Exhibit 10.1
EARLY RETIREMENT AND CONSULTING AGREEMENT
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This Early Retirement and Consulting Agreement (the
"Agreement") is made this 7th day of January, 2005, by and among
Xxxxxx X. Xxxxx (the "Executive"), GS Financial Corp., a
Louisiana corporation (the "Company"), and its wholly owned
subsidiary, Guaranty Savings and Homestead Association, a
Louisiana chartered savings and loan association (the
"Association").
WITNESSETH:
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WHEREAS, the Executive currently serves as Chairman,
President and Chief Executive Officer of the Company and the
Association (collectively, the "Employers"); and
WHEREAS, the Executive currently is a party to an agreement
with both the Company and the Association, dated as of February
13, 1997 (the "Employment Agreement"), setting forth the terms
and conditions of his employment; and
WHEREAS, the Executive and the Employers believe it to be in
the Company's, the Association's and the Executive's best
interests that the Executive take early retirement from his
positions as President and Chief Executive Officer of the
Employers but to continue to serve as a director and Chairman of
the Employers and to be available on a consulting basis; and
WHEREAS, the parties desire that this Agreement will
supersede the Employment Agreement and serve as the full and
final settlement of all obligations of the Employers to the
Executive relating to the Executive's employment by the
Employers;
NOW, THEREFORE, in consideration of the mutual premises and
covenants contained herein, and intending to be legally bound,
the parties agree as follows:
1. Early Retirement; Termination of Employment Agreement;
Modification of Duties.
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(a) As of January 7, 2005 (the "Retirement Date"), the
Executive hereby retires from his positions as President and
Chief Executive Officer of the Employers. The Executive will
continue to serve as a director the Company and the Association
for the remainder of the term to which he was elected and as
Chairman of the Board of Directors of the Company and the
Association until his successor is elected promptly after the
Company's 2005 Annual Meeting of Shareholders.
(b) As of the Retirement Date, the Employment
Agreement, by the mutual agreement of the parties hereto, shall
be terminated and be of no further force and effect and the
Executive shall be entitled to the rights and payments set forth
herein in lieu of any rights and payments under the Employment
Agreement. The Executive shall no longer be considered an
officer or employee of the Employers or any of their respective
subsidiaries as of the Retirement Date. This Agreement shall
have no effect on Executive's service as a director of the
Company or of the Association.
(c) The parties hereto agree that, from the Retirement
Date through January 7, 2008 (the "Consulting Period"), the
Executive shall provide certain consulting services to the
Company and the Association as described below.
2. Consultancy.
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(a) During the Consulting Period, the parties agree
that the Executive will provide his personal advice and counsel
to the Company and the Association in connection with their
businesses including, but not limited to, consulting with the
Company and the Association regarding matters reasonably related
to the Company and the Association and identified by the Board of
Directors and reasonably acceptable to the Executive with respect
to the transition to a new President and Chief Executive Officer
as well as other matters regarding the operations of the Company
and the Association and relationships with customers and
stockholders as may be identified by the Board of Directors (the
"Consulting Services"), subject to the terms and conditions set
forth herein. The Executive shall provide such Consulting
Services as may be reasonably requested by the Board of Directors
of the Company from time to time at mutually agreeable and
reasonable times, provided, however, that the Executive will not
be required to provide Consulting Services of more than 60 hours
per month during the Consulting Period. Such Consulting Services
may be provided at reasonable times either in person,
telephonically, electronically or by correspondence as the
Company and the Executive may agree. The Executive shall not be
required to remain as a director of the Employers during the
Consulting Period. If the Board utilizes the Executive for less
than 60 hours per month it will not be grounds for termination of
the consultancy.
(b) During the Consulting Period, the Executive shall
be treated as an independent contractor and shall not be deemed
to be an executive or employee of the Company, the Association or
any other affiliate of the Company.
(c) In the event the Board of Directors determines the
Executive has substantially failed to provide the Consulting
Services required by the Agreement, it shall provide written
notice to the Executive, in accordance with Section 13 hereof,
which notice shall set forth in reasonable detail the facts and
circumstances that are the basis for the Board's determination.
Termination of the consultancy can only occur if the Executive
fails to respond to a request for Consulting Services.
Employers' disagreement with Executive's opinions and
recommendations shall not constitute grounds for termination.
The Executive shall have 30 days from the date of the notice to
cure the failure or to respond in writing to the Board's
determination. If the Executive shall have failed to return to
full performance of his Consulting Services within the 30-day
period or failed to adequately respond to the facts and
circumstances set forth in the written notice, the Board may give
the Executive written notice, in accordance with Section 13
hereof, of its intention to terminate the consultancy effective
on the 30th day after the date of written notice. As of the
effective date of termination of the consultancy, the obligation
of the Employers to pay the remaining Consulting Fee and other
benefits pursuant to Sections 3 and 4(a) shall cease.
3. Consulting Fee. During the Consulting Period, the Executive
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shall be entitled to receive a fee (the "Consulting Fee") in an
amount equal to $468,000, payable in 36 monthly
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installments of $13,000. In the event of Executive's death during the
Consulting Period, the unpaid portion of the Consulting Fee shall be
paid to the estate of the Executive in a lump sum, with such payment
to be discounted to present value using the most recent Moody's
Average Corporate Bond Yield as published by Xxxxx'x Investors
Services, not later than 30 days from the date of Executive's
death.
4. Other Benefits.
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(a) During the Consulting Period, the Employers shall
provide continued life, medical, long-term disability and dental
coverage substantially identical to the then-current coverage
maintained by the Employers for the full time employees of the
Association. In the event of the Executive's death during the
Consulting Period, the Employers shall, through January 7, 2008,
provide to the Executive's spouse continued medical and dental
coverage substantially identical to the then-current coverage
maintained by the Employers for the full time employees of the
Association. After the Consulting Period, the Executive shall be
permitted to participate as a retiree in the Association's group
medical insurance plan on the same terms and conditions as all
other retired Association employees.
(b) Within 30 days of the Retirement Date, Employers
shall transfer title and ownership to the Executive of the 2003
Ford Expedition automobile which is currently leased by the
Employers and provided to the Executive for his use.
(c) In light of the Consulting Fee which is to be paid
to the Executive, the parties agree that the Executive will not
receive fees for his service as a director during the Consulting
Period. The Executive will be entitled to all other benefits
afforded to other directors, including continued participation
and vesting in the Company's stock option plan and recognition
and retention plan. The parties acknowledge and agree that there
are currently 10,316 restricted stock awards which have been
previously granted to the Executive under the Company's 1997
Recognition and Retention Plan (the "Plan") which vest on an
installment basis over the next three years in accordance with
the terms of the grant. The parties agree that Executive's
service on each vesting date as a Non-Employee Director of the
Company shall satisfy the service requirements set forth in the
Plan. In the event of the Executive's death prior to the vesting
of the restricted stock awards, the parties acknowledge and agree
that any remaining unvested awards will vest upon the Executive's
death and will promptly be delivered to the Executive's estate or
designated beneficiary.
(d) The Employers agree to indemnify, defend and hold
the Executive harmless against any judicial or administrative
proceeding, or threatened proceeding, whether civil or criminal,
against the Executive arising out of the Executives position as
an employee, officer and/or director of the Employers to the
fullest extent authorized by the Employers charter, bylaws or
other governing instrument and applicable law and regulations.
If Executive wishes to claim indemnification under this Agreement
he shall upon learning of such claim, action or proceeding
promptly notify Employers thereof. Employers shall have the right
at their own expense to assume the defense thereof.
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5. Non-Compete; Solicitation of Customers; Use of Customer
Lists, etc.
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(a) The Executive agrees that during the period
commencing on the Retirement Date through January 6, 2006 (the
"Non-Compete Period"), the Executive will not, directly or
indirectly, as director, officer, employee, principal or agent,
manage, operate, consult with or be employed by any insured
depository institution, trust company or parent holding company
of any such institution or company which transacts business in
the greater New Orleans market area (hereinafter a "competing
institution"), provided, however, that this provision shall not
prohibit the Executive from owning bonds, preferred stock or up
to 15% of the outstanding shares of common stock of any such
entity. In the event the Executive takes a position as a
director, officer or employee with a competing institution after
the expiration of the Non-Compete Period, the Executive shall
give prompt written notice to the Company and shall immediately
resign as a director of the Company and the Association.
(b) The Executive acknowledges that, except as
required by law or in his own good faith use in any proceeding,
he has no right personally to use or disclose to any person, firm
or corporation, information concerning any customer list,
business secrets or confidential financial information of the
Employers that he knew was intended by the Employers to be
confidential and that he did not have reason to believe had been
made public (collectively, "Confidential Information").
Accordingly, the Executive covenants and agrees that he shall not
use or permit the use of any Confidential Information, and shall
not divulge any Confidential Information to any person, firm or
corporation, except as may be required by applicable law arising
out of his employment with or participation in the affairs of the
Employers. Further, Executive agrees that, through the
Consulting Period, he will not solicit any current customer of
the Employers, for the purpose or intent to provide or sell to
such customers any banking, financial or business services or
products on behalf of any person, company or entity other than
the Employers or solicit any current employee of the Employers
for employment by a competing institution without the express
written consent of the Employers; provided, nothing herein shall
preclude you from hiring any such person who responds to a
general public advertisement placed by you.
(c) During the Consulting Period, except for
nominations, proposals or other matters submitted to the
Company's stockholders by action of a majority of the Company's
directors, the Executive shall not, directly or indirectly, make
or in any way participate in, any solicitation of proxies or
consents (whether or not relating to the election of directors)
within the meaning of Rule 14a-1 under the Securities Exchange
Act of 1934, as amended, or demand a copy of the Company stock
ledger, list of stockholders or otherwise act alone or in concert
with others to seek control of the Company.
6. Confidentiality; Non-Disparagement.
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(a) No disclosure of the contents of this Agreement
shall be made by either party to this Agreement without the prior
written consent of the other party; provided that such disclosure
(including disclosures contained in Company press releases,
requisite disclosure in the Company's reports filed with the
Securities and Exchange Commission and other regulatory
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filings) may be made as required in accordance with federal securities
law and regulations or as required by any final court order.
(b) Executive agrees not to make, either directly or
indirectly, or cause to be made, either directly or indirectly,
by any other person or entity, any statement or comment, whether
oral, written, electronic or otherwise, or to take any other
action which disparages or criticizes the Employers, their
present or former directors, officers, employees, management,
practices or services, or which disrupts or impairs or could
disrupt or impair the operations of the Employers; provided,
however, that nothing herein shall impair or limit the ability of
the Executive, in his capacity as a director, to communicate with
other directors during meetings of the Employers' Boards of
Directors. The Employers agree not to make, either directly or
indirectly, or cause to be made, either directly or indirectly,
by any other person or entity, or permit to be made by any
director, officer or representative of the Employers, any
statement or comment, whether oral, written, electronic or
otherwise, or to take any other action which disparages or
criticizes the Executive.
7. Remedies
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(a) The parties agree that monetary damages for the
breach of the agreements in Section 5 and Section 6 hereof may be
impossible to determine or may be an inadequate remedy;
therefore, it is agreed that the Employers or the Executive may
adjudicate any such alleged breach in a court of equity and that
such court shall have the power to grant injunctive or other
appropriate equitable relief. The parties also agree that it may
be impossible for the Employers or the Executive to show
immediate irreparable harm; therefore, it is agreed that the
court may enter a temporary injunction or restraining order
without the necessity of proof of immediate and irreparable harm
to the Employers or the Executive and without the entry of any
bond or security.
(b) In any adjudication for breach of the agreements
in Section 5 and Section 6, the prevailing party shall be paid
the costs, expenses and reasonable attorneys' fees incident to
any such adjudication by the other party as part of the judgment
of the court.
8. Release of the Employers and Related Parties.
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(a) For, and in consideration of the commitments made herein by
the Employers, including specifically the release in Section 9
below, the Executive, for himself and for his heirs, successors
and assigns, does hereby release completely and forever discharge
the Employers and their respective subsidiaries, affiliates,
stockholders, attorneys, officers, directors, agents, successors
and assigns, and any other party associated with the Employers
(the "Released parties"), to the fullest extent permitted by
applicable law, from any and all claims, rights, demands,
actions, liabilities, obligations, causes of action of any and
all kinds, nature and character whatsoever, known or unknown, in
any way connected with his employment by the Employers or
termination thereof; provided that no such waiver shall be
effective with respect to Executives rights related to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
or the Executive Retirement Income Security Act of 1974
("ERISA").
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(b) The Executive hereby specifically and unconditionally
releases the Released parties from any and all claims which the
Executive may have against any of them and which arose on or
before the date of this Agreement under the Age Discrimination in
Employment Act (the "ADEA"), including, but not limited to, any
claim attributable to the Employers' solicitation of the
Executive's consent to the terms of this Agreement, and further
acknowledges and represents that:
(i) the Executive waives the Executive' claims under ADEA
knowingly and voluntarily in exchange for the commitments made
herein by the Employers, and that the benefits provided thereby
constitute consideration of value to which the Executive would
not otherwise have been entitled;
(ii) the Executive has been advised in writing by the Employers
to consult an attorney in connection with this Agreement;
(iii) the Executive has been given a period of 21 days within
which to consider the terms hereof;
(iv) the Executive may revoke the waiver of ADEA claims set forth
in this Section 8 for a period of seven (7) days following the
execution of this Agreement and the Executive's waiver of ADEA
claims hereunder shall not become effective until the revocation
period has expired;
(v) if the Executive revokes the waiver of ADEA claims in
accordance with subparagraph (iv) above, the Executive shall
cease to receive the payments and benefits specified in Sections
3 and 4 hereof, but such revocation shall not be effective with
respect to the remainder of this Agreement and the consideration
received by the Executive prior to the revocation shall be valid
and adequate consideration with respect to the remainder of this
Agreement; and
(vi) this Agreement complies in all respects with Section 7(f) of
ADEA, the waiver provisions of the Older Workers Benefit
Protection Act.
(c) Notwithstanding the foregoing, the Executive does not
release the Employers from claims arising out of any breach of
this Agreement.
9. General Release of the Executive. For, and in consideration
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of the commitments made herein by the Executive, including
specifically the release in Section 8 above, the Employers, for
themselves, and for their respective subsidiaries, affiliates,
stockholders, attorneys, officers, directors, agents, successors
and assigns do hereby release completely and forever discharge
the Executive and his heirs, successors and assigns, to the
fullest extent permitted by applicable law, from any and all
claims, rights, demands, actions, liabilities,
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obligations, causes of action of any kinds, nature and character
whatsoever, known or unknown, in any way connected with the Executive's
position as an officer, employee or director of the Employers.
Notwithstanding anything in the foregoing to the contrary, the
Employers do not release the Executive from claims arising out of
any breach of this Agreement.
10. Representation. The Employers and the Executive represent
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that they have reviewed this Agreement, and that each of them is
fully aware of the content of this Agreement and of its legal
effect, and acknowledge that this is a legally valid and binding
obligation of the parties.
11. Withholding. The Employers may make such provisions as they
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deem appropriate for the withholding pursuant to federal or state
income tax laws of such amounts as the Employers determine they
are required to withhold in connection with the payments to be
made pursuant to this Agreement.
12. Amendment and Waiver. The terms of this Agreement may not
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be modified other than in a writing signed by the parties. No
term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against 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 for the future or as to any act other
than that specifically waived.
13. Notices. All notices, demands, consents or other
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communication required or permitted hereunder shall be in writing
and by electronic mail and shall be deemed to have been given
when: (i) personally delivered, including by electronic mail, or
(ii) sent postage prepaid by registered or certified mail, return
receipt requested, such receipt showing delivery to have been
made, or (iii) sent overnight by prepaid receipt courier
addressed as follows:
If to the Executive: Xxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
E-mail: XXxxxxXXX@xxx.xxx
If to the Employers: Secretary to the Board of Directors
GS Financial Corp.
0000 Xxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Each party hereto shall promptly notify the other of any
change in address.
14. Entire Agreement. This Agreement incorporates the entire
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understanding among the parties relating to the subject matter
hereof, recites the sole consideration for the promises exchanged
and supersedes any prior agreements between the Employers and the
Executive with respect to the subject matter hereof. In reaching
this Agreement, no party has relied upon any representation or
promise except those set forth herein.
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15. Invalid Provisions: If any provision of this Agreement is
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held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such
provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid or
unenforceable provision had never compromised a part of this
Agreement, and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance
from this Agreement.
16. Bind and Inure. This Agreement shall be binding upon and
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inure to the benefit of the Executive and the Employers and their
respective heirs and/or successors and permitted assigns.
17. Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Louisiana,
except to the extent that applicable federal law preempts the
laws of State of Louisiana.
IN WITNESS WHEREOF, the Company and the Association have
caused this Agreement to be executed by their duly authorized
representatives and the Executive has executed this Agreement,
all as of the day and year first above written.
WITNESSES:
GS FINANCIAL CORP.
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxx
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GUARANTY SAVINGS AND HOMESTEAD
ASSOCIATION
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxx
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XXXXXX X. XXXXX
/s/ Xxxxxx X. Xxxx /s/ Xxxxxx X. Xxxxx
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