EMPLOYMENT AGREEMENT
This Agreement is made effective as of April 16, 1998 by and between
Liberty Federal Bank (the "Bank"), a federally-chartered stock savings bank,
with its principal administrative office at Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000 and Kenne P. Bristol (the "Executive"). Any reference to "Company" herein
shall mean Alliance Bancorp, the stock holding company parent of the Bank or any
successor thereto.
WHEREAS, the Bank wishes to assure itself of the continued services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to continue to serve in the employ of the
Bank 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. POSITION AND RESPONSIBILITIES
During the period of his employment hereunder, Executive agrees to serve as
President and Chief Executive Officer of the Bank and the Company. During said
period, Executive also agrees to serve, if elected, as an officer and director
of any subsidiary or affiliate of the Bank. Failure to reelect Executive as
President and Chief Executive Officer of the Company and the Bank without the
consent of the Executive during the term of this Agreement (except for any
termination for Cause, as defined herein) shall constitute a breach of this
Agreement.
2. TERMS AND DUTIES
(a) The period of Executive's employment under this Agreement shall begin
as of the date first above written and shall continue for a period of thirty-six
(36) full calendar months thereafter. Commencing on the first anniversary date
of this Agreement, and continuing at each anniversary date thereafter, the
Agreement shall renew for an additional year such that the remaining term shall
be three (3) years; provided, however, if written notice of nonrenewal is
provided to Executive at least ten (10) days and not more than thirty (30) days
prior to any anniversary date, the employment of Executive hereunder shall cease
at the end of twenty-four (24) months following such anniversary date. Prior to
each notice period for non-renewal, the disinterested members of the Board of
Directors of the Bank ("Board") will conduct a performance evaluation and review
of the Executive for purposes of determining whether to extend the Agreement,
and the results thereof shall be included in the minutes of the Board's meeting
and communicated to Executive.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote substantially all his business time,
attention, skill, and efforts to the faithful performance of his duties
hereunder including activities and services related to the organization,
operation and management of the Bank; provided, however, that, with the approval
of the Board, as evidenced by
a resolution of such Board, from time to time, Executive may serve, or continue
to serve, on the boards of directors of, and hold any other offices or positions
in, business companies or business organizations, which, in such Board's
judgment, will not present any conflict of interest with the Bank, or materially
affect the performance of Executive's duties pursuant to this Agreement (for
purposes of this Section 2(b), Board approval shall be deemed provided as to
service with any such business companies or organizations that Executive was
serving as of the date of this Agreement). See Attached Exhibit.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b). The Bank
shall pay Executive as compensation a salary of not less than $260,000 per year
("Base Salary"). Such Base Salary shall be payable biweekly. During the period
of this Agreement, Executive's Base Salary shall be reviewed at least annually.
Such review shall be conducted by a Committee designated by the Board, and the
Board may increase, but not decrease (except a decrease that is generally
applicable to all employees), Executive's Base Salary (any increase in Base
Salary shall become the "Base Salary" for purposes of this Agreement). In
addition to the Base Salary provided in this Section 3(a), the Bank shall
provide Executive at no cost to Executive with all such other benefits as are
provided uniformly to permanent full-time employees of the Bank. Base Salary
shall include any amounts of compensation deferred by Executive under qualified
and nonqualified plans maintained by the Bank.
(b) The Bank will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Bank will not, without
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites which would adversely affect Executive's rights or benefits
thereunder, except as to any changes that are applicable to all employees or as
reasonably or customarily available. Without limiting the generality of the
foregoing provisions of this Subsection (b), Executive will be entitled to
participate in or receive benefits under any employee benefit plans including
but not limited to, retirement plans, supplemental retirement plans, pension
plans, profit-sharing plans, health-and-accident plans, medical coverage or any
other employee benefit plan or arrangement made available by the Bank in the
future to its senior executives and key management employees, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Executive will be entitled to incentive compensation
and bonuses as provided in any plan of the Bank in which Executive is eligible
to participate (and he shall be entitled to a pro rata distribution under any
incentive compensation or bonus plan as to any year in which a termination of
employment occurs, other than termination for Cause). Nothing paid to the
Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which the Executive is entitled under this Agreement.
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Bank shall pay or reimburse Executive for all reasonable travel
and other reasonable expenses incurred by Executive performing his obligations
under this Agreement and may provide such
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additional compensation in such form and such amounts as the Board may from time
to time determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following: (i) the
termination by the Bank or the Company of Executive's full-time employment
hereunder for any reason other than following a Change in Control, as defined in
Section 5(a) hereof, or termination for Cause, as defined in Section 8 hereof,
or upon Retirement as defined in Section 7 hereof, or for disability as set
forth in Section 6 hereof; and (ii) Executive's resignation from the Bank's
employ, upon any (A) failure to elect or reelect or to appoint or reappoint
Executive as President and Chief Executive Officer of the Company or the Bank,
or to nominate (and as to the Bank, elect) Executive to the Board of Directors
of Bank and the Company, unless consented to by the Executive, (B) a material
change in Executive's function, duties, or responsibilities, which change would
cause Executive's position to become one of lesser responsibility, importance,
or scope from the position and attributes thereof described in Sections 1 and 2
above, to which Executive has not agreed in writing (and any such material
change shall be deemed a continuing breach of this Agreement), (C) a relocation
of Executive's principal place of employment to a location outside of the
Chicago metropolitan area, or a material reduction in the benefits and
perquisites, including Base Salary, to the Executive from those being provided
as of the effective date of this Agreement (except for any reduction that is
part of an employee-wide reduction in pay or benefits), (D) a liquidation or
dissolution of the Bank or the Company, or (E) material breach of this Agreement
by the Bank. Upon the occurrence of any event described in clauses (ii) (A),
(B), (C), (D) or (E) above, Executive shall have the right to elect to terminate
his employment under this Agreement by resignation upon not less than thirty
(30) days prior written notice given within a reasonable period of time (not to
exceed, except in case of a continuing breach, four calendar months) after the
event giving rise to said right to elect, which termination by Executive shall
be an Event of Termination. No payments or benefits shall be due to Executive
under this Agreement upon the termination of Executive's employment except as
provided in Section 4 or 5 hereof.
(b) Upon the occurrence of an Event of Termination, the Bank shall pay
Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, a cash amount equal to the greater of the payments due for the
remaining term of the Agreement, or three (3) times the sum of: (i) the highest
annual rate of Base Salary paid to Executive at any time under this Agreement,
and (ii) the greater of (x) the average annual cash bonus paid to Executive with
respect to the three completed fiscal years prior to the Event of Termination,
or (y) the cash bonus paid to Executive with respect to the fiscal year ended
prior to the Event of Termination; provided however, that if the Bank is not in
compliance with its minimum capital requirements or if such payments would cause
the Bank's capital to be reduced below its minimum capital requirements, such
payments shall be deferred until such time as the Bank is in capital compliance.
At the election of the Executive, which election is to be made annually by
January 31 of each year and is irrevocable for the year in which made (and once
payments commence), such payments shall be made in a lump sum or paid quarterly
during the
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remaining term of the agreement following the Executive's termination. In the
event that no election is made, payment to the Executive will be made on a
quarterly basis during the remaining term of the Agreement. Such payments shall
not be reduced in the event the Executive obtains other employment following
termination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to
be continued life, medical, dental and disability coverage substantially
comparable, as reasonably or customarily available, to the coverage maintained
by the Bank for Executive prior to his termination, except to the extent such
coverage may be changed in its application to all Bank employees or is not
available on an individual basis to a terminated employee. Such coverage shall
cease thirty-six (36) months following the Event of Termination.
5. CHANGE OF CONTROL.
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Bank or the Company, as set forth below.
For purposes of this Agreement, a "Change in Control" of the Bank or the Company
shall mean an event, which occurs subsequent to the date of this Agreement, of a
nature that: (i) would be required to be reported by the Company in response to
Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx"); or (ii) results in a change in control of the Bank or the
Company within the meaning of the Home Owners' Loan Act and the Rules and
Regulations promulgated by the Office of Thrift Supervision (or its predecessor
agency) thereunder; or (iii) without limitation, such a Change in Control shall
be deemed to have occurred at such time as (a) any "person" (as that term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities representing 20% or more of a class of securities of
the Bank or Company ordinarily having the right to vote at the election of
directors ("Voting Securities"), except for any securities of the Bank purchased
by the Company in connection with the conversion of the Bank to the stock form
and any securities purchased by the Bank's employee stock ownership plan and
trust established with the approval of the Incumbent Board (as defined below),
and except that an investment advisor shall not be deemed to acquire the voting
stock of its advisee if the advisor votes the stock only upon instruction from
the beneficial owner, and does not provide the beneficial owner with advice
concerning the voting of such stock; or (b) individuals who constitute the Board
on the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by the Company's shareholders was approved by the same
Nominating Committee serving under an Incumbent Board, shall be, for purposes of
this clause (b), considered as though he were a member of the Incumbent Board;
or (c) a merger, consolidation or sale of all or substantially all the assets of
the Bank or the Company occurs and the Bank or the Company is not the surviving
entity.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control shall have occurred or the Board has determined that a Change
in Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c) and (d) of this Section 5 upon his subsequent termination of
employment at any time during the term of this Agreement (regardless of whether
such termination results from his resignation or his dismissal), unless such
termination is (A) because of his death or Retirement, or, (B) for Disability.
Upon a Change in Control, and for
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a period of one year thereafter, Executive shall have the right to elect to
terminate his employment with the Bank, for any reason, and receive the benefits
provided for in this Section 5.
(c) Upon the occurrence of a Change in Control followed by the termination
of Executive's employment by the Bank or the Company (including a termination
referred to in the last sentence of Section 5(b) above), the Executive, or, in
the event of his subsequent death (subsequent to such termination), his
beneficiary or beneficiaries, or his estate, as the case may be, shall receive
as severance pay or liquidated damages, or both, an amount equal to three times
the sum of: (i) the highest annual rate of Base Salary paid to Executive at any
time under this Agreement, and (ii) the greater of (x) the average annual cash
bonus paid to Executive with respect to the three completed fiscal years prior
to the termination, or (y) the cash bonus paid to Executive with respect to the
fiscal year ended prior to the termination. The foregoing severance/liquidated
damages payment(s), as well as all other benefits described in this Agreement
that would be payable upon a Change of Control, shall be made to the Executive's
surviving spouse, or if no surviving spouse, to his estate, in the event that
the Company or the Bank enters into an agreement as to a Change in Control of
the Company or the Bank, and Executive shall die after such agreement is
executed but prior to consummation of the Change in Control, which payments
shall commence upon, and shall be contingent upon, the actual consummation of
the Change in Control. At the election of the Executive pursuant to Section
4(b), such payment may be made in a lump sum or paid quarterly during the
thirty-six (36) months following the Executive's termination.
(d) Upon the occurrence of a Change in Control followed by the termination
of Executive's employment, the Bank will cause to be continued life, health and
disability insurance coverage substantially comparable, as reasonable or
customarily available, to the coverage maintained by the Bank or the Company for
Executive prior to his severance, except to the extent such coverage is changed
in its application to all employees of the Bank or not available on an
individual basis to a terminated employee. Such coverage shall cease thirty-six
(36) months from the date of Executive's termination of employment.
6. TERMINATION FOR DISABILITY.
(a) If, as a result of Executive's incapacity due to physical or mental
illness, he shall have been absent from his duties with the Holding Company on a
full-time basis for six (6) consecutive months, and within thirty (30) days
after written notice of potential termination is given he shall not have
returned to the full-time performance of his duties, the Bank may terminate
Executive's employment for "Disability.
(b) The Bank will pay Executive, as disability pay, a bi-weekly payment
equal to the 3/4 of the Executive's bi-weekly rate of Base Salary on the
effective date of such termination. These disability payments shall commence on
the effective date of Executive's termination and will end on the earlier (i)
the date Executive returns to the full-time employment of the Bank in the same
capacity as he was employed prior to his termination for Disability and pursuant
to an employment agreement between Executive and the Bank; (ii) Executive's
full-time employment by another employer; (iii) Executive attaining the age of
65; or (iv) Executive's death. The disability pay shall be reduced by the
amount, if any, paid to the Executive under any plan of the Bank or the Company
providing disability benefits to the Executive.
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(c) The Bank will cause to be continued life, medical, dental and
disability coverage substantially comparable, as reasonably or customarily
available, to the coverage maintained by the Bank for Executive prior to his
termination for Disability, except to the extent such coverage may be changed in
its application to all Bank employees or not available on an individual basis to
a terminated employee. This coverage shall cease upon the earlier of (i) the
date Executive returns to the full-time employment of the Bank in the same
capacity as he was employed prior to his termination for Disability and pursuant
to an employment agreement between Executive and the Bank; (ii) Executive's
full-time employment by another employer; (iii) Executive attaining the age of
65; or (iv) Executive's death.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during which
Executive is incapable of performing his duties hereunder by reason of temporary
disability.
7. TERMINATION UPON RETIREMENT.
Termination by the Bank of the Executive based on "Retirement" shall mean
termination by Executive at age 65 or in accordance with any retirement policy
established with Executive's consent with respect to him. Upon termination of
Executive upon Retirement, no amounts or benefits shall be due Executive under
this Agreement, and the Executive shall be entitled to all benefits under any
retirement plan of the Bank and other plans to which Executive is a party.
8. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any 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. In determining incompetence, the
acts or omissions shall be measured against standards generally prevailing in
the savings institution and commercial banking industry. For purposes of this
paragraph, no act or failure to act on the part of Executive shall be considered
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's action or omission was in the
best inter est of the Bank. Notwithstanding the foregoing, Executive shall not
be deemed to have been Terminated for Cause unless and until there shall have
been delivered to him a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the members of the Board at a meeting of the
Board called and held for that purpose (after reasonable notice to Executive and
an opportunity for him, together with counsel, to be heard before the Board),
finding that in the good faith opinion of the Board, Executive was guilty of
conduct justifying Termination for Cause and specifying the particulars thereof
in detail. The Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause. Any non-vested stock
options granted to Executive under any stock option plan of the Bank, the
Company or any subsidiary or affiliate thereof, shall become null and void
effective upon Executive's receipt of Notice of Termination for Cause pursuant
to Section 9 hereof, and shall not be exercisable by Executive at any time
subsequent to such Termination for Cause (unless it is determined in arbitration
that grounds for termination of Executive for Cause did not exist, in which
event all terms of the options as of the date of termination shall apply, and
any time periods for exercising such options shall commence from the date of
resolution in arbitration).
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9. NOTICE.
(a) Any purported termination by the Bank for Cause shall be communicated
by Notice of Termination to the Executive. For purposes of this Agreement, a
"Notice of Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated. If,
within thirty (30) days after any Notice of Termination for Cause is given, the
Executive notifies the Bank or the Company that a dispute exists concerning the
termination, the parties shall promptly proceed to arbitration. Notwithstanding
the pendency of any such dispute, the Bank and the Company may discontinue to
pay Executive compensation until the dispute is finally resolved in accordance
with this Agreement. If it is determined that Executive is entitled to
compensation and benefits under Section 4 or 5 of this Agreement, the payment of
such compensation and benefits by the Bank and Company shall commence
immediately following the date of resolution by arbitration, with interest due
Executive on the cash amount that would have been paid pending arbitration (at
the prime rate as published in the Wall Street Journal from time to time).
(b) Any other purported termination by the Bank or by Executive shall be
communicated by a Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in detail the facts and circumstances claimed to provide a basis
for termination of employment under the provision so indicated. "Date of
Termination" shall mean the date of the Notice of Termination. If, within
thirty (30) days after any Notice of Termination is given, the party receiving
such Notice of Termination notifies the other party that a dispute exists
concerning the termination, the parties shall promptly proceed to arbitration as
provided in Section 19 of this Agreement. Notwithstanding the pendency of any
such dispute, the Bank shall continue to pay the Executive his Base Salary, and
other compensation and benefits in effect when the notice giving rise to the
dispute was given (except as to termination of Executive for Cause). In the
event of the voluntary termination by the Executive of his employment, which is
disputed by the Bank, and if it is determined in arbitration that Executive is
not entitled to termination benefits pursuant to this Agreement, he shall return
all cash payments made to him pending resolution by arbitration, with interest
thereon at the prime rate as published in the Wall Street Journal from time to
time if it is determined in arbitration that Executive's voluntary termination
of employment was not taken in good faith and not in the reasonable belief that
grounds existed for his voluntary termination.
10. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 10 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank as may reasonably be required by the Bank in connection
with any litigation in which it or any of its subsidiaries or affiliates is, or
may become, a party.
(c) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Bank and affiliates
thereof, as it may exist from time to time,
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is a valuable, special and unique asset of the business of the Bank. Executive
will not, during or after the term of his employment, disclose any knowledge of
the past, present, planned or considered business activities of the Bank or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever (except for such disclosure as may be required to
be provided to the Office of Thrift Supervision, the Federal Deposit Insurance
Corporation, or other federal banking agency with jurisdiction over the Bank or
Executive). Notwithstanding the foregoing, Executive may disclose any knowledge
of banking, financial and/or economic principles, concepts or ideas which are
not solely and exclusively derived from the business plans and activities of the
Bank, and Executive may disclose any information regarding the Bank or the
Company which is otherwise publicly available. In the event of a breach or
threatened breach by the Executive of the provisions of this Section 10, the
Bank will be entitled to an injunction restraining Executive from disclosing, in
whole or in part, the knowledge of the past, present, planned or considered
business activities of the Bank or affiliates thereof, or from rendering any
services to any person, firm, corporation, other entity to whom such knowledge,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein will be construed as prohibiting the Bank from pursuing any other
remedies available to the Bank for such breach or threatened breach, including
the recovery of damages from Executive.
11. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive
and, if such amounts and benefits due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to the Executive
of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
13. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
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14. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
15. REQUIRED REGULATORY PROVISIONS.
(a) The Bank's Board of Directors may terminate the Executive's employment
at any time, but any termination by the Bank's Board of Directors, 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 8 hereinabove.
(b) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 U.S.C. (S)(S) 1818(e)(3)) or 8(g) (12 U.S.C. (S) 1818(g)) of
the Federal Deposit Insurance Act (the "FDI Act"), as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, the Bank'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 Bank may in its discretion (i) pay the Executive all or part of
the compensation withheld while their contract obligations were suspended and
(ii) reinstate (in whole or in part) any of the obligations which were
suspended.
(c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 U.S.C. (S)(S) 1818(e)) or 8(g) (12 U.S.C. (S) 1818(g)) of the
FDI Act, as amended by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, all obligations of the Bank 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 Bank is in default as defined in Section 3(x) (12 U.S.C. (S)
1813(x)(1)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Bank 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 Bank 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, at the time
Federal Deposit Insurance Corporation ("FDIC") or the Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of
the Bank; or (ii) by the Office of Thrift Supervision ("OTS") at the time the
OTS or its District Director approves a supervisory merger to resolve problems
related to the operations of the Bank or when the Bank is determined by the OTS
or FDIC 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.
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(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 USC
Section 1828(k) and any regulations promulgated thereunder.
16. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
17. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Illinois
but only to the extent not superseded by federal law.
19. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the employee within the
Chicago metropolitan area, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
20. PAYMENT OF LEGAL FEES.
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in the Executive's favor.
21. INDEMNIFICATION.
The Bank and the Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, and shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under federal law against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved
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by reason of his having been a director or officer of the Bank or the Company
(whether or not he continues to be a director or officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements (such settlements must be approved by the
Board of Directors of the Bank or the Company, as appropriate), provided,
however, neither the Bank nor Company shall be required to indemnify or
reimburse the Executive for legal expenses or liabilities incurred in connection
with an action, suit or proceeding arising from any illegal or fraudulent act
committed by the Executive.
22. SUCCESSOR TO THE BANK.
The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Company, expressly
and unconditionally to assume and agree to perform the Bank's obligations under
this Agreement, in the same manner and to the same extent that the Bank would be
required to perform if no such succession or assignment had taken place.
11
ALLIANCE BANCORP
EXECUTIVE AGREEMENT
WHEREAS, Kenne P. Bristol ("Executive") and Alliance Bancorp (the
"Company") desire to enter into this Executive Agreement to supplement the
Employment Agreement entered into between the Executive and Liberty Federal
Bank, (the "Bank"), the wholly-owned subsidiary of the Company, as of April 16,
1998 (hereinafter referred to as the "Employment Agreement"); and
WHEREAS, there is an accelerating trend of consolidation among companies
within the banking industries; and
WHEREAS, tax law provisions relating to "golden parachute payments" could
have the effect of reducing the benefits otherwise provided to Executive under
the Employment Agreement as a result of a change in control of the Company or
the Bank; and
WHEREAS, the Board of Directors believes that it is in the best interests
of the Company and its shareholders for the Company to enter into the Executive
Agreement with the Executive to provide the benefits that would be provided
under the Employment Agreement to Executive in the event of a change in control
of the Company or the Bank, without any reduction because of tax code
"penalties" or excise taxes relating to a change in control; and
WHEREAS, the Company desires to enter into an Executive Agreement for the
purpose of providing further incentive to the Executive to achieve successful
results in the management and the operation of the Company.
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. In each calendar year that Executive is entitled to receive payments
or benefits under the provisions of the Employment Agreement and this Executive
Agreement, the independent accountants of the Company shall determine if an
excess parachute payment (as defined in Section 4999 of the Internal Revenue
Code of 1986, as amended, and any successor provision thereto, (the "Code"))
exists. Such determination shall be made after taking any reductions permitted
pursuant to Section 280G of the Code and the regulations thereunder. Any amount
determined to be an excess parachute payment after taking into account such
reductions shall be hereafter referred to as the "Initial Excess Parachute
Payment". As soon as practicable after a Change in Control, the Initial Excess
Parachute Payment shall be determined. Upon the Date of Termination following a
Change in Control, the Company shall pay Executive, subject to applicable
withholding requirements under applicable state or federal law, an amount equal
to:
(i) twenty (20) percent of the Initial Excess Parachute Payment (or
such other amount equal to the tax imposed under Section 4999 of
the Code), and
(ii) such additional amount (tax allowance) as may be necessary to
compensate Executive for the payment by Executive of state and
federal income and excise taxes on the payment provided under
Clause (i). In computing such tax allowance, the payment to be
made under Clause (i) shall be multiplied
by the "gross up percentage" ("GUP"). The GUP shall be determined
as follows:
Tax Rate
GUP = ---------------
1- Tax Rate
The Tax Rate for purposes of computing the GUP shall be the highest
marginal federal and state income and employment-related tax rate, including any
applicable excise tax rate, applicable to the Executive in the year in which the
payment under Clause (i) is made.
2. Notwithstanding the foregoing, if it shall subsequently be determined
in a final judicial determination or a final administrative settlement to which
Executive is a party that the excess parachute payment as defined in Section
4999 of the Code, reduced as described above, is different from the Initial
Excess Parachute Payment (such different amount being hereafter referred to as
the "Determinative Excess Parachute Payment") then the Company's independent
accountants shall determine the amount (the "Adjustment Amount") the Executive
must pay to the Company or the Company must pay to the Executive in order to put
the Executive (or the Company, as the case may be) in the same position as the
Executive (or the Company, as the case may be) would have been if the Initial
Excess Parachute Payment had been equal to the Determinative Excess Parachute
Payment. In determining the Adjustment Amount, the independent accountants
shall take into account any and all taxes (including any penalties and interest)
paid by or for Executive or refunded to Executive or for Executive's benefit.
As soon as practicable after the Adjustment Amount has been so determined, the
Company shall pay the Adjustment Amount to Executive or the Executive shall
repay the Adjustment Amount to the Company, as the case may be.
3. In each calendar year that Executive receives payments or benefits
under the Employment Agreement, Executive shall report on his state and federal
income tax returns such information as is consistent with the determination made
by the independent accountants of the Company as described above. The Company
shall indemnify and hold Executive harmless from any and all losses, costs and
expenses (including without limitation, reasonable attorney's fees, interest,
fines and penalties) which Executive incurs as a result of so reporting such
information. Executive shall promptly notify the Company in writing whenever
the Executive receives notice of the institution of a judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under Section
4999 of the Code of any amount paid or payable under this Executive Agreement is
being reviewed or is in dispute. The Company shall assume control at its
expense over all legal and accounting matters pertaining to such federal tax
treatment (except to the extent necessary or appropriate for Executive to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable pursuant to this contract) and Executive shall cooperate fully with
the Company in any such proceeding. The Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Company may have
in connection therewith without prior consent to the Company.
2
