North Central Bancshares, Inc. Employment Agreement
North
Central Bancshares, Inc.
This
Employment
Agreement
(“Agreement”) is made and entered into as of December 14, 2007 by and between
North
Central Bancshares, Inc.
a
publicly held business corporation organized and operating under the laws of
the
State of Iowa and having an office at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxx
00000
(“Holding Company”) and Xxxxx X. Xxxxxxx, an individual residing at 00000
Xxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxx 00000 (“Xx. Xxxxxxx”).
W
I T N E S S E T H :
Whereas,
Xx.
Xxxxxxx currently serves the Holding Company in the capacity of President and
Chief Executive Officer; and
Whereas,
First
Federal Savings Bank of Iowa (“Bank”) is a wholly owned subsidiary of the
Holding Company; and
Whereas,
effective
as of the date of this Agreement, the Holding Company has converted from a
federally chartered mutual holding company to a publicly held Iowa corporation;
and
Whereas,
the
Holding Company desires to assure for itself the continued availability of
Xx.
Xxxxxxx'x services and the ability of Xx. Xxxxxxx to perform such services
with
a minimum of personal distraction in the event of a pending or threatened Change
of Control (as hereinafter defined); and
Whereas,
Xx.
Xxxxxxx is willing to continue to serve the Holding Company on the terms and
conditions hereinafter set forth; and
Whereas,
Xx.
Xxxxxxx and the Holding Company are parties to an Employment Agreement made
and
entered into as of March 20, 1996 (“Original Agreement”); and
Whereas,
pursuant to section 25 of the Original Agreement, the parties wish to amend
the
Original Agreement;
Now,
Therefore,
in
consideration of the premises and the mutual covenants and conditions
hereinafter set forth, the Holding Company and Xx. Xxxxxxx hereby agree as
follows:
Section
1. Employment.
The
Holding Company agrees to continue to employ Xx. Xxxxxxx, and Xx. Xxxxxxx hereby
agrees to such continued employment, during the period and upon the terms and
conditions set forth in this Agreement.
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Section
2. Employment
Period; Remaining Unexpired Employment Period.
(a) The
terms
and conditions of this Agreement shall be and remain in effect during the period
of employment established under this section 2 (“Employment Period”). The
Employment Period shall be for an initial term of three years beginning on
the
date of this Agreement and ending on the third anniversary date of this
Agreement plus such extensions, if any as are provided by the Board of Directors
of the Holding Company (“Board”) pursuant to section 2(b).
(b) Beginning
on the date of this Agreement, the Employment Period shall automatically be
extended for one (1) additional day each day, unless either the Holding Company
or Xx. Xxxxxxx elects not to extend the Agreement further by giving written
notice to the other party in which case the Employment Period shall end on
the
third anniversary of the date on which such written notice is given. For all
purposes of this Agreement, the term “Remaining Unexpired Employment Period” as
of any date shall mean the period beginning on such date and ending on: (i)
if a
notice of non-extension has been given in accordance with this section 2(b),
the
third anniversary of the date on which such notice is given; and (ii) in all
other cases, the third anniversary of the date as of which the Remaining
Unexpired Employment Period is being determined. Upon termination of Xx.
Xxxxxxx'x employment with the Holding Company for any reason whatsoever, any
daily extensions provided pursuant to this section 2(b), if not therefore
discontinued, shall automatically cease.
(c) Nothing
in this Agreement shall be deemed to prohibit the Holding Company at any time
from terminating Xx. Xxxxxxx'x employment during the Employment Period with
or
without notice for any reason; provided,
however,
that
the relative rights and obligations of the Holding Company and Xx. Xxxxxxx
in
the event of any such termination shall be determined under this
Agreement.
Section
3. Duties.
Xx.
Xxxxxxx shall serve as President and Chief Executive Officer of the Holding
Company, having such power, authority and responsibility and performing such
duties as are prescribed by or under the By-Laws of the Holding Company and
as
are customarily associated with such position. Xx. Xxxxxxx shall devote his
full
business time and attention (other than during weekends, holidays, approved
vacation periods, and periods of illness or approved leaves of absence) to
the
business and affairs of the Holding Company and shall use his best efforts
to
advance the interests of the Holding Company.
Section
4. Cash
Compensation.
In
consideration for the services to be rendered by Xx. Xxxxxxx hereunder, the
Holding Company shall pay to him a salary no less than the rate in effect on
the
date of this agreement, payable in approximately equal installments in
accordance with the Holding Company's customary payroll practices for senior
officers. At least annually during the Employment Period, the Board shall review
Xx. Xxxxxxx'x annual rate of salary and may, in its discretion, approve an
increase therein. In addition to salary, Xx. Xxxxxxx may receive other cash
compensation from the Holding Company for services hereunder at such times,
in
such amounts and on such terms and conditions as the Board may determine from
time to time. In the event that Xx. Xxxxxxx receives a salary from the Bank
in
addition to or in lieu of a salary from the Holding Company, any reference
herein to salary shall be a reference to the aggregate of the salaries paid
or
payable by the Bank and the Holding Company.
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Section
5. Employee
Benefit Plans and Programs.
During
the Employment Period, Xx. Xxxxxxx shall be treated as an employee of the
Holding Company and shall be eligible to participate in and receive benefits
under any and all qualified or non-qualified retirement, pension, savings,
profit-sharing or stock bonus plans, any and all group life, health (including
hospitalization, medical and major medical), dental, accident and long-term
disability insurance plans, and any other employee benefit and compensation
plans (including, but not limited to, any incentive compensation plans or
programs, stock option and appreciation rights plans and restricted stock plans)
as may from time to time be maintained by, or cover employees of, the Holding
Company, in accordance with the terms and conditions of such employee benefit
plans and programs and compensation plans and programs and consistent with
the
Holding Company's customary practices.
Section
6. Indemnification
and Insurance.
(a) During
the Employment Period and until the expiration of the time provided by law
for
the commencement of any judicial or administrative proceeding on the basis
of
such service, the Holding Company shall cause Xx. Xxxxxxx to be covered by
and
named as an insured under any policy or contract of insurance obtained by it
to
insure its directors and officers against personal liability for acts or
omissions in connection with service as an officer or director of the Holding
Company or service in other capacities at the request of the Holding Company.
The coverage provided to Xx. Xxxxxxx pursuant to this section 6 shall be of
the
same scope and on the same terms and conditions as the coverage (if any)
provided to other officers or directors of the Holding Company.
(b) To
the
maximum extent permitted under applicable law, during the Employment Period
and
until the expiration of the time provided by law for the commencement of any
judicial or administrative proceeding on the basis of such service, the Holding
Company shall indemnify, and shall cause its subsidiaries and affiliates to
indemnify Xx. Xxxxxxx against and hold him harmless from any costs, liabilities,
losses and exposures to the fullest extent and on the most favorable terms
and
conditions that similar indemnification is offered to any director or officer
of
the Holding Company or any subsidiary or affiliate thereof. This section 6(b)
shall not be applicable where section 19 is applicable.
Section
7. Outside
Activities.
Xx.
Xxxxxxx may serve as a member of the boards of directors of such business,
community and charitable organizations as he may disclose to and as may be
approved by the Board (which approval shall not be unreasonably withheld);
provided,
however,
that
such service shall not materially interfere with the performance of his duties
under this Agreement. Xx. Xxxxxxx may also engage in personal business and
investment activities which do not materially interfere with the performance
of
his duties hereunder; provided,
however,
that
such activities are not prohibited under any code of conduct or investment
or
securities trading policy established by the Holding Company and generally
applicable to all similarly situated executives. Xx. Xxxxxxx may also serve
as
an officer or director of the Bank on such terms and conditions as the Holding
Company and the Bank may mutually agree upon, and such service shall not be
deemed to materially interfere with Xx. Xxxxxxx'x performance of his duties
hereunder or otherwise result in a material breach of this
Agreement.
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Section
8. Working
Facilities and Expenses.
Xx.
Xxxxxxx'x principal place of employment shall be at the Holding Company's
executive offices at the address first above written, or at such other location
within Xxxxxxx County, Iowa at which the Holding Company shall maintain its
principal executive offices, or at such other location as the Holding Company
and Xx. Xxxxxxx may mutually agree upon. The Holding Company shall provide
Xx.
Xxxxxxx at his principal place of employment with a private office, secretarial
services, and other support services and facilities suitable to his position
with the Holding Company and necessary or appropriate in connection with the
performance of his assigned duties under this Agreement. The Holding Company
shall provide to Xx. Xxxxxxx for his exclusive use an automobile owned or leased
by the Holding Company and appropriate to his position, to be used in the
performance of his duties hereunder, including commuting to and from his
personal residence. The Holding Company shall reimburse Xx. Xxxxxxx for his
ordinary and necessary business expenses, including, without limitation, all
expenses associated with his business use of the aforementioned automobile,
fees
for memberships in such clubs and organizations as Xx. Xxxxxxx and the Holding
Company shall mutually agree are necessary and appropriate for business
purposes, and his travel and entertainment expenses incurred in connection
with
the performance of his duties under this Agreement, in each case upon
presentation to the Holding Company of an itemized account of such expenses
in
such form as the Holding Company may reasonably require.
Section
9. Termination
of Employment with Severance Benefits.
(a) Xx.
Xxxxxxx shall be entitled to the severance benefits described herein in the
event that his employment with the Holding Company terminates during the
Employment Period under any of the following circumstances:
(i) Xx.
Xxxxxxx'x voluntary resignation from employment with the Holding Company within
ninety (90) days following:
(A) the
failure of the Board to appoint or re-appoint or elect or re-elect Xx. Xxxxxxx
to the office of President and Chief Executive Officer (or a more senior office)
of the Holding Company;
(B) the
failure of the stockholders of the Holding Company to elect or re-elect Xx.
Xxxxxxx or the failure of the Board (or the nominating committee thereof) to
nominate Xx. Xxxxxxx for such election or re-election;
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(C) the
expiration of a thirty (30) day period following the date on which Xx. Xxxxxxx
gives written notice to the Holding Company of its material failure, whether
by
amendment of the Holding Company's Articles of Incorporation or By-laws, action
of the Board or the Holding Company's stockholders or otherwise, to vest in
Xx.
Xxxxxxx the functions, duties, or responsibilities prescribed in section 3
of
this Agreement, unless, during such thirty (30) day period, the Holding Company
cures such failure in a manner determined by Xx. Xxxxxxx, in his discretion,
to
be satisfactory; or
(D) the
expiration of a thirty (30) day period following the date on which Xx. Xxxxxxx
gives written notice to the Holding Company of its material breach of any term,
condition or covenant contained in this Agreement (including, without limitation
any reduction of Xx. Xxxxxxx'x rate of base salary in effect from time to time
and any change in the terms and conditions of any compensation or benefit
program in which Xx. Xxxxxxx participates which, either individually or together
with other changes, has a material adverse effect on the aggregate value of
his
total compensation package), unless, during such thirty (30) day period, the
Holding Company fully cures such failure; or
(ii) the
termination of Xx. Xxxxxxx'x employment with the Holding Company for any other
reason not described in section 10(a).
In
such
event, then, the Holding Company shall provide the benefits and pay to Xx.
Xxxxxxx the amounts described in section 9(b).
(b) Upon
the
termination of Xx. Xxxxxxx'x employment with the Holding Company under
circumstances described in section 9(a) of this Agreement, the Holding Company
shall pay and provide to Xx. Xxxxxxx (or, in the event of his death, to his
estate):
(i) his
earned but unpaid compensation as of the date of the termination of his
employment with the Holding Company, such payment to be made at the time and
in
the manner prescribed by law applicable to the payment of wages but in no event
later than thirty (30) days after termination of employment;
(ii) the
benefits, if any, to which he is entitled as a former employee under the
employee benefit plans and programs and compensation plans and programs
maintained for the benefit of the Holding Company's officers and
employees;
(iii) continued
group life, health (including hospitalization, medical and major medical),
dental, accident and long-term disability insurance benefits, in addition to
that provided pursuant to section 9(b)(ii), and after taking into account the
coverage provided by any subsequent employer, if and to the extent necessary
to
provide for Xx. Xxxxxxx, for the Remaining Unexpired Employment Period, coverage
equivalent to the coverage to which he would have been entitled under such
plans
(as in effect on the date of his termination of employment, or, if his
termination of employment occurs after a Change of Control, on the date of
such
Change of Control, whichever benefits are greater), if he had continued working
for the Holding Company during the Remaining Unexpired Employment Period at
the
highest annual rate of compensation achieved during that portion of the
Employment Period which is prior to Xx. Xxxxxxx'x termination of employment
with
the Holding Company;
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(iv) thirty
(30) days following his termination of employment with the Holding Company,
a
lump sum payment, in an amount equal to the present value of the salary that
Xx.
Xxxxxxx would have earned if he had continued working for the Holding Company
during the Remaining Unexpired Employment Period at the highest annual rate
of
salary achieved during that portion of the Employment Period which is prior
to
Xx. Xxxxxxx'x termination of employment with the Holding Company, where such
present value is to be determined using a discount rate equal to the applicable
short-term federal rate prescribed under section 1274(d) of the Internal Revenue
Code of 1986 (“Code”) (the "Short Term AFR"), compounded using the compounding
period corresponding to the Holding Company's regular payroll periods for its
officers, such lump sum to be paid in lieu of all other payments of salary
provided for under this Agreement in respect of the period following any such
termination;
(v) thirty
(30) days following his termination of employment with the Holding Company,
a
lump sum payment in an amount equal to the product of (A) the Bank’s “normal
cost” for its tax-qualified defined benefit plan for the most recently completed
fiscal year of the plan (expressed as a percentage of the compensation
recognized in the plan’s benefit formula and determined by, or on the basis of
information furnished by, the plan’s actuary), multiplied by (B) the amount
payable under section 9(b)(iv);
(vi) thirty
(30) days following his termination of employment with the Holding Company,
a
lump sum payment in an amount equal to the present value of the additional
employer contributions (or if greater in the case of a leveraged employee stock
ownership plan or similar arrangement, the additional assets allocable to him
through debt service, based on the fair market value of such assets at
termination of employment) to which he would have been entitled under any and
all qualified and non-qualified defined contribution plans maintained by, or
covering employees of, the Holding Company, if he were 100% vested thereunder
and had continued working for the Holding Company during the Remaining Unexpired
Employment Period at the highest annual rate of compensation achieved during
that portion of the Employment Period which is prior to Xx. Xxxxxxx'x
termination of employment with the Holding Company, and making the maximum
amount of employee contributions, if any, required under such plan or plans,
such present value to be determined on the basis of a discount rate, compounded
using the compounding period that corresponds to the frequency with which
employer contributions are made to the relevant plan, equal to the Short Term
AFR;
(vii) the
payments that would have been made to Xx. Xxxxxxx under any cash bonus or
long-term or short-term cash incentive compensation plan maintained by, or
covering employees of, the Holding Company if he had continued working for
the
Holding Company during the Remaining Unexpired Employment Period and had earned
the maximum bonus or incentive award in each calendar year that ends during
the
Remaining Unexpired Employment Period, each annual payment to be equal to the
product of:
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(A) the
maximum percentage rate at which an award was ever available to Xx. Xxxxxxx
under such incentive compensation plan; multiplied by
(B) the
salary that would have been paid to Xx. Xxxxxxx during each such calendar year
at the highest annual rate of salary achieved during that portion of the
Employment Period which is prior to Xx. Xxxxxxx'x termination of employment
with
the Holding Company;
where
such payments are to be made (without discounting for early payment) thirty
(30)
days following Xx. Xxxxxxx'x termination of employment;
(viii) Xx.
Xxxxxxx shall be deemed fully vested in all options and appreciation rights
under any stock option or appreciation rights plan or program maintained by,
or
covering employees of, the Holding Company, even if he is not vested under
such
plan or program;
(ix) Xx.
Xxxxxxx shall be deemed fully vested in all shares awarded under any restricted
stock plan maintained by, or covering employees of, the Holding Company, even
if
he is not vested under such plan.
The
Holding Company and Xx. Xxxxxxx hereby stipulate that the damages which may
be
incurred by Xx. Xxxxxxx following any such termination of employment are not
capable of accurate measurement as of the date first above written and that
the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement
of
proof of actual damage and without regard to Xx. Xxxxxxx'x efforts, if any,
to
mitigate damages. The Holding Company and Xx. Xxxxxxx further agree that the
Holding Company may condition the payments and benefits (if any) due under
sections 9(b)(iii), (iv), (v), (vi) and (vii) on the receipt, not later than
thirty (30) days after termination of employment, of Xx. Xxxxxxx'x resignation
from any and all positions which he holds as an officer, director or committee
member with respect to the Holding Company, the Bank or any subsidiary or
affiliate of either of them; provided that the Holding Company requests such
resignations in writing not later than twenty (20) days after termination of
employment.
Section
10. Termination
without Additional Holding Company Liability.
In
the
event that Xx. Xxxxxxx'x employment with the Holding Company shall terminate
during the Employment Period on account of:
(a) the
discharge of Xx. Xxxxxxx for “cause,” which, for purposes of this Agreement
shall mean personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations, or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; provided,
however,
that
Xx. Xxxxxxx shall not be deemed to have been discharged for cause unless and
until he shall have received a written notice of termination from the Board,
accompanied by a resolution duly adopted by affirmative vote of a majority
of
the entire Board at a meeting called and held for such purpose (after reasonable
notice to Xx. Xxxxxxx and a reasonable opportunity for Xx. Xxxxxxx to make
oral
and written presentations to the members of the Board, on his own behalf, or
through a representative, who may be his legal counsel, to refute the grounds
for the proposed determination) finding that in the good faith opinion of the
Board grounds exist for discharging Xx. Xxxxxxx for cause; or
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(b) Xx.
Xxxxxxx'x voluntary resignation from employment with the Bank for reasons other
than those specified in section 9(a)(i) or section 11(b);
(c) Xx.
Xxxxxxx'x death; or
(d) a
determination that Xx. Xxxxxxx is eligible for long-term disability benefits
under the Bank's long-term disability insurance program or, if there is no
such
program, under the federal Social Security Act;
then
the
Holding Company shall have no further obligations under this Agreement, other
than the payment to Xx. Xxxxxxx (or, in the event of his death, to his estate)
of his earned but unpaid compensation as of the date of the termination of
his
employment, and the provision of such other benefits, if any, to which he is
entitled as a former employee under the employee benefit plans and programs
and
compensation plans and programs maintained by, or covering employees of, the
Holding Company.
Section
11. Termination
Upon or Following a Change of Control.
(a) A
Change
of Control of the Holding Company (“Change of Control”) shall be deemed to have
occurred upon the happening of any of the following events:
(i)
approval by the stockholders of the Holding Company of a transaction that would
result in the reorganization, merger or consolidation of the Holding Company
with one or more other persons, other than a transaction following
which:
(A) at
least
51% of the equity ownership interests of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) in substantially the same relative proportions by
persons who, immediately prior to such transaction, beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51%
of
the outstanding equity ownership interests in the Holding Company;
and
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(B) at
least
51% of the securities entitled to vote generally in the election of directors
of
the entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially
the
same relative proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the securities entitled to vote generally in
the
election of directors of the Holding Company;
(ii) the
acquisition of all or substantially all of the assets of the Holding, Company
or
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the outstanding securities of the Holding
Company entitled to vote generally in the election of directors by any person
or
by any persons acting in concert, or approval by the stockholders of the Holding
Company of any transaction which would result in such an acquisition;
or
(iii) a
complete liquidation or dissolution of the Holding Company, or approval by
the
stockholders of the Holding Company of a plan for such liquidation or
dissolution; or
(iv) the
occurrence of any event if, immediately following such event, at least 50%
of
the members of the board of directors of the Holding Company do not belong
to
any of the following groups:
(A) individuals
who were members of the Board of the Holding Company on the date of this
Agreement; or
(B) individuals
who first became members of the Board of the Holding Company after the date
of
this Agreement either:
(I) upon
election to serve as a member of the Board of the Holding Company by affirmative
vote of three-quarters of the members of such board, or of a nominating
committee thereof, in office at the time of such first election; or
(II) upon
election by the stockholders of the Holding Company to serve as a member of
the
Board of the Holding Company, but only if nominated for election by affirmative
vote of three-quarters of the members of the Board of the Holding Company,
or of
a nominating committee thereof, in office at the time of such first
nomination;
provided,
however,
that
such individual's election or nomination did not result from an actual or
threatened election contest (within the meaning of Rule 14a-11 of Regulation
14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of the Board
of
the Holding Company; or
(v) any
event
which would be described in section 11(a)(i), (ii), (iii) or (iv) if the term
“Bank” were substituted for the term “Holding Company” therein.
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In
no
event, however, shall a Change of Control be deemed to have occurred as a result
of any acquisition of securities or assets of the Holding Company, the Bank,
or
any affiliate or subsidiary of either of them, by the Holding Company, the
Bank,
or any affiliate or subsidiary of either of them, or by any employee benefit
plan maintained by any of them. For purposes of this section 11(a), the term
“person” shall have the meaning assigned to it under sections 13(d)(3) or
14(d)(2) of the Exchange Act.
(b) In
the
event of a Change of Control, Xx. Xxxxxxx shall be entitled to the payments
and
benefits contemplated by section 9(b) in the event of his termination employment
with the Holding Company under any of the circumstances described in section
9(a) of this Agreement or under any of the following circumstances:
(i) resignation,
voluntary or otherwise, by Xx. Xxxxxxx at any time during the Employment Period
and within ninety (90) days following his demotion, loss of title, office or
significant authority or responsibility, or following any reduction in any
element of his package of compensation and benefits;
(ii) resignation,
voluntary or otherwise, by Xx. Xxxxxxx at any time during the Employment Period
and within ninety (90) days following any relocation of his principal place
of
employment or any change in working conditions at such principal place of
employment which is embarrassing, derogatory or otherwise adverse;
(iii) resignation,
voluntary or otherwise, by Xx. Xxxxxxx at any time during the Employment Period
following the failure of any successor to the Holding Company in the Change
of
Control to include Xx. Xxxxxxx in any compensation or benefit program maintained
by it or covering any of its executive officers, unless Xx. Xxxxxxx is already
covered by a substantially similar plan of the Holding Company. which is at
least as favorable to him; or
(iv) resignation,
voluntary or otherwise, for any reason whatsoever following the expiration
of a
transition period of thirty days beginning on the effective date of the Change
of Control (or such longer period, not to exceed ninety (90) days beginning
on
the effective date of the Change in Control, as the Bank or its successor may
reasonably request) to facilitate a transfer of management
responsibilities.
Section
12. Maximum
Limitations on Severance Benefits.
Notwithstanding
anything in this Agreement to the contrary, if (a) the making of payments and
the provision of benefits to Xx. Xxxxxxx under this Agreement would cause Xx.
Xxxxxxx to be subject to the excise tax imposed under section 4999 of the Code
and (b) the limitation of Xx. Xxxxxxx'x payments and benefits to the maximum
amount permitted without the imposition of the excise tax imposed under section
4999 of the Code would require a reduction in payments and benefits that is
less
than or equal to the excise tax that otherwise would be imposed, then the
payments and benefits made to Xx. Xxxxxxx under this Agreement shall be limited,
in such manner as Xx. Xxxxxxx, in his discretion, may determine, to the maximum
amount that may be paid without resulting in the imposition of an excise tax
under section 4999 of the Code.
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Section
13. Covenant
Not To Compete.
Xx.
Xxxxxxx hereby covenants and agrees that, in the event of his termination of
employment with the Holding Company prior to the expiration of the Employment
Period, for a period of one (1) year following the date of his termination
of
employment with the Holding Company (or, if less, for the Remaining Unexpired
Employment Period), he shall not, without the written consent of the Holding
Company, become an officer, employee, consultant, director or trustee of any
savings bank, savings and loan association, savings and loan holding company,
bank or bank holding company, or any direct or indirect subsidiary or affiliate
of any such entity, that entails working in any city, town or county in which
the Bank or the Holding Company has an office or has filed an application for
regulatory approval to establish an office, determined as of the effective
date
of Xx. Xxxxxxx'x termination of employment; provided,
however,
that
this section 13 shall not apply if Xx. Xxxxxxx'x employment is terminated for
the reasons set forth in section 9(a) or section 11(b); and provided, further,
that if Xx. Xxxxxxx'x employment shall be terminated on account of disability
as
provided in section 10(d) of this Agreement, this section 13 shall not prevent
Xx. Xxxxxxx from accepting any position or performing any services if (a) he
first offers, by written notice, to accept a similar position with, or perform
similar services for, the Holding Company on substantially the same terms and
conditions and (b) the Holding Company declines to accept such offer within
ten
(10) days after such notice is given. If
Xx.
Xxxxxxx resigns voluntarily with advance written notice, any period of
employment with the Holding Company after giving notice and before the effective
date of his termination of employment shall count as a part of the non-compete
period.
Section
14. Confidentiality.
Unless
he
obtains the prior written consent of the Holding Company, Xx. Xxxxxxx shall
keep
confidential and shall refrain from using for the benefit of himself, or any
person or entity other than the Holding Company or any entity which is a
subsidiary of the Holding Company or of which the Holding Company is a
subsidiary, any material document or information obtained from the Holding
Company, or from its parent or subsidiaries, in the course of his employment
with any of them concerning their properties, operations or business (unless
such document or information is readily ascertainable from public or published
information or trade sources or has otherwise been made available to the public
through no fault of his own) until the same ceases to be material (or becomes
so
ascertainable or available); provided,
however,
that
nothing in this section 14 shall prevent Xx. Xxxxxxx, with or without the
Holding Company’s consent, from participating in or disclosing documents or
information in connection with any judicial or administrative investigation,
inquiry or proceeding to the extent that such participation or disclosure is
required under applicable law.
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Section
15. Solicitation.
Xx.
Xxxxxxx hereby covenants and agrees that, for a period of one (1) year following
his termination of employment with the Holding Company, he shall not, without
the written consent of the Holding Company, either directly or
indirectly:
(a) solicit,
offer employment to, or take any other action intended, or that a reasonable
person acting in like circumstances would expect, to have the effect of causing
any officer or employee of the Holding Company, the Bank or any affiliate,
as of
the date of this Agreement, of either of them, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, any savings bank, savings and
loan association, bank, bank holding company, savings and loan holding company,
or other institution engaged in the business of accepting deposits and making
loans, doing business in any city, town or county in which the Bank or the
Holding Company has an office or has filed an application for regulatory
approval to establish an office, determined as of the date of this
Agreement;
(b) provide
any information, advice or recommendation with respect to any such officer
or
employee of any savings bank, savings and loan association, bank, bank holding
company, savings and loan holding company, or other institution engaged in
the
business of accepting deposits and making loans, doing business in any city,
town or county in which the Bank or the Holding Company has an office or has
filed an application for regulatory approval to establish an office, determined
as of the date of this Agreement, that is intended, or that a reasonable person
acting in like circumstances would expect, to have the effect of causing any
officer or employee of the Holding Company, the Bank, or any affiliate, as
of
the date of this Agreement, of either of them, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, such savings bank, savings
and
loan association, bank, bank holding company, savings and loan holding company,
or other institution engaged in the business of accepting deposits and making
loans; or
(c) solicit,
provide any information, advice or recommendation or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any customer of the Holding Company to terminate
an existing business or commercial relationship with the Holding
Company.
If
Xx.
Xxxxxxx resigns voluntarily with advance written notice, any period of
employment with the Holding Company after giving notice and before the effective
date of his termination of employment shall count as part of the
non-solicitation period.
Section
16. No
Effect on Employee Benefit Plans or Programs.
The
termination of Xx. Xxxxxxx’x employment during the term of this Agreement or
thereafter, whether by the Holding Company or by Xx. Xxxxxxx, shall have no
effect on the rights and obligations of the parties hereto under the Holding
Company’s qualified or non-qualified retirement, pension, savings, thrift,
profit-sharing or stock bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long-term
disability insurance plans or such other employee benefit plans or programs,
or
compensation plans or programs, as may be maintained by, or cover employees
of,
the Holding Company from time to time.
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Section
17. Successors
and Assigns.
This
Agreement will inure to the benefit of and be binding upon Xx. Xxxxxxx, his
legal representatives and testate or intestate distributees, and the Holding
Company and its successors and assigns, including any successor by merger or
consolidation or any other person or firm or corporation to which all or
substantially all of the assets and business of the Holding may be sold or
otherwise transferred. Failure of the Holding Company to obtain from any
successor its express written assumption of the Holding Company’s obligations
hereunder at least sixty (60) days in advance of the scheduled effective date
of
any such succession shall be deemed a material breach of this Agreement unless
cured within ten (10) days after notice thereof by Xx. Xxxxxxx to the Holding
Company.
Section
18. Notices.
Any
communication required or permitted to be given under this Agreement, including
any notice, direction, designation, consent, instruction, objection or waiver,
shall be in writing and shall be deemed to have been given at such time as
it is
delivered personally, or five (5) days after mailing if mailed, postage prepaid,
by registered or certified mail, return receipt requested, addressed to such
party at the address listed below or at such other address as one such party
may
by written notice specify to the other party:
If
to Xx.
Xxxxxxx:
Xx.
Xxxxx
X. Xxxxxxx
[ ]
[ ]
If
to the
Holding Company:
North
Central Bancshares, Inc.
000
Xxxxxxx Xxxxxx
X.X.
Xxx
0000
Xxxx
Xxxxx, Xxxx 00000
Attention:
Corporate
Secretary
with
a
copy to:
Xxxxxxx
Xxxxxxxx & Wood LLP
Two
World
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
W.
Xxxxxx Xxxxxx, Esq.
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Section
19. Indemnification
for Attorneys’ Fees.
From
and
after the earliest date on which a Change of Control occurs, the Holding Company
shall, indemnify, hold harmless and defend Xx. Xxxxxxx against reasonable costs,
including legal fees, incurred by him in connection with or arising out of
any
action, suit or proceeding in which he may be involved, as a result of his
efforts, in good faith, to defend or enforce the terms of this Agreement;
provided,
however,
that
Xx. Xxxxxxx shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Holding Company’s obligations hereunder shall be
conclusive evidence of Xx. Xxxxxxx’x entitlement to indemnification hereunder,
and any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise.
Section
20. Severability.
A
determination that any provision of this Agreement is invalid or unenforceable
shall not affect the validity or enforceability of any other provision
hereof.
Section
21. Waiver.
Failure
to insist upon strict compliance with any of the terms, covenants or conditions
hereof shall not be deemed a waiver of such term, covenant, or condition. A
waiver of any provision of this Agreement must be made in writing, designated
as
a waiver, and signed by the party against whom its enforcement is sought. Any
waiver or relinquishment of any right or power hereunder at any one or more
times shall not be deemed a waiver or relinquishment of such right or power
at
any other time or times.
Section
22. Counterparts.
This
Agreement may be executed in two (2) or more counterparts, each of which shall
be deemed an original, and all of which shall constitute one and the same
Agreement.
Section
23. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
federal laws of the United States and, to the extent that federal law is
inapplicable, in accordance with the laws of the State of Iowa applicable to
contracts entered into and to be performed entirely within the State of
Iowa.
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Section
24. Headings
and Construction.
The
headings of sections in this Agreement are for convenience of reference only
and
are not intended to qualify the meaning of any section. Any reference to a
section number shall refer to a section of this Agreement, unless otherwise
stated.
Section
25. Entire
Agreement; Modifications.
This
instrument contains the entire agreement of the parties relating to the subject
matter hereof, and supersedes in its entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof. No
modifications of this Agreement shall be valid unless made in writing and signed
by the parties hereto.
Section
26. Guarantee.
The
Holding Company hereby guarantees the payment by the Bank of any benefits and
compensation to which Xx. Xxxxxxx is or may be entitled to under the terms
and
conditions of the employment agreement dated as of the 14th day
of December, 2007 between the Bank and Xx. Xxxxxxx, a copy of which is
attached hereto as Exhibit A (“Bank Agreement”).
Section
27. Non-duplication.
In
the
event that Xx. Xxxxxxx shall perform services for the Bank or any other direct
or indirect subsidiary of the Holding Company, any compensation or benefits
provided to Xx. Xxxxxxx by such other employer shall be applied to offset the
obligations of the Holding Company hereunder, it being intended that this
Agreement set forth the aggregate compensation and benefits payable to Xx.
Xxxxxxx for all services to the Holding Company and all of its direct or
indirect subsidiaries.
Section
28. Survival.
The
provisions of sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 26, 29
and
30 shall survive the expiration of the Employment Period or termination of
this
Agreement.
Section
29. Equitable
Remedies.
The
Holding Company and Xx. Xxxxxxx hereby stipulate that money damages are an
inadequate remedy for violations of sections 6(a), 13, 14 or 15 of this
Agreement and agree that equitable remedies, including, without limitations,
the
remedies of specific performance and injunctive relief, shall be available
with
respect to the enforcement of such provisions.
Section
30. Required
Regulatory Provisions.
The
following provisions are included for the purposes of complying with various
laws, rules and regulations applicable to the Holding Company:
(a) Notwithstanding
anything herein contained to the contrary, in no event shall the aggregate
amount of compensation payable to Xx. Xxxxxxx under section 9(b) hereof
(exclusive of amounts described in section 9(b)(i), (viii) and (ix)) exceed
the
value of three times Xx. Xxxxxxx’x average annual total compensation for the
last five consecutive calendar years to end prior to his termination of
employment with the Holding Company (or for his entire period of employment
with
the Holding Company if less than five calendar years).
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(b) Notwithstanding
anything herein contained to the contrary, any payments to Xx. Xxxxxxx by the
Holding 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 (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated
thereunder.
(c) Notwithstanding
anything herein contained to the contrary, if Xx. Xxxxxxx is suspended from
office and/or temporarily prohibited from participating in the conduct of the
affairs of the Holding Company pursuant to a notice served under section 8(e)(3)
or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Holding
Company’s obligations under this Agreement shall be suspended as of the date of
service of such notice, unless stayed by appropriate proceedings. If the charges
in such notice are dismissed, the Holding Company, in its discretion, may.
(i)
pay to Xx. Xxxxxxx all or part of the compensation withheld while the Holding
Company’s obligations hereunder were suspended and (ii) reinstate, in whole or
in part, any of the obligations which were suspended.
(d) Notwithstanding
anything herein contained to the contrary, if Xx. Xxxxxxx is removed and/or
permanently prohibited from participating in the conduct of the Holding
Company’s affairs by an order issued under section 8(e)(4) or 8(g)(1) of the FDI
Act, 12 U.S.C. §1818(e)(4) or (g)(1), all prospective obligations of the Holding
Company under this Agreement shall terminate as of the effective date of the
order, but vested rights and obligations of the Holding Company and Xx. Xxxxxxx
shall not be affected.
(e) Notwithstanding
anything herein contained to the contrary, if the Holding Company is in default
(within the meaning of section 3(x)(1) of the FDI Act, 12 U.S.C . §1813(x)(1),
all prospective obligations of the Holding Company under this Agreement shall
terminate as of the date of default, but vested rights and obligations of the
Holding Company and Xx. Xxxxxxx shall not be affected.
(f) Notwithstanding
anything herein contained to the contrary, all prospective obligations of the
Holding Company hereunder shall be terminated, except to the extent that a
continuation of this Agreement is necessary for the continued operation of
the
Holding Company: (i) by the Director of the Office of Thrift Supervision (“OTS”)
or his designee or the Federal Deposit Insurance Corporation (“FDIC”), at the
time the FDIC enters into an agreement to provide assistance to or on behalf
of
the Holding Company under the authority contained in section 13(c) of the FDI
Act, 12 U.S.C. §1823(c); (ii) by the Director of the OTS or his designee at the
time such Director or designee approves a supervisory merger to resolve problems
related to the operation of the Holding Company or when the Holding Company
is
determined by such Director to be in an unsafe or unsound condition. The vested
rights and obligations of the parties shall not be affected.
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If
and to
the extent that any of the foregoing provisions is not, or shall cease to be,
required by applicable law, rule or regulation, the same shall become
inoperative in the case of the Holding Company as though eliminated by formal
amendment of this Agreement.
Section
31. Section
409A of the Internal Revenue Code.
Xx.
Xxxxxxx and the Holding Company acknowledge that each of the payments and
benefits promised to Xx. Xxxxxxx under this Agreement must either comply with
the requirements of Section 409A of the Code ("Section 409A") and the
regulations thereunder or qualify for an exception from compliance. To that
end,
Xx. Xxxxxxx and the Holding Company agree that (a) the payment described in
Section 9(b)(i) is intended to be exempt from Section 409A pursuant to Treasury
Regulation section 1.409A-1(b)(3) as payment made pursuant to the Holding
Company’s customary payment timing arrangement;
and (b)
the welfare benefits provided in kind under section 9 (b)(iii) are intended
to
be exempt from Section 409A as welfare benefits pursuant to Treasury Regulation
Section 1.409A-1(a)(5) and/or as benefits not includible in gross income. In
the
case of a payment that is not exempt from Section 409A, the payment shall not
be
made prior to, and shall, if necessary, be deferred (with interest at the annual
rate of 6%, compounded monthly from the date of Xx. Xxxxxxx’x termination of
employment to the date of actual payment) to and paid on the later of the
earliest date on which Xx. Xxxxxxx experiences a separation from service (within
the meaning of Treasury Regulation Section 1.409A-1(h)) and, if Xx. Xxxxxxx
is a
specified employee (within the meaning of Treasury Regulation Section
1.409A-1(i)) on the date of his separation from service, the first day of the
seventh month following Xx. Xxxxxxx’x separation from service. Furthermore, this
Agreement shall be construed and administered in such manner as shall be
necessary to effect compliance with Section 409A and shall be subject to
amendment in the future, in such manner as the Holding Company may deem
necessary or appropriate to effect such compliance; provided that any such
amendment shall preserve for Xx. Xxxxxxx the present value of the payments
due
under this Agreement.
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In
Witness Whereof,
the
Holding Company has caused this Agreement to be executed and Xx. Xxxxxxx has
hereunto set his hand, all as of the day and year first above
written.
|
/s/
Xxxxx X. Xxxxxxx
|
||||
|
Xxxxx
X. Xxxxxxx
|
||||
|
ATTEST:
|
North
Central Bancshares, Inc.
|
|||
|
By:
|
/s/
Xxxxx X. Xxxxxx
|
By:
|
/s/
C. Xxxxxx Xxxxxxxxx
|
|
|
Secretary
|
Name:
C. Xxxxxx Xxxxxxxxx
|
|||
|
Title:
Executive Vice President
|
||||
Page
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|
)
|
||
|
:
ss.:
|
||
|
COUNTY
OF XXXXXXX
|
)
|
On
this
_________ day of _______________________, before me personally came Xxxxx X.
Xxxxxxx, to me known, and known to me to be the individual described in the
foregoing instrument, who, being by me duly sworn, did depose and say that
he
resides at the address set forth in said instrument, and that he signed his
name
to the foregoing instrument.
On
this
__________ day of _______________________, before me personally came
_____________________ to me known, who, being by me duly sworn, did depose
and
say that he resides at
_____________________________________________________________, that he is
_____________________________________of North
Central Bancshares, Inc.,
the
Iowa corporation described in and which executed the foregoing instrument;
that
he knows the seal of said corporation; that the seal affixed to said instrument
is such seal; that it was so affixed by order of the Board of Directors of
said
corporation; and that he signed his name thereto by like order.
|
Notary
Public
|
Page
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