below (a termination "With Good Reason").
ii. Subject to Section 12 of this Agreement, in the event of termination
under this Section 11(f), Executive shall be entitled to receive a
payment equal to the base salary (determined by reference to the
Executive's base salary on the termination date) and bonuses
(determined by reference to the Executive's average bonus over the
three (3) years preceding his termination date or such lesser period
as he was employed by the Association) that would otherwise have been
payable over the remaining term of the Agreement. Such amount shall be
paid in one lump sum within ten (10) calendar days of such
termination. Also, in such event, Executive shall, for the remaining
term of the Agreement, receive the benefits he would have received
during the remaining term of the Agreement under any retirement
programs (whether tax-qualified or non-qualified) in which Executive
participated prior to his termination (with the amount of the benefits
determined by reference to the benefits received by the Executive or
accrued on his behalf under such programs during the twelve (12)
months preceding his termination) and continue to participate in any
benefit plans of the Company and the Association that provide health
(including medical and dental), life, or similar coverage upon terms
no less favorable than the most favorable terms provided to senior
executives of the Company and the Association during such period. In
the event that the Company and the Association are unable to provide
such coverage by reason of Executive no longer being an employee, the
Company and the Association shall provide Executive with comparable
coverage on an individual policy basis.
iii. "Good Reason" shall exist if, without Executive's express written
consent, the Company and the Association materially breach any of
their respective obligations under this Agreement. Without limitation,
such a material breach shall be deemed to occur upon any of the
following:
(1) A material reduction in Executive's responsibilities or authority
in connection with his employment with the Company or the
Association;
(2) Assignment to Executive of duties of a non-executive nature or
duties for which he is not reasonably equipped by his skills and
experience;
(3) A reduction in salary or benefits contrary to the terms of this
Agreement, or, following a Change in Control as defined in
Section 12 of this
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Agreement, any reduction in salary or material reduction in
benefits below the amounts to which he was entitled prior to
the Change in Control;
(4) Termination of incentive and benefit plans, programs or
arrangements, or reduction of Executive's participation to
such an extent as to materially reduce their aggregate value
below their aggregate value as of the Effective Date; or
(5) A requirement that Executive relocate his principal business
office or his principal place of residence outside of the
area consisting of a twenty-five (25) mile radius from the
current main office and any branch of the Association, or
the assignment to Executive of duties that would reasonably
require such a relocation; or
iv. Notwithstanding the foregoing, a reduction or elimination of the
Executive's benefits less than one or more benefit plans
maintained by the Company and the Association as part of a good
faith, overall reduction or elimination of such plans or benefits
thereunder applicably to all participants in a manner that does
not discriminate against Executive (except as such discrimination
may be necessary to comply with law) shall not constitute an
event of Good Reason or a material breach of this Agreement,
provided that benefits of the type or to the general extent as
those offered under such plans prior to such reduction or
elimination are not available to other officers of the Company
and the Association or any company that controls either of them
under a plan or plans in or under which Executive is not entitled
to participate.
12. Termination in Connection with a Change in Control.
a. For purposes of this Agreement, a "Change in Control" shall be deemed
to occur on the earliest of:
(i) such time as any "person" (as the term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended
("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 Association representing
25% or more of the Association's outstanding voting securities or
the right to acquire such securities, except for any voting
securities purchased by any employee benefit plan of the
Association;
(ii) such time as individuals who constitute the Board of Directors 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 constituting the Incumbent Board (or members who were
nominated by the
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Incumbent Board), or whose nomination for election by the
Association's stockholders was approved by a Nominating
Committee solely composed of members which are Incumbent Board
members (or members nominated by the Incumbent Board), shall be,
for purposes of this clause (iii), considered as though he or
she were a member of the Incumbent Board;
(iii) such time as a reorganization, merger, consolidation, or similar
transaction occurs or is effectuated as a result of which 60% of
shares of the common stock of the resulting entity are owned by
persons who were not stockholders of the Association immediately
prior to the consummation of the transaction;
(iv) such time as substantially all of the assets of the Association
are sold or otherwise transferred to another corporation or
other entity that is not controlled by the Association.
Notwithstanding anything in this Agreement to the contrary, in no event shall
(i) the conversion of the Company and the Association from the mutual holding
company form of organization to the full stock form of organization (including
without limitation, through the formation of a stock holding company as the
parent of the Association), (ii) the formation of a mid-tier holding company
controlled by the Company as the parent holding company of the Association or
(iii) the consummation of an additional offering by the Association (or any
mid-tier holding company controlled by the Company) in a transaction which
results in the Company continuing to qualify as a mutual holding company,
constitute a "Change in Control" for purposes of this Agreement.
b. Termination. If within the period ending two years after a Change in
Control, (i) the Company and the Association shall terminate the
Executive's employment Without Cause, or (ii) Executive voluntarily
terminates his employment With Good Reason, the Company and the
Association shall, within ten calendar days of the termination of
Executive's employment, make a lump-sum cash payment to him equal to
2.99 times the Executive's average Annual Compensation over the five
(5) most recently completed calendar years ending with the year
immediately preceding the effective date of the Change in Control (or
such lesser number of completed calendar years as the Executive has
been employed by the Company and the Association). In determining
Executive's average Annual Compensation, Annual Compensation shall
include base salary and any other taxable income, including but not
limited to amounts related to the granting, vesting or exercise of
restricted stock or stock option awards, commissions, bonuses (whether
paid or accrued for the applicable period), as well as, retirement
benefits, director or committee fees and fringe benefits paid or to be
paid to Executive or paid for Executive's benefit during any such
year, profit sharing, employee stock ownership plan and other
retirement contributions or benefits, including to any tax-qualified
plan or arrangement (whether or not taxable) made or accrued on behalf
of Executive of such year. The cash payment made under this Section
12(b) shall be made in lieu of any payment also required under Section
11(f) of this Agreement because of a termination in such period.
Executive's rights under Section 11(f) are not otherwise affected by
this Section 12. Also, in such event, the Executive shall, for a
thirty-six (36) month period following his termination of employment,
receive the benefits he would have received over such period under any
retirement programs (whether tax-qualified or nonqualified) in which
the Executive participated prior to his termination (with the amount
of the benefits determined by reference to the benefits received by
the Executive or accrued on his behalf under such programs during the
twelve (12) months preceding the Change in Control) and continue to
participate in any benefit plans of the Company and the Association
that provide health (including medical and dental), life, or similar
coverage
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upon terms no less favorable than the most favorable terms provided to
senior executives during such period. In the event that the Company
and the Association are unable to provide such coverage by reason of
the Executive no longer being an employee, the Company and the
Association shall provide the Executive with comparable coverage on an
individual policy.
c. The provisions of Sections 12 and Sections 14 through 25, including
the defined terms used is such sections, shall continue in effect
until the later of the expiration of this Agreement or two years
following a Change in Control.
13. Indemnification and Liability Insurance.
a. Indemnification. The Company and the Association agree to indemnify
the Executive (and his heirs, executors, and administrators), and to
advance expenses related thereto, to the fullest extent permitted
under applicable law and regulations against any and 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 Executive of the Company, the
Association or any of their subsidiaries (whether or not he continues
to be a director or Executive at the time of incurring any 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, if such action is brought against the Executive in his capacity
as an Executive or director of the Company and the Association or any
of their subsidiaries. Indemnification for expense shall not extend to
matters for which the Executive has been terminated for Cause. Nothing
contained herein shall be deemed to provide indemnification prohibited
by applicable law or regulation. Notwithstanding anything herein to
the contrary, the obligations of this Section 13 shall survive the
term of this Agreement by a period of six (6) years.
b. Insurance. During the period in which indemnification of the Executive
is required under this Section, the Company and the Association shall
provide the Executive (and his heirs, executors, and administrators)
with coverage under a directors' and Executives' liability policy at
the expense of the Company and the Association, at least equivalent to
such coverage provided to directors and senior Executives of the
Company and the Association.
14. Reimbursement of Executive's Expenses to Enforce this Agreement. The
Company and the Association shall reimburse the Executive for all out-of-pocket
expenses, including, without limitation, reasonable attorneys' fees, incurred by
the Executive in connection with successful enforcement by the Executive of the
obligations of the Company and the Association to the Executive under this
Agreement. Successful enforcement shall mean the grant of an award of money or
the requirement that the Company and the Association take some action specified
by this Agreement (i) as a result of court order; or (ii) otherwise by the
Company and the Association following an initial failure of the Company and the
Association to pay such money or take such action promptly after written demand
therefor from the Executive stating the reason that such money or action was due
under this Agreement at or prior to the time of such demand.
15. Limitation of Benefits under Certain Circumstances. If the payments
and benefits pursuant to Section 12 of this Agreement, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Company and the Association, would constitute a "parachute
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payment" under Section 280G of the Code, the payments and benefits pursuant to
Section 12 shall be reduced or revised, in the manner determined by the
Executive, by the amount, if any, which is the minimum necessary to result in no
portion of the payments and benefits under Section 12 being non-deductible to
the Company and the Association pursuant to Section 280G of the Code and subject
to the excise tax imposed under Section 4999 of the Code. The determination of
any reduction in the payments and benefits to be made pursuant to Section 12
shall be based upon the opinion of the Company and the Association's independent
public accountants and paid for by the Company and the Association. In the event
that the Company, the Association and/or the Executive do not agree with the
opinion of such counsel, (i) the Company and the Association shall pay to the
Executive the maximum amount of payments and benefits pursuant to Section 12, as
selected by the Executive, which opinion indicates there is a high probability
of such payments and benefits being non-deductible to the Company and the
Association and subject to the imposition of the excise tax imposed under
Section 4999 of the Code and (ii) the Company and the Association may request,
and the Executive shall have the right to demand that they request, a ruling
from the IRS as to whether the disputed payments and benefits pursuant to
Section 12 have such consequences. Any such request for a ruling from the IRS
shall be promptly prepared and filed by the Company and the Association, but in
no event later than thirty (30) days from the date of the opinion of counsel
referred to above, and shall be subject to the Executive's approval prior to
filing, which shall not be unreasonably withheld. The Company, the Association
and the Executive agree to be bound by any ruling received from the IRS and to
make appropriate payments to each other to reflect any such rulings, together
with interest at the applicable federal rate provided for in Section 7872(f)(2)
of the Code. Nothing contained herein shall result in a reduction of any
payments or benefits to which the Executive may be entitled upon termination of
employment other than pursuant to Section 12 hereof, or a reduction in the
payments and benefits specified in Section 12 below zero.
16. Injunctive Relief. If there is a breach or threatened breach of
Section 10 of this Agreement, the parties agree that there is no adequate remedy
at law for such breach, and that the Company and the Association shall be
entitled to injunctive relief restraining the Executive from such breach or
threatened breach, but such relief shall not be the exclusive remedy hereunder
for such breach. The parties hereto likewise agree that the Executive, without
limitation, shall be entitled to injunctive relief to enforce the obligations of
the Company and the Association under this Agreement.
17. Successors and Assigns.
a. This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Company and the Association which
shall acquire, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets or stock
of the Company and the Association.
b. Since the Company and the Association are contracting for the unique
and personal skills of Executive, Executive shall be precluded from
assigning or delegating his rights or duties hereunder without first
obtaining the written consent of the Company and the Association.
18. No Mitigation. Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment.
19. Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48
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hours after mailing at any general or branch United States Post Office, by
registered or certified mail, postage prepaid, addressed to the Company and/or
the Association at their principal business offices and to Executive at his home
address as maintained in the records of the Company and the Association.
20. No Plan Created by this Agreement. Executive, the Company and the
Association expressly declare and agree that this Agreement was negotiated among
them and that no provision or provisions of this Agreement are intended to, or
shall be deemed to, create any plan for purposes of the Employee Retirement
Income Security Act or any other law or regulation, and each party expressly
waives any right to assert the contrary. Any assertion in any judicial or
administrative filing, hearing, or process that such a plan was so created by
this Agreement shall be deemed a material breach of this Agreement by the party
making such an assertion.
21. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
22. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Tennessee shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
23. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
24. Headings. Headings contained herein are for convenience of reference
only.
25. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof, other than written agreements with respect to specific plans, programs
or arrangements described in Sections 5 and 6. The parties agree that this
Agreement supercedes and replaces in its entirety the Agreement between the
Executive, the Association and the Company dated October 8, 2001.
26. Required Provisions. In the event any of the provisions of this
Section 26 are in conflict with the terms of this Agreement, this Section 26
shall prevail.
a. The Association may terminate Executive's employment at any time, but
any termination by the Association, 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 7 hereinabove.
b. If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Association's affairs by a
notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. (S)1818(e)(3) or (g)(1); the Association'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 Association may in its discretion: (i)
pay Executive all or part of the compensation withheld
11
while their contract obligations were suspended; and (ii) reinstate
(in whole or in part) any of the obligations which were suspended.
c. If Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order
issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. (S)1818(e)(4) or (g)(1), all obligations of
the Association 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 Association is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. (S)1813(x)(1) all obligations
of the Association 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 Association 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 of the OTS (or his designee), the FDIC or the
Resolution Trust Corporation, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Association
under the authority contained in Section 13(c) of the Federal Deposit
Insurance Act, 12 U.S.C. (S)1823(c); or (ii) by the Director of the
OTS (or his designee) at the time the Director (or his designee)
approves a supervisory merger to resolve problems related to the
operations of the Association or when the Association 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 compliance with 12
U.S.C. (S)1828(k) and 12 C.F.R. Section 545.121 and any rules and
regulations promulgated thereunder.
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
Attest: JEFFERSON BANCSHARES, M.H.C.
/s/ Xxxx X. Xxxxxxxx By: /s/ Xxxx X. XxXxxxx, Xx.
--------------------------- -----------------------------------------
Chairman of the Board of Directors
Attest: JEFFERSON FEDERAL SAVINGS AND
LOAN ASSOCIATION
/s/ Xxxx X. Xxxxxxxx By: /s/ Xxxx X. XxXxxxx, Xx.
--------------------------- -----------------------------------------
Chairman of the Board of Directors
Witness: EXECUTIVE
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxxx X. Xxxxx
--------------------------- ----------------------------------------------
Xxxxxxxx X. Xxxxx
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