Amendment #1 To The Monarch Community Bancorp, Inc. Employment Agreement
Exhibit 10.11
Amendment #1 To The
Monarch Community Bancorp, Inc.
Monarch Community Bancorp, Inc.
THIS AMENDMENT (the “Amendment”), is made and entered into as of December 31, 2008 by and
between Monarch Community Bancorp, Inc., on its behalf and on behalf of all of its subsidiaries and
affiliated corporations or associations (“Affiliates”), located at 000 Xxxxx Xxxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000 (collectively referred to as the “Company”), and Xxxxxx X. Xxxxxx
(“Executive”).
WHEREAS, the Executive serves as President and Chief Executive Officer of the Company and the
Company’s Affiliate, Monarch Community Bank (the “Bank”) pursuant to the terms of an employment
agreement dated September 20, 2006 (the “Agreement”); and
WHEREAS, the Company and the Executive wish to amend the Agreement to satisfy the requirements
of Section 409A of the Internal Revenue Code; and
WHEREAS, except as otherwise provided in this Amendment, the Agreement shall continue in full
force and effect.
NOW, THEREFORE, in consideration of the premises and of the covenants herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, the Bank and the Executive agree to amend the Agreement as follows:
| 1. | Section 6 of the Agreement is amended to provide as follows: |
6. Expenses. During the Term of this Agreement, Executive shall be entitled to receive prompt
reimbursement of all reasonable expenses incurred (in accordance with the policies and
procedures of the Company and the Bank) in performing services under this Agreement, provided
that Executive properly accounts for expenses in accordance with the policies of the Company
and the Bank. Reimbursement under this section will be paid no later than March 15 of the
calendar year following the calendar year in which the expenses were incurred.
| 2. | Section 7(d) of the Agreement is amended to provide as follows: |
(d) Conferences and Continuing Education. Executive shall be permitted to attend
appropriate industry-wide and statewide banking conventions and professional development
meetings necessary to keep Executive abreast of developments in the industry. All reasonable
expenses of attending such meetings, including the attendance by Executive’s spouse, shall be
at the expense of the Company.
Reimbursement under this section will be paid no later than March 15 of the calendar year
following the calendar year in which the expenses were incurred.
| 3. | Section 10(b) of the Agreement is amended to provide as follows: |
(b) Termination of Employment by the Board of Directors Without Cause. In the
event the Board of Directors terminates Executive’s employment without “Cause” (as defined in
Section 10(d)) prior to a Change of Control (as defined in Section 10(e)), Executive shall be
entitled to a lump sum payment, within 30 days after Executive’s termination of employment, in
an amount equal to his Base Salary and to continue to participate in the Company’s health care
plan for one (1) year following the date of termination of employment. In the event, after the
termination of Executive’s employment, coverage of Executive under the Company’s health care
plan does not qualify under the federal tax laws for the same tax treatment as coverage of
active employees of the Company, or if the insurer for the health care plan prohibits
Executive’s continued participation in such plan, the Company shall, in its discretion, either
provide substantially equivalent health care coverage to Executive or pay to Executive a lump
sum payment in an amount in cash equal to the cost to the Company of Executive’s continued
participation in the Company’s health care plan no later than the March 15 of the calendar
year following the calendar year in which Executive’s employment terminates.
| 4. | Section 10(e)(i) of the Agreement is amended to provide as follows: |
(i) If, following a Change of Control, this Agreement is terminated by the Company without
Cause or by Executive for “Good Reason,” Executive shall be entitled to a lump sum payment,
within 30 days after Executive’s termination of employment, in an amount equal to his Base
Salary and to continue to participate in the Company’s health care plan for a period of two (2)
years following such termination. In the event of termination by Executive for Good Reason,
Executive shall provide notice to the Chairman of the Board of Directors specifying the facts
and circumstances surrounding his belief that “Good Reason” exists and the Company shall have
the right to cure those matters within thirty (30) days from the date of notice. In the event,
after the termination of Executive’s employment, coverage of Executive under the Company’s
health care plan does not qualify under the federal tax laws for the same tax treatment as
coverage of active employees of the Company, or if the insurer for the health care plan
prohibits Executive’s continued participation in such plan, the Company shall, in its
discretion, either provide substantially equivalent health care coverage to Executive or pay to
Executive a lump sum payment in an amount in cash equal to the cost to the Company of
Executive’s continued participation in the Company’s health care plan no later than the March
15 of the calendar year following the calendar year in which Executive’s employment terminates.
| 5. | A new Section 20 is added to the Agreement to provide as follows: |
20. Compliance with Section 409A. Notwithstanding any provision of this Agreement to the
contrary, if the Executive is considered a Specified Employee as of
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his employment termination as determined pursuant to Section 409A of the Code, payments under this Agreement that are made
upon such termination of employment may not, to the extent required by Section 409A of the
Code, commence to Executive until the six month anniversary of the date that Executive’s
employment with the Company terminates and the first payment to Executive shall be a lump sum
payment of the amount that would have otherwise been payable to Executive had a delay in
payment not been required pursuant to Section 409A of the Code. The remainder of the payments
to Executive will be made in accordance with the Company’s or its successor’s regular payroll
practices then in effect. The parties intend, however, that this Agreement shall be exempt from
the 409A as either a separation pay arrangement under Treas. Reg. 1.409A-1(b)(9) or a short
term deferral of compensation under 1.409A-1(b)(4).
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above
written.
| MONARCH COMMUNITY BANCORP, INC. | EXECUTIVE | |||||||||
By: |
/s/ Xxxxxxx X. Xxxx | /s/ Xxxxxx X. Xxxxxx | ||||||||
| Xxxxxxx X. Xxxx | XXXXXX X. XXXXXX | |||||||||
| Its: | Chairman | |||||||||
Witness:
|
/s/ Xxxxxx X. Xxx Xxxxx | |||||||
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