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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into
this 8th day of June, 1999, between Anchor BanCorp Wisconsin Inc., a Wisconsin
corporation (the "Company"), AnchorBank, S.S.B., a Wisconsin-chartered savings
bank which is wholly-owned by the Company ("AnchorBank") and Xxxxxx X. Xxxxxx
(the "Executive").
WHEREAS, FCB Financial Corp., a Wisconsin corporation ("FCB"),
entered into an Agreement and Plan of Merger, dated January 5, 1999 (the "Merger
Agreement"), providing for the combination of the Company and FCB and a
concurrent combination of AnchorBank and Fox Cities Bank ("Fox Cities") in a
merger, wherein the Company and AnchorBank survive the merger (collectively, the
"Merger"); and
WHEREAS, prior to the Merger, the Executive was employed as
Chairman of the Board of FCB and Fox Cities pursuant to an Employment Agreement,
dated May 1, 1997, between FCB, Fox Cities and the Executive (the "Prior
Agreement"); and
WHEREAS, consummation of the Merger contemplated by the Merger
Agreement is conditioned upon the Company, AnchorBank and the Executive entering
into an Employment Agreement conforming to the terms hereof and superseding the
Prior Agreement; and
WHEREAS, the Executive's skills and extensive experience and
knowledge in the financial institutions industry will substantially benefit the
Company and AnchorBank; and
WHEREAS, the Company and AnchorBank desire to retain the
services of the Executive in connection with the business activities of the
Company and AnchorBank following the Merger.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, it is
agreed as follows:
ARTICLE I
EMPLOYMENT
1.1 Term of Employment; Termination of Prior Agreement.
The Company and AnchorBank hereby agree to employ the
Executive for a period commencing on June 8, 1999 (the "Commencement Date") and
terminating upon the Executive's retirement on October 31, 1999, subject to
earlier termination as provided in Article II hereof. This Agreement shall
supersede the Prior Agreement and the parties hereto agree and acknowledge that,
following execution of this Agreement, the Prior Agreement shall be of no
further force or effect.
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1.2 Duties of the Executive.
The Company and AnchorBank hereby employ the Executive, and
the Executive hereby accepts employment with the Company and AnchorBank, upon
the terms and conditions hereinafter set forth for the term of this Agreement.
The Executive is employed by AnchorBank to perform the duties of Senior Vice
President of AnchorBank, and the Company shall cause AnchorBank to appoint the
Executive to such position. As part of the Executive's employment by AnchorBank
hereunder, the Executive shall also serve as, and the Company hereby appoints
the Executive during the term of his employment by AnchorBank hereunder to serve
as, Senior Vice President of the Company. The services to be performed by the
Executive shall include those normally performed by the Senior Vice President of
similar banking organizations and as directed by the Board of Directors of the
Company and AnchorBank, respectively, which are not inconsistent with the
foregoing; provided, however, that in no event shall the Executive be obligated
to perform duties substantially different from those the Executive performed
under the Prior Agreement. The Executive agrees to devote his full business time
to the rendition of such services, subject to absences for customary vacations
and for temporary illnesses and except as otherwise provided by the Board of
Directors of each of the Company and AnchorBank. The Company and AnchorBank each
agree that during the term of this Agreement it will not reduce the Executive's
current job title, status or responsibilities without the Executive's prior
written consent. Furthermore, the Executive shall not be required, without his
express written consent, to be based anywhere other than within the
Oshkosh-Neenah/Menasha-Appleton metropolitan area, except for reasonable
business travel in connection with the business of the Company and AnchorBank
1.3 Compensation.
Upon execution of this Agreement, the Company and AnchorBank
shall pay the Executive a lump sum amount equal to $31,800 as a signing bonus
and as consideration for termination of the Prior Agreement, and, thereafter,
AnchorBank agrees to compensate, and the Company agrees to cause AnchorBank to
compensate, the Executive for his services hereunder during the term of this
Agreement by payment of an aggregate salary of $31,800 in such monthly,
semi-monthly or other payments as are from time to time applicable to other
executive officers of AnchorBank. In order to determine the salary paid the
Executive hereunder for purposes of calculating benefits under employee benefit
plans in which the Executive participates, the aggregate of the signing bonus
and the salary provided in the preceding sentence shall be used. The Executive's
salary may be increased from time to time during the term of this Agreement in
the sole discretion of the Board of Directors of AnchorBank, but the Executive's
salary shall not be reduced below the level then in effect. In addition, the
Executive shall be entitled to participate in incentive compensation plans as
may from time to time be established by the Company or AnchorBank on an
equivalent basis as other executive officers of the Company or AnchorBank (but
recognizing differences in responsibilities among executive officers). All
advisory director fees in respect to the Company and AnchorBank received by the
Executive shall be included along with his salary for purposes of computing any
amount to which he may become entitled under any employee benefit plan of the
Company and AnchorBank.
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1.4 Benefits.
(a) The Executive shall be provided the following additional
benefits, (i) participation in any pension, profit-sharing, deferred
compensation or other retirement plan, (ii) medical, dental and life insurance
coverage consistent with coverages provided to other executive officers of
AnchorBank, (iii) the use of an automobile and membership or appropriate
affiliation with a service club and a recreational club, (iv) reimbursement of
business expenses reasonably incurred in connection with his employment and
expenses incurred by his spouse when accompanying the Executive, (v) paid
vacations and sick leave in accordance with prevailing policies of AnchorBank,
provided that allowed vacations shall in no event be less than five weeks per
annum (determined pro rata based on the term of this Agreement), and (vi) such
other benefits as are provided to other executive officers of AnchorBank;
provided that amounts allocated to the Executive's personal use under clause
(iii) above and additional charges for the Executive's spouse pursuant to clause
(iv) above shall be treated as taxable income to the Executive in accordance
with applicable AnchorBank policies.
(b) If the Executive shall become temporarily disabled or
incapacitated to the extent that he is unable to perform the duties of Senior
Vice President of the Company or AnchorBank for three (3) consecutive months, he
shall nevertheless be entitled to receive 100 percent of his compensation and
benefits under Sections 1.3 and 1.4 of this Agreement for the period of his
disability up to three (3) months, less any amount paid to the Executive under
any other disability program maintained by the Company or AnchorBank or
disability insurance policy maintained for the benefit of the Executive by the
Company or AnchorBank. Upon returning to active full-time employment, the
Executive's full compensation as set forth in this Agreement shall be
reinstated. In the event that the Executive returns to active employment on
other than a full-time basis with the approval of the Board of Directors of
AnchorBank, then any future compensation to be paid the Executive (as set forth
in Section 1.3 of this Agreement) shall be reduced proportionately based upon
the fraction of full-time employment devoted by the Executive to his employment
and responsibilities at AnchorBank and the Company. But, if he is again unable
to perform the duties of Senior Vice President of the Company and AnchorBank
hereunder due to disability or incapacity, he must have been engaged in active
full-time employment (which period of full-time employment shall also include
employment with FCB and Fox Cities) for at least twelve (12) consecutive months
immediately prior to such later absence or inability in order to qualify for the
full or partial continuance of his salary under this Section (b).
1.5 Covenant Not to Compete.
The Executive acknowledges that the Company and AnchorBank
would be substantially damaged by an association of the Executive with a
depository institution that competes for customers with the Company and
AnchorBank. Without the consent of the Company, the Executive shall not at any
time during the term of this Agreement or the Executive's employment by the
Company and AnchorBank, and for a period of one year thereafter (regardless of
the reason for termination), (i) on behalf of himself or as agent of any other
person solicit any person who was a customer of the Company or AnchorBank (or
the former FCB or Fox Cities) or any of their subsidiaries during the two year
period prior to the termination of this Agreement or the Executive's employment
hereunder or under the Prior Agreement for the purpose of offering the same
products or rendering the same services to such customer as were provided or
proposed to
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be provided by the Company or AnchorBank (or the former FCB or Fox Cities) or
any of their subsidiaries to such customer as of the time of termination of the
Executive's employment, (ii) directly or indirectly, on the Executive's behalf
or in the service or on the behalf of others, render or be retained to render
similar services as described in Section 1.2 hereof, whether as an officer,
partner, trustee, consultant, or employee for any depository institution, which
has a banking office located within 10 miles of any office of the Company,
AnchorBank, the former Fox Cities or any banking office of the former FCB (in
the case of Fox Cities or FCB in existence immediately prior to the Commencement
Date), provided, however, that the Executive shall not be deemed to have
breached this undertaking if (a) he renders services otherwise prohibited by
this paragraph (ii) for a depository institution which has its home office
located outside of the Wisconsin counties of Winnebago and Outagamie and he
renders such services from a full-service banking office of such depository
institution which is located outside these same Wisconsin counties, or (b) his
sole relationship with any other such entity consists of his holding, directly
or indirectly, an equity interest in such entity not greater than three percent
(3%) of such entity's outstanding equity interest, or (iii) actively induce or
solicit any employees of the Company or AnchorBank (including former employees
of Fox Cities or FCB who are then employed by the Company or AnchorBank) to
leave such employ. For purposes of this Section 1.5, "person" shall include any
individual, corporation, partnership, trust, firm, proprietorship, venture or
other entity of any nature whatsoever.
ARTICLE II
TERMINATION OF EMPLOYMENT
2.1 Voluntary Termination of Employment by the Executive.
The Executive may terminate his employment hereunder at any
time for any reason upon giving the Company and AnchorBank written notice, at
least ninety (90) days prior to termination of employment. Upon such
termination, the Executive shall be entitled to receive the Executive's
theretofore unpaid base salary in effect at the date such written notice is
given for the period of employment up to the date of termination, and the
Executive and his spouse and dependents will be entitled to further medical
coverage, at his and/or their expense, to the extent required by COBRA.
2.2 Termination of Employment for Death.
If the Executive's employment is terminated by reason of the
Executive's death, then the Executive's personal representative shall be
entitled to receive the Executive's theretofore unpaid base salary for the
period of employment up to the date of death. The Executive's spouse and
dependent children shall continue to be entitled, at the expense of AnchorBank
(subject to then existing co-payment features applicable under AnchorBank's
medical insurance plan) if it is an insured plan, to further medical coverage to
the extent permitted by COBRA; provided that, if AnchorBank's plan is not
insured, AnchorBank will pay to the Executive's spouse an additional monthly
death benefit during the applicable COBRA period, based upon COBRA rates in
effect at the time of the Executive's death, in an amount equal to the COBRA
rate plus taxes due on such cash payment; provided further that this benefit
shall cease if the spouse and dependents cease to be eligible for COBRA
coverage.
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2.3 Termination of Employment for Disability.
If the Executive becomes Totally and Permanently Disabled (as
defined below) during the term of this Agreement, the Company and AnchorBank may
terminate the Executive's employment and this Agreement, except Section 1.5 and
Article IV hereof, by giving the Executive written notice of such termination
not less than 5 days before the effective date thereof. If the Executive's
employment and this Agreement are terminated pursuant to this Section 2.3, the
Company and AnchorBank shall pay to the Executive his theretofore unpaid base
salary for the period of employment up to the date of termination, and the
Company and AnchorBank shall have no further obligations to the Executive under
this Agreement, except for any COBRA obligations. The Executive is Totally and
Permanently Disabled for purposes of this Section 2.3 if he is disabled or
incapacitated to the extent that he is unable to perform the duties of Senior
Vice President of the Company or AnchorBank for more than three (3) consecutive
months, and such disability or incapacity (i) is expected to continue for more
than three (3) additional months as certified by a medical doctor of the
Company's choosing which is not contradicted by a doctor of the Executive's
choosing or (ii) shall have in fact continued for more than three (3) additional
months.
2.4 Termination of Employment by the Company for Just Cause.
The Company and AnchorBank may terminate the Executive's
employment hereunder for Just Cause (as such term is defined below), in which
case the Executive shall be entitled to receive the Executive's theretofore
unpaid base salary for the period of employment up to the date of termination,
but shall not be entitled to any compensation or employment benefits pursuant to
this Agreement for any period after the date of termination, or the continuation
of any benefits except as may be required by law, including, at his own expense,
COBRA.
"Just Cause" shall mean personal dishonesty, incompetence,
willful misconduct or breach of a fiduciary duty involving personal profit in
the performance of his duties under this Agreement, intentional failure to
perform stated duties (provided that such nonperformance has continued for 10
days after the Company and AnchorBank has given written notice of such
nonperformance to the Executive and its intention to terminate the Executive's
employment hereunder because of such nonperformance), willful violation of any
law, rule or regulation (other than a law, rule or regulation relating to a
traffic violation or similar offense), final cease-and-desist order, termination
under the provisions of Section 2.7(b) and (c) or material breach of any
provision of this Agreement.
2.5 Termination of Employment by the Company and AnchorBank
Without Cause.
The Company and AnchorBank may terminate the Executive's
employment hereunder without cause, in which case the Executive shall receive
(a) his base salary under Section 1.3 hereof through the then remaining term of
employment under Section 1.1, (b) his theretofore unpaid base salary for the
period of employment up to the date of termination, (c) medical, dental and life
insurance and all other benefits through the then remaining term of employment
under Section 1.1 consistent with the terms and conditions set forth in Section
1.4, (d) any other benefits to which the Executive is entitled by law or the
specific terms of the Company's and AnchorBank's policies in effect at the time
of termination of employment and (e) an amount
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equal to the product of the Company's and AnchorBank's annual aggregate
contribution, for the benefit of the Executive, to all qualified retirement
plans in which the Executive participated multiplied by the fraction of a year
remaining in the term of employment under Section 1.1. The benefit in (e) under
this Section 2.5 shall be in addition to any benefit payable from any qualified
or non-qualified plans or programs maintained by the Company or AnchorBank at
the time of termination. If AnchorBank's medical and dental plans are not
insured, the medical and dental benefit in (c) shall be accomplished by
AnchorBank paying to the Executive an additional cash amount equal to the COBRA
premium for such coverage, plus taxes on such amount, so that the Executive may
purchase the coverage on an after-tax basis. Notwithstanding the foregoing, in
the event that the Executive is terminated pursuant to this Section 2.5, the
Executive shall nonetheless be deemed to continue as an employee of the Company
through the term of this Agreement for the sole purpose of determining his
rights under his outstanding stock options.
2.6 Definition of Termination of Employment.
The terms "termination" or "involuntarily terminated" in this
Agreement shall refer to the termination of the employment of the Executive by
the Company or AnchorBank without his express written consent. In addition, for
purposes of this Agreement, a material diminution or interference with the
Executive's duties, responsibilities and benefits as Senior Vice President of
the Company or AnchorBank shall be deemed and shall constitute an involuntary
termination of employment to the same extent as express notice of such
involuntary termination. By way of example and not by way of limitation, any of
the following actions shall constitute such diminution or interference unless
consented to in writing by the Executive: (1) a change in the principal work
place of the Executive to a location outside a twenty-five mile radius from 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx; (2) a material reduction in the
secretarial or other administrative support of the Executive; (3) a material
demotion of the Executive; and (4) a reduction or adverse change in the salary,
perquisites, benefits, contingent benefits or vacation time which had
theretofore been provided to the Executive, other than as part of an overall
program applied uniformly and with equitable effect to all executive officers of
the Company or AnchorBank.
2.7 Termination or Suspension of Employment as Required by Law.
Notwithstanding anything in this Agreement to the contrary,
the following provisions shall limit the obligation of AnchorBank to continue
employing the Executive, but only to the extent required by the applicable
regulations of the OTS (12 C.F.R. ss.563.39), or similar succeeding regulations:
(a) If the Executive is suspended and/or temporarily
prohibited from participating in the conduct of AnchorBank's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. ss.1818(e)(3) and (g)(1)) AnchorBank's obligations under this Agreement
shall be suspended as of the date of service of notice, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, AnchorBank
shall (i) pay the Executive all or part of the compensation withheld while its
contract obligations hereunder were suspended and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.
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(b) If the Executive is removed and/or permanently prohibited
from participating in the conduct of AnchorBank's affairs by an order issued
under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1818(e)(4) or (g)(1)) all obligations of AnchorBank under this Agreement
shall terminate as of the effective date of the order.
(c) If AnchorBank is in default (as defined in Section 3(x)(1)
of the Federal Deposit Insurance Act), the obligation to the Executive hereunder
shall terminate as of the date of default.
(d) All obligations under this Agreement may be terminated:
(i) by the Director of the Office of Thrift Supervision (the "Director") or his
or her designee at the time the Federal Deposit Insurance Company enters into an
agreement to provide assistance to or on behalf of AnchorBank under the
authority contained in Section 13(c) of the Federal Deposit Insurance Act and
(ii) by the Director, or his or her designee at the time the Director or such
designee approves a supervisory merger to resolve problems related to operation
of AnchorBank or when AnchorBank is determined by the Director to be in an
unsafe or unsound condition.
(e) Termination pursuant to subparagraph (d) of this Section
2.7 shall be treated as a termination by AnchorBank without cause entitling the
Executive to benefits payable under Section 2.5. Termination pursuant to
subparagraph (a), (b) or (c) shall be treated as a termination for Just Cause
under Section 2.4. Termination under this Section 2.7 shall not affect other
rights hereunder which are vested at the time of termination.
2.8 Limitation on Termination or Disability Pay.
Any payments made to the Executive pursuant to this Agreement
or otherwise are subject to and conditioned upon their compliance with 12
X.X.X.xx. 1828(k) and any regulations promulgated thereunder. Total compensation
paid to the Executive upon termination shall not exceed the limitations set
forth in OTS Regulatory Bulletin RB-27a, dated March 5, 1993. If any provision
regarding termination contained herein conflicts with 12 C.F.R. ss.563.39(b),
the latter shall prevail.
ARTICLE III
LEGAL FEES AND EXPENSES
The Company shall pay, or shall cause AnchorBank to pay, all
legal fees and expenses which the Executive may incur as a result of the Company
or AnchorBank contesting the validity or enforceability of this Agreement,
provided that the Executive is the prevailing party in such contest or that any
dispute may otherwise be settled in favor of the Executive. The Executive shall
be entitled to receive interest thereon for the period of any delay in payment
from the date such payment was due at the rate determined by adding two hundred
basis points to the six-month Treasury Xxxx rate.
ARTICLE IV
CONFIDENTIALITY
The Executive acknowledges that he now has, and in the course
of his employment will have, access to important and confidential information
regarding the business and services of
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the Company, AnchorBank and their subsidiaries, as well as similar information
regarding FCB and its subsidiaries and that the disclosure to, or the use of
such information by, any business in competition with the Company, AnchorBank or
their subsidiaries shall result in substantial and undeterminable harm to the
Company, AnchorBank and their subsidiaries. In order to protect the Company,
AnchorBank and their subsidiaries against such harm and from unfair competition,
the Executive agrees with the Company and AnchorBank that while employed by the
Company and AnchorBank and at any time thereafter, the Executive will not
disclose, communicate or divulge to anyone, or use in any manner adverse to the
Company, AnchorBank or their subsidiaries any information concerning customers,
methods of business, financial information or other confidential information of
the Company, AnchorBank, their subsidiaries or similar information regarding FCB
and its subsidiaries, except for information as is in the public domain or
ascertainable through common sources of public information (otherwise than as a
result of any breach of this covenant by the Executive).
ARTICLE V
GENERAL PROVISIONS
5.1 Inquiries Regarding Proposed Activities.
In the event the Executive shall inquire in writing of the
Company whether any proposed action on the part of the Executive would be
considered by the Company or AnchorBank to be prohibited by or in breach of the
terms of this Agreement, the Company shall have 30 days after receipt of such
notice to express in writing to the Executive its position with respect thereof
and in the event such writing shall not be given to the Executive, such proposed
action, as set forth in the writing of the Executive, shall not be deemed to be
a violation of or breach of this Agreement.
5.2 No Duty of Mitigation.
The Executive shall not be required to mitigate the amount of
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Agreement be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits after the
date of termination of this Agreement or otherwise.
5.3 Successors.
This Agreement may be assigned by the Company or AnchorBank to
any other business entity that is directly or indirectly controlled by the
Company or AnchorBank. This Agreement may not be assigned by the Company or
AnchorBank except in connection with a merger involving the Company or
AnchorBank or a sale of substantially all of the assets of the Company or
AnchorBank, and the respective obligations of the Company and AnchorBank
provided for in this Agreement shall be the binding legal obligations of any
successor to the Company or AnchorBank by purchase, merger, consolidation, or
otherwise and such successor shall be obligated to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company and AnchorBank would have been required to perform if no such succession
had taken place. Failure of the Company and/or AnchorBank to obtain such
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agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive, if he elects to terminate this
Agreement, to treat such termination as though it was a termination without
cause by the Company and AnchorBank pursuant to Section 2.5 hereof. This
Agreement may not be assigned by the Executive during his life, and upon his
death will be binding upon and inure to the benefit of his heirs, legatees and
the legal representatives of his estate.
5.4 Notice.
For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth on the signature page of this Agreement (provided that all
notices to the Company and AnchorBank shall be directed to the attention of the
Board of Directors of the Company and/or AnchorBank, as the case may be, with a
copy to the Secretary of the Company and/or AnchorBank, as the case may be), or
to such other address as either party may have furnished to the other in writing
in accordance herewith.
5.5 Amendments.
No amendment or additions to this Agreement shall be binding
unless in writing and signed by all parties, except as herein otherwise
provided.
5.6 Severability.
The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
5.7 Governing Law.
This Agreement shall be governed by the laws of the United
States to the extent applicable and otherwise by the internal laws of the State
of Wisconsin.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
ANCHOR BANCORP WISCONSIN INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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Address: 00 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
ANCHORBANK, S.S.B.
By: /s/ Xxxxxxx Xxxxxxxxx
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Address: 00 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
EXECUTIVE
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Address: 0000 X-XX-XXXXXX Xxxx
Xxxxxxx, Xxxxxxxxx 00000
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