EXHIBIT 10.2
CHANGE IN CONTROL AGREEMENT
FOR
DEARBORN SAVINGS ASSOCIATION, F.A.
This AGREEMENT is made effective as of ______________ __, 2004 by and
between Dearborn Savings Association, F.A., a federally chartered stock savings
association (the "Association"), and _______________________ (the "Executive").
Any reference to "Company" herein shall mean DSA Financial Corporation, or any
successor thereto.
WHEREAS, the Association recognizes the substantial contribution the
Executive has made to the Association and wishes to protect his position
therewith for the period provided in this Agreement; and
WHEREAS, the Executive has been elected to, and has agreed to serve in the
position of ___________________ for the Association, a position of substantial
responsibility.
NOW, THEREFORE, in consideration of the contribution of the Executive, and
upon the other terms and conditions hereinafter provided, the parties hereto
agree as follows:
1. TERM OF AGREEMENT
The term of this Agreement shall be deemed to have commenced 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 Board of
Directors of the Association (the "Board") may extend the Agreement for an
additional year. The Board will conduct a performance evaluation 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. If the
Executive is also a director then he or she shall abstain from any and all
voting with respect to the extension of the term of such Executive's Agreement.
2. PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL
(a) Upon the occurrence of a Change in Control of the Association or the
Company (as herein defined) followed at any time during the term of this
Agreement by the voluntary or involuntary termination of the Executive's
employment, other than for Cause, as defined in Section 2(c) hereof, the
provisions of Section 3 shall apply. Upon the occurrence of a Change in Control,
the Executive shall have the right to elect to voluntarily terminate his
employment at any time during the term of this Agreement following any demotion,
loss of title, office or significant authority, reduction in his annual
compensation or benefits, or relocation of his principal place of employment by
more than 30 miles from its location immediately prior to the Change in Control.
(b) A "Change in Control" of the Association or the Company shall mean a
change in control of a nature that: (i) would be required to be reported 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
Association or the Company within the meaning of the Home Owners' Loan Act, as
amended, and applicable rules and regulations promulgated thereunder
(collectively, the "HOLA") as in effect at the time of the Change in Control; or
(iii) without limitation such a Change in Control shall be deemed to have
occurred at such time as (a) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of Company's
outstanding securities, except for any securities purchased by the Association's
employee stock ownership plan or trust; 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 stockholders 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 plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Association or the Company or similar
transaction in which the Association or Company is not the surviving institution
occurs; or (d) a proxy statement soliciting proxies from stockholders of the
Company, by someone other than the current management of the Company, seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Company or similar transaction with one or more corporations as a result of
which the outstanding shares of the class of securities then subject to the plan
are to be exchanged for or converted into cash or property or securities not
issued by the Company; or (e) a tender offer is made for 25% or more of the
voting securities of the Company and the shareholders owning beneficially or of
record 25% or more of the outstanding securities of the Company have tendered or
offered to sell their shares pursuant to such tender offer and such tendered
shares have been accepted by the tender offeror.
(c) The Executive shall not have the right to receive termination
benefits pursuant to Section 3 hereof upon Termination for Cause. The term
"Termination for Cause" shall mean termination because of the Executive's
intentional failure to perform stated duties, personal dishonesty, incompetence,
willful misconduct, any breach of fiduciary duty involving personal profit,
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses) or final cease and desist order, or any material breach of any
material provision of this Agreement. In determining incompetence, the acts or
omissions shall be measured against standards generally prevailing in the
savings institution industry. For purposes of this paragraph, no act or failure
to act on the part of the 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 interest of the
Association. Notwithstanding the foregoing, the 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 three-fourths of the members of the Board at a meeting of the Board called
and held for that purpose (after reasonable notice to the Executive and an
opportunity for him,
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together with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, the 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 stock options granted to Executive
under any stock option plan of the Association, 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 4 hereof, and shall not
be exercisable by Executive at any time subsequent to such Termination for
Cause.
3. TERMINATION
(a) Upon the occurrence of a Change in Control, followed at any time
during the term of this Agreement by the involuntary termination of the
Executive's employment other than for Termination for Cause, or voluntary
termination for one or more of the reasons set forth in Section 2(a) hereof, the
Association shall be obligated to pay the Executive, or in the event of his
subsequent death, his beneficiary or beneficiaries, or his estate, as the case
may be, as severance pay, a sum equal to [THREE] times the sum of (i) base
salary, and (ii) highest rate of bonus awarded to the Executive during the prior
three years, subject to applicable withholding taxes. If the Executive has been
employed by the Association for less than one year, then the severance pay shall
be a sum equal to [THIRTY-SIX] times the highest monthly salary, and [THREE]
times the highest rate of bonus awarded to Executive.
(b) Upon the occurrence of a Change in Control of the Association
followed at any time during the term of this Agreement by the Executive's
involuntary termination of employment other than for Termination for Cause, or
voluntary termination for one or more of the reasons set forth in Section 2(a)
hereof, the Association shall cause to be continued life, medical and dental
coverage substantially identical to the coverage maintained by the Association
for the Executive prior to his severance. Such coverage and payments shall cease
upon expiration of [THIRTY-SIX (36)] months.
(c) Upon the occurrence of a Change in Control, the Executive will have
such rights as specified in any other employee benefit plan with respect to
options and such other rights as may have been granted to the Executive under
such plans.
(d) At the election of the Executive, which election is to be made on an
annual basis during the month of January, and which election is irrevocable for
the year in which made and upon the occurrence of the voluntary or involuntary
termination of the Executive in accordance with Section 2(a) of this Agreement,
any cash severance payments shall be made in a lump sum, or paid bi-weekly
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 with the Association.
(e) Notwithstanding the preceding paragraphs of this Section 3, in no
event shall the aggregate payments or benefits to be made or afforded to the
Executive under said paragraphs (the "Termination Benefits") constitute an
"excess parachute payment" under Section 280G of the Code or any successor
thereto, and in order to avoid such a result, Termination Benefits will
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be reduced, if necessary, to an amount (the "Non-Triggering Amount"), the value
of which is one dollar ($1.00) less than an amount equal to three (3) times the
Executive's "base amount", as determined in accordance with said Section 280G.
The allocation of the reduction required hereby among Termination Benefits
provided by the preceding paragraphs of this Section 3 shall be determined by
the Executive.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Association or by the Executive
shall be communicated by Notice of Termination to the other party hereto. 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 the Executive's employment under
the provision so indicated.
(b) "Date of Termination" shall mean (A) if the Executive's employment
is terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the Notice
of Termination (which, in the case of a Termination for Cause, shall be
immediate). Except as set forth below in paragraph (c), in no event shall the
Date of Termination exceed 30 days from the date Notice of Termination is given.
(c) 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, except upon the occurrence of
a Change in Control and voluntary termination by the Executive, in which case
the date of termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected)
and provided further that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Association will continue
to pay the Executive his full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, Base Salary) and
continue him as a participant in all compensation, benefit and insurance plans
in which he was participating when the notice of dispute was given, until the
earlier of 120 days from the date of the Notice of Termination or the date upon
which the dispute is finally resolved in accordance with this Agreement. Amounts
paid under this Section are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement. Notwithstanding the foregoing, no compensation or benefits shall
be paid to the Executive in the event the Executive is Terminated for Cause. In
the event that such Termination for Cause is found to have been wrongful or such
dispute is otherwise decided in the Executive's favor, the Executive shall be
entitled to receive all compensation and benefits which accrued for up to a
period of nine months after the Termination for Cause.
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5. SOURCE OF PAYMENTS
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the
Association. 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 Association are not timely paid or provided by the
Association, such amounts and benefits shall be paid or provided by the Company.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Association and the
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 the Executive
is subject to receiving fewer benefits than those available to him without
reference to this Agreement.
7. 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,
the Executive, the Association and their respective successors and assigns.
8. 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 or as to any act other than that
specifically waived.
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9. REQUIRED PROVISIONS
(a) The Association may terminate the Executive's employment at any
time. The Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Cause as defined in Section 2(c)
hereinabove.
(b) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Association's affairs by a
notice served under Section 8(e)(3) (12 USC ss.1818(e)(3)) or 8(g) (12 USC
ss.1818(g)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, the Association's
obligations under this contract shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Association may in its discretion (i) pay 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 Association's affairs by an order issued
under Section 8(e) (12 USC ss.1818(e)) or 8(g) (12 USC ss. 1818(g)) of the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all obligations of the Association under
this contract shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Association is in default as defined in Section 3(x) (12 USC
ss.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 Association under this contract shall terminate as of the date of default,
but this paragraph shall not affect any vested rights of the contracting
parties.
(e) All obligations of the Association under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Association, (i) by the Federal
Deposit Insurance Corporation ("FDIC"), at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Association under the
authority contained in Section 13(c) (12 USC ss.1823(c)) of the Federal Deposit
Insurance Act, as amended by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989; or (ii) when the Association is determined by the 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.
(f) Notwithstanding anything herein contained to the contrary, any
payments to the Executive by the Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the
regulations promulgated thereunder in 12 C.F.R. Part 359.
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10. 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.
11. 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.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Indiana, unless
preempted by federal law as now or hereafter in effect.
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 fifty
(50) miles from the location of the Association, 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
subject to Section 3(c) hereof, the 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.
13. PAYMENT OF LEGAL FEES
All reasonable legal fees paid or incurred by the Executive pursuant to
any dispute or question of interpretation relating to this Agreement shall be
paid or reimbursed by the Association if the Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement.
14. SUCCESSOR TO THE ASSOCIATION
The Association 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 Association, expressly and
unconditionally to assume and agree to perform the Association's obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment had
taken place.
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15. SIGNATURES
IN WITNESS WHEREOF, the Association has caused this Agreement to be
executed by its duly authorized officer, and the Executive has signed this
Agreement, on the day and date first above written.
ATTEST: DEARBORN SAVINGS ASSOCIATION, F.A.
By:
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ATTEST: DSA FINANCIAL CORPORATION
By:
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WITNESS: EXECUTIVE
By:
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