EXHIBIT 10.6
FORM OF EMPLOYMENT AGREEMENT
This Agreement is made by and between First Clover Leaf Bank, a federal
savings bank (the "Bank"), with its principal office in Edwardsville, Illinois,
and Xxxxxxx XxXxxxxx ("Executive") and is effective as of the effective date
(the "Effective Date") of the "Merger," as that term is defined in that certain
Agreement and Plan of Reorganization dated as of February 3, 2006 by and between
First Federal Financial Services, MHC, First Federal Financial Services, Inc.,
First Clover Leaf Financial Corp., Clover Leaf Bank ("CLB") and Clover Leaf
Financial Corp. ("CLFC")(the "Merger Agreement"). References herein to the
"Company" mean First Clover Leaf Financial Corp., a Maryland corporation that
owns 100% of the common stock of the Bank on the Effective Date. The Company is
a signatory to this Agreement for the sole purpose of guaranteeing the Bank's
performance hereunder.
WHEREAS, Executive has served as an officer of CLB, which was merged
with and into the Bank as of the Effective Date pursuant to the Merger
Agreement; and
WHEREAS, the Bank wishes to assure itself of the services of Executive
as an officer of the Bank following the Merger for the period provided in this
Agreement; and
WHEREAS, Executive agrees that this Agreement supersedes, replaces and
terminates her Change in Control Agreement dated as of December 31, 2003 with
CLB and CLFC.
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.
Executive agrees to serve as the Chief Financial Officer of the Company
and the Bank. In that position, Executive shall be responsible for [TO come].
Executive also agrees to serve, if appointed or elected, as an officer and
director of any subsidiary or affiliate of the Bank.
2. TERM AND DUTIES.
(a) The period of Executive's employment under this Agreement shall
begin as of the Effective Date first above written and shall continue for a
period of twelve (12) 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 twelve (12) full calendar months; unless a written
notice of non-renewal (a "Non-Renewal Notice") is provided to Executive at least
sixty (60) days and not more than thirty (30) days prior to any anniversary
date, that the term of this Agreement shall not so renew. On an annual basis
prior to the deadline for the notice period referenced above, the Chief
Executive Officer shall conduct a performance review of Executive for purposes
of determining whether to provide a Non-Renewal Notice.
(b) During the period of her employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence approved by the Chief Executive Officer, Executive
shall devote substantially all her business time,
attention, skill, and efforts to the faithful performance of her duties
hereunder including activities and services related to the organization,
operation and management of the Bank; provided, however, that, with the approval
of the Chief Executive Officer, 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 the Chief Executive Officer'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, it
being understood that membership in and service on boards or committees of
social, religious, charitable or similar organizations does not require
approval.
3. COMPENSATION, BENEFITS 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 $_______ per year
("Base Salary"). Such Base Salary shall be payable biweekly, or with such other
frequency as officers and employees are generally paid. During the period of
this Agreement, Executive's Base Salary shall be reviewed at least annually.
Such review shall be conducted by the Chief Executive Officer, and the Bank may
increase, but not decrease (except a decrease that is generally applicable to
all employees) Executive's Base Salary (with any increase in Base Salary to
become "Base Salary" for purposes of this Agreement). In addition to the Base
Salary, 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) 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 insurance plans, medical coverage or any other employee
benefit plan or arrangement made available by the Bank or the Company 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 participate in any
incentive compensation and bonus plans offered by the Bank or the Company in
which Executive is eligible to participate. Nothing paid to Executive under any
such plan or arrangement will be deemed to be in lieu of other compensation to
which Executive is entitled under this Agreement.
(c) In addition to the Base Salary, the Bank or the Company shall
pay or reimburse Executive for all reasonable travel and other reasonable
expenses incurred by Executive performing her obligations under this Agreement
and may provide such additional compensation in such form and such amounts as
the Chief Executive Officer may from time to time determine. The Bank shall
reimburse Executive for her ordinary and necessary business expenses, including,
without limitation, fees for memberships in such clubs and organizations as
Executive and the Chief Executive Officer shall mutually agree are necessary and
appropriate for business purposes, and travel and entertainment expenses,
incurred in connection with the performance of her duties under this Agreement.
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4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein
defined) during Executive's term of employment under this Agreement, the
provisions of this Section 4 shall apply. As used in this Agreement, an "Event
of Termination" shall mean and include any of the following:
(i) the termination by the Bank of Executive's full-time
employment hereunder for any reason other than
termination governed by Section 5 (Termination for
Cause) or termination governed by Section 6 (termination
due to Disability or death); or
(ii) Executive's resignation from the Bank's employ for any
of the following reasons:
(A) the failure to elect or reelect or to appoint or
reappoint Executive to the position set forth
under Section 1;
(B) a material change in Executive's functions,
duties, or responsibilities with the Bank, which
change would cause Executive's position to
become one of lesser responsibility, importance,
or scope from the position and attributes
thereof described in Section 1;
(C) a relocation of Executive's principal place of
employment by more than thirty (30) miles from
its location at the Effective Date of this
Agreement;
(D) a material reduction in the benefits and
perquisites to Executive from those being
provided as of the Effective Date of this
Agreement, other than an employee-wide reduction
in pay or benefits;
(E) a liquidation or dissolution of the Company or
the Bank; or
(F) a material breach of this Agreement by the Bank.
Upon the occurrence of any event described in clauses
(A), (B), (C), (D), (E) or (F), above, Executive shall
have the right to elect to terminate her employment
under this Agreement by resignation upon not less than
sixty (60) days prior written Notice of Termination, as
defined in Section 9(b), given within six (6) full
calendar months after the event giving rise to said
right to elect. Notwithstanding the preceding sentence,
in the event of a continuing breach of this Agreement by
the Bank, Executive, after giving due notice within the
prescribed time frame of an initial event specified
above, shall not waive any of her rights under this
Agreement and this Section solely by virtue of the fact
that Executive has submitted her resignation, provided
Executive has remained in the
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employment of the Bank and is engaged in good faith
discussions to resolve any occurrence of an event
described in clauses (A), (B), (C), (D) or (F) above.
(iii) (A) Executive's involuntary termination by the Bank or
the Company (or any successor thereto) on the effective
date of, or at any time following, a Change in Control,
or (B) Executive's resignation from the employment with
the Bank or the Company (or any successor thereto)
following a Change in Control as a result of any event
described in Section 4(a)(ii)(A), (B), (C), (D), or (F)
above. For these purposes, a Change in Control of the
Bank or the Company shall mean a change in control of a
nature that: (i) would be required to be reported in
response to Item 5.01 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) 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
Bank's employee stock ownership plan or trust; or (b)
individuals who constitute the Board of Directors of the
Company 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 a majority of the
directors of the 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 Bank or the Company or similar
transaction in which the Bank or Company is not the
surviving institution occurs; or (d) a proxy statement
is distributed 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 or financial institutions, and as a result
of such proxy solicitation, a plan of reorganization,
merger consolidation or similar transaction involving
the Company is approved by the requisite vote of the
Company's stockholders; 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. Notwithstanding anything
to the contrary herein, a Change in Control shall not be
deemed to have occurred in the event that the Company
sells less than 50% of its outstanding common stock in
one or more stock offerings.
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(b) Upon the occurrence of an Event of Termination under Sections
4(a) (i) or (ii), on the Date of Termination, as defined in Section 9(b), the
Bank shall be obligated to pay Executive, or, in the event of her subsequent
death, her beneficiary or beneficiaries, or her estate, as the case may be, as
severance pay or liquidated damages, or both, an amount equal to the sum of: (i)
her earned but unpaid salary as of the date of her termination of employment
with the Bank; (ii) the benefits, if any, to which she is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company's officers and
employees; (iii) the remaining payments that Executive would have earned, in
accordance with Sections 3(a) and 3(b), if she had continued her employment with
the Bank for twelve (12) full months following such Event of Termination, and
had earned the maximum bonus or incentive award in each calendar year that ends
during such term; and (iv) the annual contributions or payments that would have
been made on Executive's behalf to any employee benefit plans of the Bank or the
Company as if Executive had continued her employment with the Bank for twelve
(12) full months following such Event of Termination, based on contributions or
payments made (on an annualized basis) at the Date of Termination. Any payments
hereunder shall be made in a lump sum within thirty (30) days after the Date of
Termination, or in the event that Section 409A of the Internal Revenue Code of
1986, as amended ("Code") applies, no later than the first day of the seventh
month following the Date of Termination. Such payments shall not be reduced in
the event Executive obtains other employment following termination of
employment.
(c) Upon the occurrence of an Event of Termination under Section
4(a)(iii), on the Date of Termination, as defined in Section 9(b), the Bank
shall be obligated to pay Executive, or, in the event of her subsequent death,
her beneficiary or beneficiaries, or her estate, as the case may be, as
severance pay or liquidated damages, or both, an amount equal to the sum of: (i)
her earned but unpaid salary as of the date of her termination of employment
with the Bank; (ii) the benefits, if any, to which she is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company's officers and
employees; (iii) the remaining payments that Executive would have earned, in
accordance with Sections 3(a) and 3(b), if she had continued her employment with
the Bank for an eighteen (18) month period following such Event of Termination,
and had earned the maximum bonus or incentive award in each calendar year that
ends during such term; and (iv) the annual contributions or payments that would
have been made on Executive's behalf to any employee benefit plans of the Bank
or the Company as if Executive had continued her employment with the Bank for an
eighteen (18) month period following such Event of Termination, based on
contributions or payments made (on an annualized basis) at the Date of
Termination. Any payments hereunder shall be made in a lump sum within thirty
(30) days after the Date of Termination, or in the event that Section 409A of
Code applies, no later than the first day of the seventh month following the
Date of Termination. Such payments shall not be reduced in the event Executive
obtains other employment following termination of employment.
(d) To the extent required under applicable law, upon the occurrence
of an Event of Termination, the Bank will cause to be continued life, medical
and disability coverage substantially identical to the coverage maintained by
the Bank for Executive and her family prior to Executive's termination.
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(e) Notwithstanding anything in this Agreement to the contrary, in
no event shall the aggregate payments or benefits to be made or afforded to
Executive under this Section constitute an "excess parachute payment" under
Section 280G of the Code or any successor thereto, and in order to avoid such a
result, Executive's benefits hereunder shall be reduced, if necessary, to an
amount, the value of which is one dollar ($1.00) less than an amount equal to
three (3) times Executive's "base amount," as determined in accordance with
Section 280G. The allocation of the reduction required hereby shall be
determined by Executive.
5. TERMINATION FOR JUST CAUSE.
(a) The term "Termination for Just Cause" shall mean termination
because of: (i) Executive's being convicted of a felony or of any lesser
criminal offense involving moral turpitude; (ii) the willful commission by the
Executive of a criminal or other act that, in the judgment of the Chief
Executive Officer, would likely cause substantial economic damage to the Company
or the Bank or substantial injury to the business reputation of the Company or
Bank; (iii) the commission by the Executive of any act of fraud in the
performance of her duties on behalf of the Company or Bank or a material
violation of the Company's or the Bank's code of ethics; (iv) the continuing
willful failure of the Executive to perform her duties to the Company or the
Bank (other than any such failure resulting from the Executive's incapacity due
to physical or mental illness) after written notice thereof has been given to
Executive by the Chief Executive Officer (specifying the particulars thereof in
reasonable detail) and Executive has been given a reasonable opportunity to be
heard and cure such failure; or (v) an order of a federal or state regulatory
agency or a court of competent jurisdiction requiring the termination of the
Executive's employment by the Company or the Bank. For purposes of this Section,
no act, or the failure to act, on Executive's part shall be "willful" unless
done, or omitted to be done, in bad faith and without reasonable belief that the
action or omission was in the best interests of the Bank or its affiliates.
(b) Notwithstanding Section 5(a), neither the Company nor the Bank
may terminate Executive for Just Cause unless and until there shall have been
delivered to her a Notice of Termination, finding that in the good faith opinion
of the Chief Executive Officer, Executive was guilty of conduct justifying
Termination for Just Cause and specifying the particulars thereof in detail.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Just Cause. During the period beginning on the
date of the Notice of Termination for Just Cause through the Date of
Termination, any unvested stock options and related limited rights granted to
Executive under any stock option plan shall not be exercisable nor shall any
unvested awards granted to Executive under any stock benefit plan of the Bank,
the Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination, any such unvested stock options and related limited rights and any
such unvested awards shall become null and void and shall not be exercisable by
or delivered to Executive at any time subsequent to such Termination for Just
Cause. In the Event of Executive's Termination for Just Cause, to the extent the
Executive serves as a director of the Company and the Bank, and/or as a director
and/or officer of any subsidiary or affiliate of the Company and/or the Bank,
the Executive's service in such positions shall immediately terminate.
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6. TERMINATION FOR DISABILITY OR DEATH.
(a) The Bank or Executive may terminate Executive's employment after
having established Executive's Disability. For purposes of this Agreement,
"Disability" means a physical or mental infirmity that impairs Executive's
ability to substantially perform her duties under this Agreement and that
results in Executive's becoming eligible for long-term disability benefits under
a long-term disability plan of the Company or the Bank (or, if the Company or
the Bank has no such plan in effect, that impairs Executive's ability to
substantially perform her duties under this Agreement for a period of one
hundred eighty (180) consecutive days). The Chief Executive Officer shall
determine in good faith, based upon competent medical advice and other factors
that she reasonably believes to be relevant, whether or not Executive is and
continues to be disabled for purposes of this Agreement. As a condition to any
benefits, the Chief Executive Officer may require Executive to submit to such
physical or mental evaluations and tests as she deems reasonably appropriate, at
the Bank's expense. In the event of such Disability, Executive's obligation to
perform services under this Agreement will terminate. In the event of such
termination, Executive shall continue to receive her Base Salary at the rate in
effect on the Date of Termination for the remainder of the then-current term.
Such payments shall be reduced by the amount of any short- or long-term
disability benefits payable to Executive under any disability program sponsored
by the Company or the Bank.
(b) In the event of Executive's death during the term of this
Agreement, her estate, legal representatives or named beneficiary or
beneficiaries (as directed by Executive in writing) shall be paid Executive's
Base Salary, at the rate in effect at the time of Executive's death for the
remainder of the then-current term.
7. TERMINATION UPON RETIREMENT
Termination of Executive's employment based on "Retirement" shall mean
termination of Executive's employment on or after age 65 or in accordance with
any retirement policy established by the Bank or the Company with Executive's
consent with respect to her. Upon termination of Executive based on Retirement,
no amounts or benefits shall be due Executive under this Agreement, and
Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.
8. RESIGNATION FROM BOARDS OF DIRECTORS
In the event of termination of Executive's employment for any reason
other than upon a Change in Control, to the extent that Executive serves as a
director of the Company and the Bank, and/or as a director and/or officer of any
subsidiary or affiliate of the Company and/or the Bank, Executive shall
immediately resign as a director.
9. NOTICE.
(a) Any notice required hereunder shall be in writing and
hand-delivered to the other party. Any termination by the Bank or by 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
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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.
(b) "Date of Termination" shall mean (A) if Executive's employment
is terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that she shall not have returned to the performance of her
duties on a full-time basis during such thirty (30) day period), and (B) if her
employment is terminated for any other reason, the date specified in the Notice
of Termination.
(c) If the party receiving a Notice of Termination desires to
dispute or contest the basis or reasons for termination, the party receiving the
Notice of Termination must notify the other party within thirty (30) days after
receiving the Notice of Termination that such a dispute exists, and shall pursue
the resolution of such dispute in good faith and with reasonable diligence.
During the pendency of any such dispute, neither the Company nor the Bank shall
be obligated to pay Executive compensation or other payments beyond the Date of
Termination.
10. 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.
11. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Bank or any predecessor of
the Bank and Executive, including, without limitation, that certain Change in
Control Agreement dated as of December 31, 2003 with CLB and CLFC, except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to 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 her without reference to this Agreement.
12. NO ATTACHMENT; BINDING ON SUCCESSORS.
(d) 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 effect any such action shall be null,
void, and of no effect.
(e) 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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13. MODIFICATION AND WAIVER.
(f) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(g) 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.
14. REQUIRED PROVISIONS.
(a) If 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 USC ss.1818(e)(3)] or 8(g)(1) [12 USC
ss.1818(g)(1)] of the Federal Deposit Insurance Act (the "FDI Act"), the Bank's
obligations under this Agreement 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 Executive all or part of the
compensation withheld while its contract obligations were suspended and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
(b) If 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)(4) [12 USC ss.1818(e)(4)] or 8(g)(1) [12 USC ss.1818(g)(1)] of the
FDI Act, all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the contracting parties
shall not be affected.
(c) If the Bank is in default as defined in Section 3(x)(1) [12 USC
ss.1813(x)(1)] of the FDI Act, all obligations of the Bank under this Agreement
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.
(d) All obligations under this contract shall be terminated, except
to the extent determined that continuation of this Agreement is necessary for
the continued operation of the Bank, (i) by the Director of the OTS or his or
her designee, at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in Section
13(c) [12 USC ss.1823(c)] of the FDI Act; or (ii) by the Director or his or her
designee at the time the Director or his or her designee approves a supervisory
merger to resolve problems related to operation of the Bank or when the Bank is
determined by the Director 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.
(e) Notwithstanding anything herein contained to the contrary, any
payments to 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 FDI Act, 12 U.S.C. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.
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15. NON-COMPETITION AND POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement
shall be subject to Executive's compliance with paragraph (b), (c) and (d) of
this Section 15.
(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; provided, however, that Executive shall
not be required to provide information or assistance with respect to any
litigation between the Executive and the Bank or any of its subsidiaries or
affiliates.
(c) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Bank, the Company
and affiliates thereof, as it may exist from time to time, is a valuable,
special and unique asset of the business of the Bank, the Company and affiliates
thereof. 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, Company 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 ("OTS"), the Federal Deposit Insurance Corporation ("FDIC"), or
other regulatory agency with jurisdiction over the Company, 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 which is
otherwise publicly available or which Executive is otherwise legally required to
disclose. In the event of a breach or threatened breach by Executive of the
provisions of this Section 15, the Bank and the Company will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, his
knowledge of the past, present, planned or considered business activities of the
Bank or the Company or any of their affiliates, 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 and the Company from pursuing any
other remedies available to them for such breach or threatened breach, including
the recovery of damages from Executive.
(d) Upon any termination of Executive's employment hereunder,
Executive agrees not to compete with the Bank and the Company and any of their
subsidiaries for a period of one (1) year following such termination in any
city, town or county in which the Bank has an office or has filed an application
for regulatory approval to establish an office, determined as of the effective
date of such termination, except as agreed to pursuant to a resolution duly
adopted by the Board. Executive agrees that during such period and within said
cities, towns and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose business
materially competes with the depository, lending or other business activities of
the Bank. The parties hereto, recognizing that irreparable injury will result to
the Bank, its business and property in the event of Executive's breach of this
Section 15(d) agree that in the event of any such breach by Executive, the Bank
will be entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employers, employees and all persons acting
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for or with Executive. Executive represents and admits that Executive's
experience and capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the Bank, and
that the enforcement of a remedy by way of injunction will not prevent Executive
from earning a livelihood. Nothing herein will be construed as prohibiting the
Bank and the Company from pursuing any other remedies available to them for such
breach or threatened breach, including the recovery of damages from Executive.
Executive further agrees that Executive will not, in any manner whatsoever,
during his employment with the Company and the Bank and for a period of one (1)
year following the termination of Executive's employment, either as an
individual or as a partner, stockholder, director, officer, principal, employee,
agent, consultant, or in any other relationship or capacity, with any person,
firm, corporation or other business entity, either directly or indirectly,
solicit or induce or aid in the solicitation or inducement of any employees of
the Company of the Bank to leave their employment with the Company or the Bank.
Executive further agrees that the Executive will not, in any manner whatsoever,
during Executive's employment with the Company of the Bank and for a period of
one (1) year following the termination of Executive's employment with the
Company or the Bank, either as an individual or as a partner, stockholder,
director, officer, principal, employee, agent, consultant or in any other
relationship or capacity with any person, firm, corporation or other business
entity, either directly or indirectly, solicit the business of any customers or
clients of the Company or the Bank at the time of the termination of Executive's
employment with the Company or the Bank.
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 binding arbitration, conducted before
a single arbitrator selected by the Bank and Executive sitting in a location
selected by the Bank and Executive within twenty-five (25) miles of
Edwardsville, Illinois 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.
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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 Executive's favor.
21. INDEMNIFICATION.
(a) The Bank shall provide Executive (including her heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
her heirs, executors and administrators) to the fullest extent permitted under
applicable law against all expenses and liabilities reasonably incurred by her
in connection with or arising out of any action, suit or proceeding in which she
may be involved by reason of her having been a director or officer of the Bank
(whether or not she 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); provided, however, the Bank shall not be required to indemnify or
reimburse Executive for legal expenses or liabilities incurred in connection
with an action, suit or proceeding arising from any illegal or fraudulent act
committed by Executive. Any such indemnification shall be made consistent with
OTS Regulations and Section 18(K) of the Federal Deposit Insurance Act, 12
U.S.C. ss.1828(K), and the regulations issued thereunder in 12 C.F.R. Part 359.
(b) Notwithstanding the foregoing, no indemnification shall be made
unless the Bank gives the OTS at least 60 days' notice of its intention to make
such indemnification. Such notice shall state the facts on which the action
arose, the terms of any settlement, and any disposition of the action by a
court. Such notice, a copy thereof, and a certified copy of the resolution
containing the required determination by the Board shall be sent to the Regional
Director of the OTS, who shall promptly acknowledge receipt thereof. The notice
period shall run from the date of such receipt. No such indemnification shall be
made if the OTS advises the Bank in writing within such notice period, of its
objection thereto.
[Signatures on next page]
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IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement
to be executed by their duly authorized representatives, and Executive has
signed this Agreement, effective as of the Effective Date. The Company has
become a party to this Agreement for the sole purpose of binding itself to the
duties and obligations set forth in Sections 10 and 21 hereof.
By:
----------------------------- --------------------------------
Corporate Secretary President and
Chief Executive Officer
ATTEST: FIRST CLOVER LEAF FINANCIAL CORP.
By:
----------------------------- --------------------------------
Corporate Secretary President and
Chief Executive Officer
WITNESS: EXECUTIVE:
----------------------------- -----------------------------------
Corporate Secretary Xxxxxxx XxXxxxxx
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