EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made effective as of September 13, 2023 (the “Effective Date”), by and between Catalyst Bank (the “Bank”) and Xxxxxx Xxxxxxxxxx (“Executive”).
WHEREAS, the Bank wishes to assure itself of the services of Executive for the period provided in this Agreement; and
WHEREAS, in order to continue Executive’s employment with the Bank and to provide incentive for Executive to achieve the financial and performance objectives of the Bank, the parties desire to enter into this Agreement; and
WHEREAS, the Bank desires to set forth the rights and responsibilities of Executive and the compensation payable to Executive, as modified from time to time.
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:
During the term of this Agreement, Executive agrees to serve as Director of Operations (the “Executive Position”), and will perform the duties and will have all powers associated with that position as set forth in any job description provided to Executive by the Bank, and as may be set forth in the bylaws of the Bank or as directed by the Board of Directors of the Bank (the “Board of Directors”), Bank officers, or appropriate committee. Executive will devote substantially all of her working time, attention and energies (other than absences due to illness or vacation) to the performance of her duties for the Bank. Executive may engage in other business activities to the extent such activities do not create a conflict of interest or materially interfere with the Executive’s ability to perform her duties. Executive will disclose such other business activities to the Board of Directors on an annual basis, or such time that there is a change in those activities. During the term of this Agreement, Executive also agrees to serve, if elected, as an officer of any subsidiary or affiliate of the Bank and in that capacity will carry out the duties and responsibilities reasonably appropriate to that office.
(a)Term and Renewal. The initial term of this Agreement and the period of Executive’s employment hereunder shall begin as of the Effective Date and shall continue for three years thereafter, ending on September 12, 2026. The Board of Directors (other than Executive, if applicable) will review the Agreement prior to the expiration of the term for the purpose of determining whether to extend the term of the Agreement for another three years or such other time period as mutually agreed upon by the parties.
(b)Change in Control. Notwithstanding the foregoing, in the event the Bank enters into an agreement to effect a transaction that would be considered a Change in Control as defined
under Section 5 of this Agreement, the term of this Agreement shall be extended automatically for two (2) years following the effective date of the Change in Control.
(c)Membership on Other Boards of Directors or Organizations. During the period of her employment hereunder, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence, Executive will devote all of her business time, attention, skill and efforts to the faithful performance of her duties under this Agreement, including activities and duties related to the Executive Position. Notwithstanding the preceding sentence, subject to the approval of the Board of Directors, Executive may serve as a member of the board of directors of business, community and charitable organizations, provided that in each case the service shall not materially interfere with the performance of her duties under this Agreement, adversely affect the reputation of the Bank or any affiliates of the Bank (as determined by the Board of Directors), or present any conflict of interest.
(d)Continued Employment Following Expiration of Term. Nothing in this Agreement shall mandate or prohibit a continuation of Executive’s employment following the expiration of the term of this Agreement.
(a)Base Salary. In consideration of Executive’s performance of the responsibilities and duties set forth in this Agreement, the Bank will provide Executive the compensation specified in this Agreement. The Bank will pay Executive a salary of at least $147,000 per year (“Base Salary”). Base Salary will be payable in accordance with the customary payroll practices of the Bank, beginning on the first regularly scheduled pay day after the Effective Date. During the term of this Agreement, Executive’s Base Salary shall be reviewed at least annually by December 31st of each year. The review shall be conducted by the Board of Directors or by a committee designated by the Board of Directors. The designated committee or the Board of Directors may increase Executive’s Base Salary at any time. Any change in Base Salary will become the new “Base Salary” for purposes of this Agreement, beginning on the first regularly scheduled pay day after the date of the change, or such date as set by the Board.
(b)Bonus/Incentive Pay. Executive shall be eligible to participate in any bonus plan or incentive pay arrangement or other similar arrangement of the Bank in which senior management is eligible to participate. Executive shall also be eligible for discretionary bonuses, as determined by the Board of Directors in its discretion. Nothing paid to Executive under any such plan or arrangement will be deemed to be in lieu of the other compensation to which Executive is entitled under this Agreement.
(c)Benefit Plans. Executive will be entitled to participate in all employee benefit plans, arrangements and perquisites offered to employees and officers of the Bank. Without limiting the generality of the foregoing provisions of this Section 3(c), Executive also will be
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entitled to participate in any employee benefit plans, including but not limited to retirement plans, profit-sharing plans, health-and-accident plans, or any other employee benefit plan or arrangement made available by the Bank in the future to employees, subject to and on a basis consistent with the terms, conditions and overall administration of the plans and arrangements.
(d)Paid Time Off. Executive will be entitled to paid time off each year during the term of this Agreement measured on a calendar year basis, in accordance with the Bank’s customary practices, as well as sick leave, holidays and other paid absences in accordance with the Bank’s policies and procedures for officers. Any unused paid time off during an annual period will be treated in accordance with the Bank’s personnel policies, which govern all other employees.
(e)Expense Reimbursements. The Bank will reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred by Executive during the course of performing her obligations under this Agreement, including, without limitation, reimbursement for memberships in such organizations as Executive and the Board of Directors mutually agree are necessary and appropriate in connection with the performance of her duties under this Agreement, upon substantiation of the expenses in accordance with applicable policies and procedures of the Bank and approval of expenses by the Board. All reimbursements pursuant to this Section 3(e) shall be paid promptly by the Bank and in any event no later than 30 business days following the date on which the expense was incurred.
| 4. | TERMINATION AND TERMINATION PAY. |
Subject to Section 5 of this Agreement, which governs the occurrence of a Change in Control, Executive’s employment under this Agreement may be terminated in the following circumstances:
(a)Death. Executive’s employment under this Agreement and this Agreement will terminate upon her death during the term of this Agreement, in which event Executive’s estate or beneficiary shall be paid Executive’s Base Salary at the rate in effect at the time of Executive’s death for a period of twelve (12) workweeks beginning the first week after Executive’s death (payable in accordance with the regular payroll practices of the Bank). In addition, for that same period of time following Executive’s death, the Bank will continue to provide medical coverage substantially comparable to the coverage maintained by the Bank for Executive and her family immediately prior to Executive’s death. The continued benefits will be fully paid for by the Bank.
(b)Disability. This Agreement and Executive’s employment under this Agreement shall terminate in the event of Executive’s “Disability,” at the election of the Board of Directors, in its sole discretion. “Disability” shall mean Executive’s permanent and total physical or mental impairment that restricts Executive from performing all the essential functions of normal employment with or without reasonable accommodation. Executive waives any right to receive any compensation or benefits under this Agreement on account of her Disability or her termination
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of employment on account of a Disability, except for benefits that have vested and been earned prior to the date of termination, including insurance benefits.
(c)Termination for Cause. The Board of Directors may immediately terminate Executive’s employment and this Agreement at any time for “Cause.” Executive shall have no right to receive any compensation or benefits under this Agreement upon her termination for Cause, except for benefits that have vested and been earned prior to the date of termination. Termination for “Cause” shall mean termination because of, in the good faith determination of the Board of Directors, Executive’s:
(i)material act of dishonesty or fraud in performing Executive’s duties on behalf of the Bank;
(ii)willful misconduct that causes economic damage to the Bank or injury to the business reputation of the Bank;
(iii)Executive’s misuse of drugs (including alcohol), which materially affects her ability to perform duties outlined herein;
(iv)breach of fiduciary duty involving personal profit;
(v)intentional failure to perform stated duties under this Agreement after written notice thereof from the Board of Directors;
(vi)willful violation of any law, rule or regulation (other than traffic violations or similar offenses which results only in a fine or other non-custodial penalty) that reflect adversely on the reputation of the Bank, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or
(vii)material breach by Executive of any provision of this Agreement not cured by Executive within thirty (30) days of the date the Executive received the Notice of Breach, and, in the event Executive does not cure any such condition, the Bank terminates her employment within thirty (30) days after the period for curing the condition has expired. If the Executive remedies the condition within such thirty (30) day cure period, then no Cause shall be deemed to exist with respect to such condition; provided, that the Executive shall not have the opportunity to cure if the breach is not susceptible to being cured or such an opportunity would otherwise conflict with applicable federal or state regulatory requirements.
(d)Voluntary Termination by Executive. Executive may voluntarily terminate employment and this Agreement during the term of this Agreement upon at least 60 calendar days prior written notice to the Board of Directors, which period may be waived by the Board of Directors, in its sole discretion. Upon Executive’s voluntary termination (other than a termination for “Good Reason,” as provided for in Section 4(e) of this Agreement), Executive waives any right to receive any compensation or benefits under this Agreement, except for benefits that have vested and been earned prior to the date of termination.
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(e)Termination Without Cause or With Good Reason.
| (i) | The Board of Directors may immediately terminate Executive’s employment and this Agreement at any time for a reason other than Cause (a termination “Without Cause”), and Executive may, by written notice to the Board of Directors, terminate her employment and this Agreement at any time within 60 calendar days following an event constituting “Good Reason,” as defined below (a termination “With Good Reason”); provided, however, that the Bank shall have 30 calendar days to cure the “Good Reason” condition, but the Board of Directors may waive its right to cure. Any termination of Executive’s employment and this Agreement Without Cause or With Good Reason, shall have no effect on or prejudice the earned and accrued rights of Executive under the Bank’s qualified or non-qualified retirement, savings, thrift, profit-sharing or bonus plans, group life, health (including hospitalization, medical and major medical), accident and long term disability insurance plans or other employee benefit plans or programs, or compensation plans or programs in which Executive was a participant. |
| (ii) | In the event of termination as described under Section 4(e)(i) and subject to the requirements of Section 4(e)(v), the Bank shall pay Executive, or in the event of Executive’s subsequent death, Executive’s beneficiary or estate, as the case may be, as severance pay, a cash lump sum payment equal to the amount of Base Salary that would have been earned by Executive had she remained employed with the Bank for 12 months. The payment shall be made to Executive within 60 calendar days following Executive’s date of termination and will be subject to applicable withholding taxes. |
| (iii) | In addition, if the Executive chooses to continue health insurance coverage pursuant to COBRA, the Bank will pay one hundred percent (100%) of the premiums for her group health insurance for a period expiring on the earlier of (i) 12 months from the date of termination or (ii) the date on which she receives substantially comparable coverage and benefits under the health insurance plan of a subsequent employer. If Executive elects continuing coverage pursuant to COBRA beyond 12 months from the date of termination, the Executive will be responsible for paying the premiums and any other costs associated with this coverage. The period of continued health coverage required by Section 4980B(f) of the Internal Revenue Code of 1986, as amended (the “Code”), shall run concurrently with the coverage period provided herein. |
| (iv) | “Good Reason” exists if, without Executive’s express written consent, any of the following occur: |
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| (v) | Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4(e) unless and until Executive executes a release of her claims against the Bank and any affiliate of the Bank, and their officers, directors, successors and assigns, releasing them from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act (“ADEA”), but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive has earned said benefits, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement. In order to comply with the requirements of Code Section 409A and the ADEA, the release shall be provided to Executive no later than seven (7) calendar days from her Separation from Service (as defined in Section 13(c) of this Agreement) and Executive shall have no fewer than 21 calendar days to consider the release, and following Executive’s execution of the release, Executive shall have seven (7) calendar days to revoke said release. |
(f)Effect on Status as a Director. In the event of Executive’s termination of employment under this Agreement and this Agreement for any reason, the termination shall also constitute Executive’s resignation from the Board of Directors, as well as the board of directors of any affiliates of the Bank, to the extent the Executive is then serving in such capacity.
| 5. | CHANGE IN CONTROL. |
(a)Change in Control Defined. For purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following events:
| (i) | Merger: The Bank or any holding company of the Bank merges into or consolidates with another entity whereby the Bank or the holding company is not the surviving entity, or the Bank or the holding company merges another bank or corporation into the Bank or the holding company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the holding company or the Bank immediately before the merger or consolidation; |
| (ii) | Acquisition of Significant Share Ownership: There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the holding company’s or the Bank’s voting |
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| securities; provided, however, this clause (ii) shall not apply to beneficial ownership of the holding company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the holding company directly or indirectly beneficially owns 50% or more of its outstanding voting securities; |
| (iii) | Sale of Assets: The holding company or the Bank sells to a third party all or substantially all of its assets. |
Notwithstanding anything herein to the contrary, a Change in Control shall not be deemed to have occurred following a reorganization of the Bank as the wholly-owned subsidiary of a holding company in a standard conversion or a mutual holding company reorganization or a subsequent reorganization of the Bank, its stock holding company or a mutual holding company solely within their corporate structure or upon a second-step conversion.
(b)Change in Control Benefits. Upon the occurrence of the termination of Executive’s employment and this Agreement Without Cause or With Good Reason on the Effective Date of the Change in Control, or within 30 calendar days after a Change in Control, the Bank (or any successor) shall pay Executive, or in the event of Executive’s subsequent death, Executive’s beneficiary or estate, as severance pay an amount equal to 12 months the greater of the Base Salary at the time of the Change in Control or the date of termination. The payment will be made in a lump sum within 60 calendar days following Executive’s date of termination and will be subject to applicable withholding taxes. In addition, if the Executive chooses to continue health insurance coverage pursuant to COBRA, the Bank will pay one hundred percent (100%) of the premiums for her group health insurance for a period expiring on the earlier of (i) 12 months from the date of termination or (ii) the date on which she receives substantially comparable coverage and benefits under the health insurance plan of a subsequent employer. If Executive elects continuing coverage pursuant to COBRA beyond 12 months from the date of termination, the Executive will be responsible for paying the premiums and any other costs associated with this coverage. The period of continued health coverage required by Section 4980B(f) of the Code shall not run concurrently with the coverage period provided herein. Notwithstanding the foregoing, the payments and benefits provided in this Section 5(b) shall be payable to Executive in lieu of any payments or benefits that are payable under Section 4(e) of this Agreement.
| (i) | 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 Bank, or any of its respective subsidiaries or affiliates, to terminate her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any business whatsoever that |
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| competes with the business of the Bank, or any of their direct or indirect subsidiaries or affiliates, that has headquarters or offices within St. Landry Parish, Lafayette Parish, Xxxxxxxxxx Xxxxxx, Acadia Parish, Avoyelles Parish, and Pointe Coupee Parish (the “Restricted Territory”); or |
| (ii) | 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 Bank to terminate an existing business or commercial relationship with the Bank. |
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During the Employment Period and for a period of twelve (12) months thereafter, the Bank agrees that it will not issue any statement (written or oral) that could reasonably be perceived as disparaging to the Executive. During the Employment Period and for a period of twelve (12) months thereafter, the Executive agrees that she will not make any statement (written or oral) that could reasonably be perceived as disparaging to the Bank or any person or entity that she reasonably should know is an affiliate of the Bank.
All payments provided in this Agreement shall be timely paid by check or direct deposit from the general funds of the Bank (or any successor of the Bank).
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| 9. | EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS AND REPRESENTATIONS. |
(a)Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.
(b)The Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.
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Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil litigation and without any trial by jury to resolve such claims, conducted by a single arbitrator mutually acceptable to the Bank and Executive, sitting in a location selected by the Bank within 25 miles from the main office of the Bank, in accordance with the rules of the American Arbitration Association’s National Rules for the Resolution of Employment Disputes then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
Notwithstanding anything herein contained to the contrary, the following provisions shall apply:
(a)The Board of Directors may terminate Executive’s employment and this Agreement at any time, but any termination by the Board of Directors, other than a termination for Cause, shall not prejudice Executive’s right to compensation or other benefits under this Agreement. Executive must attempt to mitigate the amount of any payments due under this Agreement after Executive’s termination of employment other than for Cause. Executive shall have no right to receive compensation or other benefits under this Agreement for any period after Executive’s termination of employment for Cause.
(b)Notwithstanding anything herein contained to the contrary, any payments to Executive by the Bank or the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.
(c)Notwithstanding anything else in this Agreement to the contrary (with the exception of Section 4(c)(i)), Executive’s employment shall not be deemed to have been terminated unless and until Executive has a Separation from Service within the meaning of Code Section 409A. For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that either no further services will be performed by Executive after the date of termination (whether as an employee or as an independent contractor) or the level of further services performed is less than 50 percent of the average level of bona fide services in the 36 months immediately preceding the termination. For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). Notwithstanding the foregoing, this Section 12(c) shall not apply in the event of the Executive’s termination for Cause.
(d)Notwithstanding the foregoing, if Executive is a “specified employee” (i.e., a “key employee” of a publicly-traded company within the meaning of Section 409A of the Code and the final regulations issued thereunder) and any payment under this Agreement is triggered due to Executive’s Separation from Service, then solely to the extent necessary to avoid penalties under Section 409A of the Code, no payment shall be made during the first six (6) months following Executive’s Separation from Service. Rather, any payment which would otherwise be paid to
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Executive during that period will be accumulated and paid to Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent payments will be paid in the manner specified in this Agreement.
(e)If the Bank cannot provide Executive or Executive’s dependents any continued health insurance or other welfare benefits as required by this Agreement because Executive is no longer an employee, applicable rules and regulations prohibit such benefits or the payment of such benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive or Executive’s beneficiary or estate in the event of death a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination. The cash payment will be made in a lump sum within 60 calendar days after the later of Executive’s date of termination or the effective date of the rules or regulations prohibiting the provision of such benefits or subjecting the Bank to penalties.
(f)To the extent not specifically provided in this Agreement, any compensation or reimbursements payable to Executive shall be paid or provided no later than two and one-half (2.5) months after the calendar year in which such compensation is no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulation Section 1.409A-1(d).
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 other provision and part thereof shall to the full extent consistent with law continue in full force and effect.
This Agreement shall be governed by the laws of the State of Louisiana but only to the extent not superseded by federal law.
To the extent that such payment(s) may be made without triggering penalty under Code Section 409A, all reasonable legal fees paid or incurred by Executive pursuant to any dispute relating to this Agreement shall be paid or reimbursed by the Bank provided that the dispute is resolved in Executive’s favor, and the reimbursement shall occur no later than 60 calendar days after the end of the year in which the dispute is settled or resolved in Executive’s favor.
The Bank shall provide Executive (including Executive’s heirs, executors and administrators) with coverage under a standard directors’ and officers’ liability insurance policy at its expense, and shall indemnify Executive (and Executive’s heirs, executors and administrators) for the term of the Agreement and for a period of six (6) years thereafter to the fullest extent permitted under applicable law against all expenses and liabilities reasonably incurred by Executive in connection with or arising out of any action, suit or proceeding in which she may be involved by reason of Executive having been a director or officer of the Bank or any subsidiary or
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affiliate 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 of Directors, as appropriate); 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.
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 delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:
To the Bank | Catalyst Xxxx 000 X Xxxxx Xxxxxx Xxxxxxxxx, XX 00000 Xxxxxxxxx: Chairman of the Board of Directors |
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To Executive: | Most recent address on file with the Bank. |
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
CATALYST BANK | |
By: | /s/ Xxxxxx Xxxxx |
Name: | Xxxxxx Xxxxx |
Title | President and CEO |
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EXECUTIVE | |
By: | /s/ Xxxxxx Xxxxxxxxxx |
Name: | Xxxxxx Xxxxxxxxxx |
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