EXHIBIT 10.14
EMPLOYMENT AGREEMENT
AGREEMENT, dated this 3rd day of December 2004, between CFS Bancorp, Inc.,
a Delaware Corporation (the "Company"), a federally chartered savings bank, and
Xxxxx Xxxxxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of Citizens Financial
Services, FSB ("Bank") a wholly owned subsidiary of the Company; and
WHEREAS, the Company and the desires to be ensured of the Executive's
continued active participation in the business of the Bank and the Company; and
WHEREAS, the Company desires to enter into an agreement with the Executive
with respect to his employment therewith; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's agreeing to remain in the employ
of the Company, the parties desire to specify the severance benefits which shall
be due the Executive by the Company in the event that his employment with the
Company is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings set
forth below for the purposes of this Agreement:
a) Agreement Date. The "Agreement Date" shall be the date first set forth
above.
b) Base Salary. "Base Salary" shall have the meaning set forth in Section
4(a) hereof.
c) Cause. Termination of the Executive's employment for "Cause" shall mean
termination because of personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order or
material breach of any provision of this Agreement.
d) Change in Control. "Change in Control" means the occurrence of any of
the following: (i) an event that would be required to be reported in response to
Item 501 of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
the 1934 Act, or any successor thereto, whether or not any class of securities
of the Company (as defined below) is registered under the 1934 Act; (ii) any
"person" is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of securities of the Company representing
20%
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or more of the combined voting power of the Company's then outstanding
securities except for any securities purchased by the Company; or (iii) during
any period of thirty-six consecutive months during the term of an Option,
individuals who at the beginning of such period constitute the Board of
Directors of the Company cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by stockholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
i) For purposes of the definition of "Change in Control," a Person or
group of Persons does not include the CFS Bancorp, Inc. Employee
Stock Ownership Plan Trust which forms a part of the CFS Bancorp,
Inc. Employee Stock Ownership Plan (the "ESOP"), or any other
employee benefit plan, subsidiary or affiliate of the Company, and
the outstanding shares of common stock of the Company, on a fully
diluted basis, include all shares owned by the ESOP, whether
allocated or unallocated to the accounts of participants,
thereunder.
ii) For purposes of the definition of "Change in Control," the term
"Person" means any natural person, proprietorship, partnership,
corporation, limited liability company, organization, firm,
business, joint venture, association, trust or other entity and any
government agency, body or authority.
e) Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
f) Company. "Company" means CFS Bancorp, Inc. a Delaware Corporation, its
subsidiaries, successors and assigns for purposes of this Agreement.
g) Definitive Agreement. A "Definitive Agreement" is an agreement entered
into by the Company which is intended to result in a Change of Control of the
Company and which has been publicly announced on a Form 8-K filed by the
Company.
h) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
i) Disability. Termination by the Company of the Executive's employment
based on "Disability" shall mean termination because of any physical or mental
impairment which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Company or the Company
or, if no such plan applies, which would qualify the Executive for disability
benefits under the Federal Social Security System.
j) Good Reason. Termination by the Executive of the Executive's employment
for "Good Reason" shall mean termination by the Executive within twenty-four
(24) months following a Change in Control of the Company based on:
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i) Without the Executive's express written consent, the failure to
elect or to re-elect or to appoint or to re-appoint the Executive to
the office of Senior Vice President of the Bank or a material
adverse change made by the Company in the Executive's functions,
duties or responsibilities as Senior Vice President of the Company;
ii) Without the Executive's express written consent, a reduction by
either of the Employers in the Executive's Base Salary as the same
may be increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a reduction in the package of
fringe benefits provided to the Executive, taken as a whole;
iii) The principal executive office of either of the Employers is
relocated more than twenty miles from Dyer, Indiana;
iv) Any purported termination of the Executive's employment for
Disability or Retirement which is not effected pursuant to a Notice
of Termination satisfying the requirements of paragraph (l) below;
v) The failure by the Company to obtain the assumption of and agreement
to perform this Agreement by any successor; or
vi) Notification to the Executive pursuant to Section 2(b) hereof that
his term of employment will not be extended.
k) IRS. "IRS" shall mean the Internal Revenue Service.
l) Notice of Termination. Any purported termination of the Executive's
employment by the Company for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Company's termination of Executive's employment for Cause, which
shall be effective immediately; and (iv) is given in the manner specified in
Section 9 hereof.
m) Retirement. "Retirement" shall mean voluntary termination by the
Executive after the Executive attains the age sixty-five (65).
n) Trigger Event. A "Trigger Event" shall be the execution of a
Definitive Agreement.
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2. TERM OF EMPLOYMENT.
a) As of the Agreement Date, the Company will employ the Executive to
perform such executive and managerial duties at such times and in such manner as
the company may from time to time direct. Unless otherwise provided herein, the
Executive acknowledges and agrees that the Executive serves at the will of the
Company, and that this Agreement shall not be construed as a contract for
employment for a specific term.
b) Following a Trigger Event, as defined in Section (n), the employment
term of the Executive shall be a period of one year commencing as of the date
thereof (the "Trigger Date"), subject to earlier termination as provided herein.
Beginning on a Trigger Date, and on each day thereafter, the term of this
Agreement shall be extended for a period of one day in addition to the
then-remaining term, provided that the Company has not given notice to the
Executive in writing at least 60 days prior to such day that the term of the
Agreement shall not be extended further. Reference herein to the term of this
Agreement shall refer to both such initial term and such extended terms.
c) During his employment with the Company, the Executive shall perform
such executive services for the Company as may be consistent with his titles and
from time to time assigned to him by the Company's Board of Directors. The
Executive further agrees to serve without additional compensation as an officer
and director of any of the Company's subsidiaries and agrees that any amounts
received from such corporation may be offset against the amounts due hereunder.
In addition, it is agreed that the Company may assign the Executive to one of
its subsidiaries for payroll purposes.
3. LOYALTY, CONFIDENTIALITY AND NON-COMPETITION
a) The Executive shall devote his full time and best efforts to the
performance of his duties while employed with the Company. During such time, the
Executive shall not, at any time or place, either directly or indirectly engage
in any business or activity in competition with the business affairs or
interests of the Company or be a director, officer or consultant to any bank,
savings and loan association, credit union, thrift, savings bank, or similar
institution in the Chicago CMSA.
b) For purposes of this Agreement, directly or indirectly engaging in any
business activity in competition with the business or affairs of the Company
includes, but is not limited to, serving or acting as an owner, partner, agent,
beneficiary, or employee of any person, firm or corporate entity so engaged;
except that nothing herein contained shall be deemed to prevent or limit the
right of employee to invest any of his surplus funds in the capital stock or
other securities of any corporation whose stock or securities are publicly owned
or are regularly traded on any public exchange, nor shall anything herein
contained be deemed to prevent employee from investing or limit employee's right
to invest his surplus funds in real estate.
c) All information relating to business of the Company including, but not
limited to, that business obtained or serviced by the Company and all customer
listings, contact lists, expiration
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cards, asset reports, instruments, documents, papers and other material used in
connection with such business, shall be the exclusive property of the Company.
The Executive shall keep all such information and material confidential; none of
it will be copied, reproduced or duplicated without the express written
permission of the Company, and Executive shall return all material containing
such information to the Company upon its request or upon termination of
employment. Executive also agrees that he will not utilize the confidential
information or trade secrets of the Company, either directly or indirectly, for
any purposes except performance of his responsibilities and in furtherance of
the Company's business, unless otherwise expressly authorized by the Company in
writing in advance.
d) Executive agrees that, during his employment, and for a period of one
(1) year following the date of his involuntary termination of employment for
Cause, or his voluntary termination without Good Reason, the Executive:
i) will not solicit any of the Company's past or current customers or
clients for the benefit of anyone other than Company or its
affiliates;
ii) will not divulge the names of any of the Company's past or then
current customers to any other person, corporation or entity; and
iii) will not, either directly or indirectly, induce or solicit any
person to leave the employ of the Company.
4. COMPENSATION AND BENEFITS.
a) The Company shall compensate and pay the Executive for his services
during the term of this Agreement at a minimum base salary of $139,000 per year
("Base Salary"), which may be increased from time to time in such amounts as may
be determined by the Board of Directors of the Company and may not be decreased
without the Executive's express written consent. In addition to his Base Salary,
the Executive shall be entitled to receive during the term of this Agreement
such bonus payments as may be determined by the Board of Directors of the
Employers.
b) During his employment with the Company, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the Company,
to the extent commensurate with his then duties and responsibilities, as fixed
by the Board of Directors. The Company shall not make any changes in such plans,
benefits or privileges which would adversely affect the Executive's rights or
benefits thereunder, unless such change occurs pursuant to a program applicable
to all executive officers of the Company and does not result in a
proportionately greater adverse change in the rights of or benefits to the
Executive as compared with any other executive officer of the Company. Nothing
paid to the Executive under any plan or arrangement presently in effect or made
available in the future shall be deemed to be in lieu of the salary payable to
the Executive pursuant to Section 4(a) hereof.
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c) During his employment with the Company, the Executive shall be entitled
to paid annual vacation in accordance with the policies as established from time
to time by the Board of Directors. The Executive shall not be entitled to
receive any additional compensation from the Employers for failure to take a
vacation, nor shall the Executive be able to accumulate unused vacation time
from one year to the next, except to the extent authorized by the Board of
Directors.
d) During the Executive's employment with the Company, the Company will
provide suitable office space, desk, chairs, filing cabinets, telephones and
other usual and customary office furniture, fixtures and equipment adequate for
the efficient performance of the duties assigned to the Executive.
e) During the Executive's employment with the Company, the Company will
provide to the Executive, at the Employer's cost, all perquisites which other
Senior Vice Presidents of the Company are generally entitled to receive,
including the payment of his annual dues at a health club.
f) During the term of this Agreement, the Company will provide to
Executive the use of an automobile of the Company's choice and will replace the
automobile with a new one at no less often than once every four years. The
Company will pay all automobile operating expenses incurred by Executive in the
performance of an Executive's company duties. The Company will procure and
maintain in force an automobile liability policy for the automobile with
coverage, including Executive, in the minimum amount of $1,000,000 combined
single limit on bodily injury and property damage.
5. EXPENSES. The Company shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Company, including, but
not by way of limitation, automobile expenses and other traveling expenses, and
all reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Board of
Directors of the Company. If such expenses are paid in the first instance by the
Executive, the Company shall reimburse the Executive therefor.
6. TERMINATION.
a) The Company shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and the Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
b) In the event that (i) the Executive's employment is terminated by the
Company following the occurrence of a Trigger Event for other than Cause,
Disability, Retirement or the Executive's death or (ii) such employment is
terminated by the Executive (a) due to a material breach of this Agreement by
the Company, which breach has not been cured within fifteen (15) days after a
written notice of non-compliance has been given by the Executive to the
Employers, or
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(b) for Good Reason, then the Company shall, subject to the provisions of
Section 7 hereof, if applicable:
A) pay to the Executive, in either twelve (12) equal monthly
installments beginning with the first business day of the month
following the Date of Termination or in a lump sum within five
business days of the Date of Termination (at the Executive's
election), a cash severance amount equal to the Executive's Base
Salary plus cash incentive bonuses earned during the previous year,
regardless of when paid, and
B) maintain and provide for a period ending at the earlier of (i) the
expiration of the remaining term of employment pursuant hereto prior
to the Notice of Termination or (ii) the date of the Executive's
full-time employment by another employer (provided that the
Executive is entitled under the terms of such employment to benefits
substantially similar to those described in this subparagraph (B)),
at no cost to the Executive, the Executive's continued participation
in all group insurance, life insurance, health and accident
insurance, disability insurance and other employee benefit plans,
programs and arrangements offered by the Company in which the
Executive was entitled to participate immediately prior to the Date
of Termination excluding stock plans and bonuses, provided, however,
that in the event that the Executive's participation in any plan,
program or arrangement as provided in this subparagraph is barred,
or during such period any such plan, program or arrangement is
discontinued or the benefits thereunder are materially reduced, the
Company shall arrange to provide the Executive with benefits
substantially similar to those which the Executive was entitled to
receive under such plans, programs and arrangements immediately
prior to the Date of Termination.
7. WITHHOLDING. All payments required to be made by the Company hereunder
to the Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Company may reasonably
determine should be withheld pursuant to any applicable law or regulation.
8. ASSIGNABILITY. The Company may assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Company may hereafter merge or consolidate
or to which the Company may transfer all or substantially all of its assets, if
in any such case said corporation, bank or other entity shall by operation of
law or expressly in writing assume all obligations of the Company hereunder as
fully as if it had been originally made a party hereto, but may not otherwise
assign this Agreement or its rights and obligations hereunder. The Executive may
not assign or transfer this Agreement or any rights or obligations hereunder.
9. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
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a)To the Company: Corporate Secretary
Citizens Financial Services, FSB
000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
b)To the Executive: Xxxxx Xxxxxxxxx
0000 Xxxx Xxxxx
Xxxx, XX 00000
10. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Company to sign on its
behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
11. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of Indiana.
12. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Company to create a trust of any kind to fund any benefits which may
be payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Company hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Company.
13. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, the Executive's employment and the terms of this
Agreement is subject to continued approval by the Company's regulators. In the
event of the Executive's termination of employment with the Company for Cause or
by virtue of order by a count or regulatory body, all employment relationships
and managerial duties with the Bank or the Company shall immediately cease.
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Furthermore, following such termination, the Executive will not, directly or
indirectly, influence or participate in the affairs or the operations of the
Company.
17. PAYMENT OF COSTS AND LEGAL FEES. In the event any dispute or
controversy arising under or in connection with this Agreement is resolved in
favor of any party, whether by judgment, arbitration or settlement, the party
shall be entitled to the payment of all legal fees incurred by the prevailing
party in resolving such dispute or controversy.
18. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between
the Company and the Executive with respect to the matters agreed to herein. All
prior agreements between the Company and the Executive with respect to the
matters agreed to herein are hereby superseded and shall have no force or
effect.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
Attest: CFS BANCORP, INC.
/s/ Xxxxxx X. Xxxxxxxx By:
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/s/ Xxxxxx X. Xxxxxx
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EXECUTIVE
/s/ Xxxxx Xxxxxxxxx
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