Exhibit 10.4
EXHIBIT 10.4
EMPLOYMENT AGREEMENT WITH XXXXX XXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this ____ day of ___________________, 1998, by and between FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION OF INDEPENDENCE, Independence, Kansas (the "Association")
and Xxxxxxxx X. Xxxxxx (the "Employee").
WHEREAS, the services of the Employee are of a special, unique and
unusual character which gives them distinctive value and the Association desires
that the Employee continue after the merger of Neodesha Savings and Loan
Association, FSA ("Neodesha") into the Association to render services to the
Association, in accordance with the terms and conditions set forth herein; and
WHEREAS, the Employee desires to be employed by the Association
pursuant to the terms of this Agreement;
WHEREAS, the Board of Directors recognizes that, as is the case with
publicly held corporations generally, the possibility of a change in control of
the Association or its parent, First Independence Corporation (the "Holding
Company") may exist, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of the Association, the Holding Company and its
stockholders; and
WHEREAS, the Board of Directors believes it is in the best interests of
the Association to enter into this Agreement with the Employee in order to
assure continuity of management of the Association and to reinforce and
encourage the continued attention and dedication of the Employee to his assigned
duties; and
WHEREAS, the Board of Directors has approved and authorized the
execution of this Agreement with the Employee to take effect as stated in
Section 4 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:
1. Employment. The Employee will be employed as a Vice President of the
Association. As a Vice President, the Employee shall render administrative and
management services as are customarily performed by persons situated in similar
executive capacities, and shall have other powers and duties as may from time to
time be prescribed by the Board, provided that such duties are consistent with
the Employee's position as a Vice President. The Employee shall continue to
devote his best efforts and substantially all his business time and attention to
the business and affairs of the Association and its Holding Company and
affiliated companies.
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2. Compensation.
(a) Salary. The Association agrees to pay the Employee during the term
of this Agreement a salary established by the Board of Directors. The
salary hereunder as of the Commencement Date (as defined in Section 4
hereof) shall be at least the Employee's current salary of $______ per
annum. The salary provided for herein shall be payable not less frequently
than monthly in accordance with the practices of the Association, provided,
however, that no such salary is required to be paid by the terms of this
Agreement in respect of any month or portion thereof subsequent to the
termination of this Agreement and provided further, that the amount of such
salary shall be reviewed by the Association not less often than annually
and may be increased (but not decreased) from time to time in such amounts
as the Association in its discretion may decide, subject to the customary
withholding tax and other employee taxes as required with respect to
compensation paid by a corporation to an employee.
(b) Discretionary Bonuses. The Employee shall be entitled to
participate in an equitable manner with all other officers of the
Association in discretionary bonuses as authorized and declared by the
Board of Directors of the Association for its employees. No other
compensation provided for in this Agreement shall be deemed a substitute
for the Employee's right to participate in such bonuses when and as
declared by the Board of Directors.
(c) Expenses. During the term of his employment hereunder, the
Employee shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him in accordance with policies and
procedures at least as favorable to the Employee as those presently
applicable to the officers of the Association, provided that the Employee
properly accounts therefor in accordance with Association policy.
3. Benefits.
(a) Participation in Retirement and Employee Benefit Plans. The
Employee shall be entitled while employed hereunder to participate in, and
receive benefits under, all plans relating to stock options, stock
purchases, pension, thrift, profit-sharing, group life insurance, medical
coverage, education, cash or stock bonuses, and other retirement or
employee benefits or combinations thereof, that are now or hereafter
maintained for the benefit of the Association's employees generally.
(b) Fringe Benefits. The Employee shall be eligible while employed
hereunder to participate in, and receive benefits under, any other fringe
benefits which are or may become applicable to the Association's employees
generally. The Employee will also be entitled while employed hereunder to
the exclusive use of car (of a type and class and in a manner similar to
that made available to the Employee by Neodesha immediately prior to the
Commencement Date (as defined in Section 4 hereof)). While the Employee is
employed hereunder, the Association further agrees to maintain that certain
key man life insurance policy on the life of the Employee maintained by
Neodesha immediately prior to the Commencement Date (as defined in Section
4 hereof) (or a similar such policy as mutually agreed to by the Board of
Directors of the Association and the Employee).
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4. Term. The term of employment under this Agreement shall be a period
of three (3) years commencing on the date of consummation of the merger with
Neodesha (the "Commencement Date"), subject to earlier termination as provided
herein.
5. Vacations. The Employee shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as vacation time, provided that:
(a) The Employee shall be entitled to an annual vacation of not less
than three (3) weeks per year;
(b) The timing of vacations shall be scheduled in a reasonable manner
by the Employee; and
(c) Management shall, solely at the Employee's request, be entitled to
grant to the Employee a leave or leaves of absence with or without pay at
such time or times and upon such terms and conditions as management, in its
discretion, may determine.
6. Termination of Employment; Death.
(a) The Board of Directors may terminate the Employee's employment at
any time, but any termination by the Association's Board of Directors,
other than termination for cause, shall not prejudice the Employee's right
to compensation or other benefits under the Agreement. If the employment of
the Employee is involuntarily terminated, other than for "cause" as
provided in this Section 6(a) or pursuant to any of Sections 6(d) through
6(g), or by reason of death or disability as provided in Sections 6(c) or
7, the Employee shall be entitled to receive, for the period that, but for
the termination of employment, would have constituted the remaining term of
the Agreement, (i) his salary at the rate then applicable, payable in such
manner and at such times as such salary would have been payable to the
Employee under Section 2 had he remained in the employ of the Association,
and (ii) health insurance benefits as maintained by the Association for the
benefit of its employees generally.
The terms "termination" or "involuntarily terminated" in this
Agreement shall refer to the termination of the employment of Employee
without his express written consent. The Employee shall be considered to be
involuntarily terminated (1) if the employment of the Employee is
involuntarily terminated for any reason other than for "cause" as provided
in this Section 6(a), pursuant to any of Sections 6(d) through 6(g) or by
reason of death or disability as provided in Sections 6(c) and 7; or (2)
there occurs a material diminution of or interference with the Employee's
duties, responsibilities and benefits as a Vice President of the
Association. By way of example and not by way of limitation, any of the
following actions, if unreasonable or materially adverse to the Employee,
shall constitute such diminution or interference unless consented to in
writing by the Employee: (i) a change in the principal workplace of the
Employee to a location more than twenty-five (25) miles from the
Association's Neodesha branch office; (ii) a material demotion of the
Employee, a reduction in the number or seniority of other Association
personnel reporting to the Employee, or a reduction in the frequency with
which, or in the nature of the matters with respect
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to which, such personnel are to report to the Employee, other than as part
of an Association-wide reduction in staff; or (iii) a reduction or adverse
change in the salary, perquisites, benefits, contingent benefits or
vacation time which had theretofore been provided to the Employee, other
than as part of an overall program applied uniformly and with equitable
effect to all members of the senior management of the Association.
In case of termination of the Employee's employment for cause, the
Association shall pay the Employee his salary through the date of
termination, and the Association shall have no further obligation to the
Employee under this Agreement. The Employee shall have no right to receive
compensation or other benefits for any period after termination for cause.
For purposes of this Agreement, termination for "cause" shall include
termination because of the Employee's personal dishonesty, incompetence,
willful misconduct, breach of a 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 material breach of any provision of this
Agreement. Notwithstanding the foregoing, the Employee shall not be deemed
to have been terminated for cause unless and until there shall have been
delivered to the Employee a copy of a resolution, duly adopted by the
affirmative vote of not less than a majority of the disinterested members
of the Board of Directors of the Association at a meeting of the Board
called and held for such purpose (after reasonable notice to the Employee
and an opportunity for the Employee, together with the Employee's counsel,
to be heard before the Board), stating that in the good faith opinion of
the Board the Employee was guilty of conduct constituting "cause" as set
forth above and specifying the particulars thereof in detail.
(b) The Employee's employment may be voluntarily terminated by the
Employee at any time upon 90 days written notice to the Association or upon
such shorter period as may be agreed upon between the Employee and the
Board of Directors of the Association. In the event of such voluntary
termination, the Association shall be obligated to continue to pay the
Employee his salary only through the date of termination, at the time such
payments are due, and the Association shall have no further obligation to
the Employee under this Agreement.
(c) In the event of the death of the Employee during the term of
employment under this Agreement and prior to any termination hereunder, the
Employee's estate, or such person as the Employee may have previously
designated in writing, shall be entitled to receive from the Association
the salary of the Employee through the last day of the calendar month in
which his death shall have occurred.
(d) If the Employee is suspended from office and/or temporarily
prohibited from participating in the conduct of the Association's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e)(3); (g)(1), the Association's
obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Association may in its discretion (i) pay the
Employee all or part of the compensation withheld while its obligations
under this Agreement were suspended and (ii) reinstate in whole or in part
any of the obligations which were suspended.
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(e) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Association's affairs
by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C.
ss. 1818(e)(4); (g)(1), all obligations of the Association under this
Agreement shall terminate, as of the effective date of the order, but
vested rights of the parties shall not be affected.
(f) If the Association becomes in default (as defined in Section
3(x)(1) of the FDIA, 12 U.S.C. ss. 1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but this provision
shall not affect any vested rights of the parties.
(g) All obligations under this Agreement shall be terminated, except
to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Association: (i) by the Director of the
Office of Thrift Supervision ("OTS") or his or her designee at the time the
Federal Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Association under the authority contained
in Section 13(c) of the FDIA, 12 U.S.C. ss. 1823(c); or (ii) by the
Director of the OTS or his or her designee at the time the Director of the
OTS or his or her designee approves a supervisory merger to resolve
problems related to operation of the Association or when the Association is
determined by the Director of the OTS to be in an unsafe or unsound
condition.
Any rights of the parties that have already vested, however, shall not
be affected by any such action.
(h) In the event the Association purports to terminate the Employee
for cause, but it is determined by a court of competent jurisdiction or by
an arbitrator pursuant to Section 16 that cause did not exist for such
termination, or if in any event it is determined by any such court or
arbitrator that the Association has failed to make timely payment of any
amounts owed to the Employee under this Agreement, the Employee shall be
entitled to reimbursement for all reasonable costs, including attorneys'
fees, incurred in challenging such termination or collecting such amounts.
Such reimbursement shall be in addition to all rights to which the Employee
is otherwise entitled under this Agreement.
7. Disability. If during the term of employment hereunder the Employee
shall become disabled or incapacitated to the extent that he is unable to
perform the duties of the Vice President, he shall be entitled to receive
disability benefits of the type provided for other employees of the Association.
While he receives such benefits, the rights of the Employee to receive the
salary stated in Section 2 hereof shall be suspended.
8. Change in Control.
(a) Involuntary Termination. If the Employee's employment is
involuntarily terminated (other than for cause or pursuant to any of
Sections 6(c) through 6(g) or Section 7 of this Agreement) in connection
with or within 18 months after a change in control of the Association or
the Holding Company which occurs at any time during the term of employment
under this Agreement, the Association shall pay to the Employee in a lump
sum in cash within 25 business
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days after the Date of Termination (as hereinafter defined) of employment
an amount equal to 299 percent of the Employee's "base amount" of
compensation, as defined in Section 280G(b)(3) of the Internal Revenue Code
of 1986, as amended ("Code").
(b) Definitions. The term "Date of Termination" means the earlier of
(i) the date upon which the Association gives notice to the Employee of the
termination of his employment with the Association, or (ii) the date upon
which the Employee ceases to serve as an Employee of the Association.
The term "change in control" is defined solely as any acquisition of
control of the Association or the Holding Company (other than by a trustee
or other fiduciary holding securities under an employee benefit plan of the
Association or the Holding Company), as defined in 12 C.F.R. ss. 574.4, or
any successor regulation, which would require the filing of an application
for acquisition of control or notice of change in control as set forth in
12 C.F.R. ss. 574.3, or any successor regulation.
9. Certain Reduction of Payments by the Association. (a) Anything in
this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Association to or for the
benefit of the Employee (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise) (a "Payment") would be
nondeductible (in whole or part) by the Association for Federal income tax
purposes because of Section 280G of the Code, then the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement ("Agreement Payments") shall be reduced to the
Reduced Amount. The "Reduced Amount" shall be an amount, not less than zero,
expressed in present value, which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be nondeductible by the
Association because of Section 280G of the Code. For purposes of this Section 9,
present value shall be determined in accordance with Section 280G(d)(4) of the
Code.
(b) All determinations required to be made under this Section
9 shall be made by the Association's independent auditors, or at the election of
such auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Association, provide to both the Association
and the Employee an opinion (and detailed supporting calculations) that the
Association has substantial authority to deduct for federal income tax purposes
the full amount of the Agreement Payments and that the Employee has substantial
authority not to report on his federal income tax return any excise tax imposed
by Section 4999 of the Code with respect to the Agreement Payments. Any such
determination and opinion by the Advisory Firm shall be binding upon the
Association and the Employee. The Employee shall determine which and how much,
if any, of the Agreement Payments shall be eliminated or reduced consistent with
the requirements of this Section 9, provided that, if the Employee does not make
such determination within ten business days of the receipt of the calculations
made by the Advisory Firm, the Association shall elect which and how much, if
any, of the Agreement Payments shall be eliminated or reduced consistent with
the requirements of this Section 9 and shall notify the Employee promptly of
such election. Within five business days of the earlier of (i) the Association's
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receipt of the Employee's determination pursuant to the immediately preceding
sentence of this Agreement, or (ii) the Association's election in lieu of such
determination, the Association shall pay to or distribute to or for the benefit
of the Employee such amounts as are then due the Employee under this Agreement.
The Association and the Employee shall cooperate fully with the Advisory Firm,
including without limitation providing to the Advisory Firm all information and
materials reasonably requested by it, in connection with the making of the
determinations required under this Section 9.
(c) As a result of uncertainty in application of Section 280G
of the Code at the time of the initial determination by the Advisory Firm
hereunder, it is possible that Agreement Payments will have been made by the
Association which should not have been made ("Overpayment") or that additional
Agreement Payments will not have been made by the Association which should have
been made ("Underpayment"), in each case, consistent with the calculations
required to be made hereunder. In the event that the Advisory Firm, based upon
the assertion by the Internal Revenue Service against the Employee of a
deficiency which the Advisory Firm believes has a high probability of success,
determines that an Overpayment has been made, any such Overpayment paid or
distributed by the Association to or for the benefit of Employee shall be
treated for all purposes as a loan ab initio which the Employee shall repay to
the Association together with interest at the applicable federal rate provided
for in Section 7872(f)(2) of the Code; provided, however, that no such loan
shall be deemed to have been made and no amount shall be payable by the Employee
to the Association if and to the extent such deemed loan and payment would not
either reduce the amount on which the Employee is subject to tax under Section 1
and Section 4999 of the Code or generate a refund of such taxes. In the event
that the Advisory Firm, based upon controlling preceding or other substantial
authority, determines that an Underpayment has occurred, any such Underpayment
shall be promptly paid by the Association to or for the benefit of the Employee
together with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code.
(d) The total of payments to the Employee in the event of
involuntary termination of employment under Section 6(a) and Section 8(a) shall
not exceed three times his average annual compensation from the Association over
the most recent five taxable years (or, if employed by the Association for a
shorter period, over the period of his employment by the Association).
(e) Any payments made to the Employee pursuant to this
Agreement, or are subject to and conditioned upon their compliance with 12
U.S.C. ss. 1828(k) and any regulations promulgated thereunder. Notwithstanding
anything in this Agreement to the contrary, no payments may be made pursuant to
this Agreement without the prior approval of the OTS if the Association is not
in compliance with its regulatory capital requirements, or if such payment would
cause the Association to fail its regulatory capital requirements.
10. No Assignments. (a) This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Association will require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Association, by an assumption agreement in form and substance satisfactory to
the Employee, to expressly assume and agree to perform this
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Agreement in the same manner and to the same extent that the Association would
be required to perform it if no such succession or assignment had taken place.
Failure of the Association to obtain such an assumption agreement prior to the
effectiveness of any such succession or assignment shall be a breach of this
Agreement and shall entitle the Employee to compensation from the Association in
the same amount and on the same terms as the compensation pursuant to Section
8(a) hereof. For purposes of implementing the provisions of this Section 10(a),
the date on which any such succession becomes effective shall be deemed the Date
of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued t live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
11. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the 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 (i) to the
Association at its home office to the attention of the Board of Directors of the
Association, with a copy to the Secretary of the Association, and (ii) to the
Employee at the home address he has most recently provided to the Association,
or to such other address as either party may have furnished to the other in
writing in accordance herewith.
12. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
13. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
14. 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.
15. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Kansas.
16. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF INDEPENDENCE
By:_________________________________
Xxxxxx X. Xxxxxx
Chairman of the Board
EMPLOYEE
By:_________________________________
Xxxxxxxx X. Xxxxxx
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