Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made and entered
into as of this 8th day of September, 1997, to be effective as of
September 8, 1997 ("Effective Date"), by and between LOCAL FINANCIAL
CORPORATION, a Delaware corporation ("LFC"), its wholly-owned subsidiary, LOCAL
FEDERAL BANK, F.S.B., a federal stock savings bank ("Bank"), both with address
of 0000 X. X. 00xx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, and XXXXXX X.
XXXXXXXX, an individual resident of the State of Oklahoma, with mailing address
of 00000 Xxxxx 000, Xxxxx, Xxxxxxxx 00000 ("Xxxxxxxx").
R E C I T A L S:
A. LFC is a one-bank holding company which owns all of the
issued and outstanding stock of Bank. Bank is engaged in the banking business in
the State of Oklahoma, with principal offices in Oklahoma City, Oklahoma, and
branch locations at various sites in the State of Oklahoma. Bank owns all of the
issued and outstanding stock of LOCAL AMERICA BANK, F.S.B., a federal stock
savings bank ("Local America") with principal offices in Tulsa, Oklahoma, and
branch locations at various sites in the State of Oklahoma. LFC and Bank are
desirous of employing Xxxxxxxx to serve as the Chairman of the Board of
Directors and Chief Executive Officer of LFC and Bank, respectively, for the
term and subject to the other terms and conditions set forth and described below
in this Employment Agreement;
X. Xxxxxxxx is a highly experienced chief executive officer of
banks, and in particular, federal stock savings banks. Xxxxxxxx is desirous of
entering into an agreement with LFC and Bank whereby Xxxxxxxx will be employed
by LFC and Bank to be the Chairman of the Board of Directors and Chief Executive
Officer of LFC and Bank, respectively, upon the terms and conditions provided in
this Employment Agreement; and
X. Xxxxxxxx is willing to enter into this Employment Agreement
with LFC and Bank to serve as the Chairman of the Board of Directors and Chief
Executive Officer of LFC and Bank, respectively, in consideration of the
payments to be made to him by Bank, and certain other additional and valuable
benefits and inducements to be granted to him by LFC and Bank, as hereinafter
set forth and in accordance with the conditions hereinafter provided;
D. The respective Boards of Directors of the Bank and of LFC
have each specifically approved and authorized the terms and conditions of this
Agreement and the entry into this Agreement with Xxxxxxxx so as to obtain his
employment by LFC and the Bank and his management and control thereof; and
E. Accordingly, LFC, the Bank and Xxxxxxxx desire to enter
into this Agreement to set forth the terms and conditions of the employment
relationships between LFC, the Bank and Xxxxxxxx.
NOW, THEREFORE, in consideration of the aforementioned
recitals, the premises, the mutual covenants set forth herein and of such other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by LFC, the Bank and Xxxxxxxx, respectively, they each do hereby
covenant and agree as follows:
1. Employment. Xxxxxxxx is hereby employed as the Chairman of
the Board of Directors and Chief Executive Officer of LFC and of the Bank,
respectively, to manage and direct the conduct of their banking businesses.
Xxxxxxxx shall devote all of his business time exclusively to LFC's and the
Bank's business and shall render services to LFC and to the Bank, respectively,
as their Chairman of the Board and Chief Executive Officer to the best of his
ability for and on behalf of LFC and the Bank, respectively. Xxxxxxxx shall
comply with all laws, statutes, ordinances, rules and regulations relating to
the performance of services for LFC and for the Bank under this Agreement.
During the term of this Agreement, Xxxxxxxx shall serve as the Chairman of the
Board of Directors and as the Chief Executive Officer of LFC and of the Bank,
and in those respective capacities shall, subject to the control of the Board of
Directors of LFC and of the Bank, respectively, generally supervise, plan and
direct the business and affairs of LFC and of the Bank and shall preside at all
meetings of the shareholders of LFC and of the Board of Directors of LFC and of
the Bank, respectively. As Chairman of the Board of Directors and Chief
Executive Officer of LFC and of the Bank, Xxxxxxxx shall exercise and perform
such other powers and duties as are usually vested in a chairman of the board of
directors and chief executive officer of a bank holding company and/or federal
savings bank, or as may be from time to time prescribed or assigned to him by
the Board of Directors of LFC, or by the Board of Directors of the Bank, or as
may be otherwise prescribed or assigned to him by the By-Laws of LFC or of the
Bank. During the term of this Agreement, Xxxxxxxx shall not, at any time or
place, directly or indirectly, engage in the same business in which LFC or the
Bank is engaged for any other person or entity to any extent whatsoever, other
than to the extent required by the terms and conditions of this Agreement, or as
a private investor for his own account, in a publicly held corporation engaged
in the banking business, unless his holdings shall not exceed five percent (5%)
of the issued and outstanding stock of such publicly held corporation and, so
long as such investment activities do not interfere with the performance of
Xxxxxxxx'x duties for LFC and for the Bank during the term of this Agreement.
The designation by LFC's or the Bank's Board of Directors of any other duties or
any other titles for Xxxxxxxx during the term of this Agreement shall not affect
Xxxxxxxx'x compensation as provided for in this Agreement.
2. Term of Employment. Subject to the provisions on
termination of employment contained in Section 9 herein, the term of the
employment provided for herein of Xxxxxxxx by LFC and by the Bank shall be for a
period of three (3) years, beginning on the Effective Date of this Agreement and
ending on the date which is the last day prior to the third (3rd) anniversary of
the Effective Date, unless extended as provided in this Section 2, below.
Subject to the provisions on termination of employment as provided for in
Section 9, below, prior to the first anniversary of the Effective Date of this
Agreement and prior to each anniversary of that date thereafter, the Board of
Directors of LFC and the Board of Directors of the Bank, respectively, shall
consider, review (with appropriate corporate documentation thereof, and after
taking into account all relevant factors, including Xxxxxxxx'x performance) and,
if appropriate, explicitly approve a one (1) year extension of the remaining
term of this Agreement. The term of this Agreement shall continue to so extend
each year if the Boards of Directors so approve such extension, respectively,
unless Xxxxxxxx gives written notice to LFC or the Bank, respectively, of
Xxxxxxxx'x election not to extend the term, with such notice not to be less than
sixty (60) days prior to any such anniversary date. If the Board of Directors of
LFC, or the Board of Directors of Bank, respectively, elect not to extend the
term, that Board of Directors shall give written notice to Xxxxxxxx of such
decision not less than sixty (60) days prior to any such anniversary date. If
either party hereto gives such timely notice to the other party that the
term of this Agreement will not be extended as of any such anniversary date,
then, and in such event, this Agreement shall terminate at the conclusion of its
then remaining term. References in this Agreement to the term of this Agreement
shall be deemed to refer both to the initial term and all successive terms
hereunder.
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3. Compensation.
(a) The Bank agrees to pay Xxxxxxxx as a guaranteed
salary throughout the term of this Agreement, unless Xxxxxxxx
voluntarily resigns from his employment by LFC and by Bank during the
term of this Agreement, for whatever reason, or unless this Agreement
is terminated for cause by LFC or the Bank, as set forth and described
in Section 9, below in this Agreement, an annual base salary for the
services rendered to LFC and Bank by Xxxxxxxx, as described above, in
the amount of Three Hundred Twenty Thousand and No/100 Dollars
($320,000.00) per year. This salary shall be payable to Xxxxxxxx in
twelve (12) equal, monthly installments of Twenty-Six Thousand Six
Hundred Sixty-Six and 67/100 Dollars ($26,666.67) per month for each
month during which services are rendered by Xxxxxxxx to LFC or the Bank
during the term of this Agreement. LFC and Bank covenant and agree that
the amount of salary to be paid to Xxxxxxxx during the term of this
Agreement cannot be decreased by LFC or Bank during the term of this
Agreement for any reason and must be paid to Xxxxxxxx in all events
each month during the term of this Agreement unless Xxxxxxxx
voluntarily resigns from his employment by Bank during the term of this
Agreement, for whatever reason, or unless Xxxxxxxx is terminated for
cause by the Bank for the specific reasons set forth and described
below in Section 9 of this Agreement. Accordingly, Bank agrees that if
Xxxxxxxx is terminated without cause, as provided below in Section 9 of
this Agreement, he shall still be entitled to receive as liquidated
damages for the termination without cause of his employment by LFC or
the Bank under this Agreement, the full amount of his remaining
guaranteed salary under this Agreement to be paid to him in the amount
of Twenty-Six Thousand Six Hundred Sixty-Six and 67/100 Dollars
($26,666.67) per month in the same manner as if he had remained
employed by the Bank during the entire term of this Agreement. Xxxxxxxx
and the Bank hereby expressly covenant and agree, anything in this
Agreement to the contrary notwithstanding, including, without
limitation, the provisions of Sections 3 through 6 and Section 9 of
this Agreement, that any payments made to Xxxxxxxx by Bank pursuant to
this Agreement, or otherwise, are in all respects expressly subject to
and conditioned upon their compliance with the provisions of 12 U.S.C.
ss.1828(k) and any regulations promulgated thereunder.
(b) Bank shall pay Xxxxxxxx his annual base salary on
a monthly basis on the first day of each month, subject to normal
salary deductions for the amount so owing, including, but not limited
to, Social Security, Medicare, federal and state income withholding
taxes. Xxxxxxxx'x base annual salary may be increased in the future,
from time to time, by the actions of LFC's or Bank's Board of
Directors, based upon Xxxxxxxx'x performance and other relevant factors
and LFC's or Bank's Board of Directors will review Xxxxxxxx'x salary
for the purposes of determining any appropriate increase in the base
annual salary of Xxxxxxxx at least annually. In addition, LFC or Bank
may, from time to time, enter into supplemental agreements or memoranda
in writing with Xxxxxxxx for the award and payment to him of additional
compensation or
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bonuses upon such terms and conditions as LFC or Bank shall deem to be
in their respective best interests, and in the event of the execution
by LFC or Bank of any such agreement or memoranda, the right of
Xxxxxxxx to additional compensation or bonuses shall be determined in
accordance with the applicable provisions thereof. In the absence of
any such supplemental agreements or memoranda, neither LFC or Bank
shall be obligated to pay to Xxxxxxxx any additional compensation or
bonus whatsoever, irrespective of the payments of additional
compensation or bonus to Xxxxxxxx in any past or succeeding year, or
the payment of additional compensation or bonus to other employees of
LFC or Bank at the end of the year, but may do so in the sole
discretion of LFC's or Bank's Board of Directors, respectively, and the
determination of LFC's or the Bank's Board of Directors, respectively,
in the exercise of such discretion, with respect to the payment and
amount of any additional compensation or bonus to Xxxxxxxx for any
fiscal year of LFC or Bank if made, shall be final and conclusive.
4. Granting of Incentive Stock Options. As an additional
inducement to Xxxxxxxx to enter into this Agreement with LFC and Bank and to
render his services to LFC and Bank upon a long-term basis and as additional
compensation to him for services to be rendered under the provisions of this
Agreement, LFC, has agreed to grant to Xxxxxxxx certain stock options to acquire
LFC's Common Stock, contingent upon the closing of a private placement of LFC's
Common Stock under a Private Placement Memorandum on or before September 1, 1997
(the "Offering"). The stock options have been granted by LFC to Xxxxxxxx
pursuant to that certain Local Financial Corporation Stock Option Plan ("Plan")
to be enacted by LFC contingent upon the closing of the Offering. In order to
evidence these stock options, LFC has also prepared and will execute and enter
into with Xxxxxxxx, contemporaneously with this Agreement, contingent upon the
closing of the Offering, that certain Local Financial Corporation Stock Option
Agreement ("Stock Option Agreement"), which will set forth the terms and
conditions of the stock options to be granted to Xxxxxxxx by LFC in accordance
herewith and the manner and method of exercising such options and acquiring such
stock by Xxxxxxxx. Attached as Exhibit "A" to this Agreement, and by this
reference made a part hereof, is an executed copy of the Stock Option Agreement,
entered into by and between LFC and Xxxxxxxx this same date in fulfillment of
the contractual obligations of LFC under the provisions of this Section 4 of the
Agreement.
5. Xxxxxxxx'x Additional Employment Benefits. In addition to
the annual base salary and the discretionary bonuses, provided for in Section 3
above, LFC and Bank agree to provide to Xxxxxxxx, or to reimburse Xxxxxxxx for,
the following additional employment benefits and expenses:
(a) During the term of this Agreement, Bank shall
furnish and provide to Xxxxxxxx, at its sole cost and expense, the
following described employee benefits, upon the same basis that Bank
accords these same benefits to its other executive employees. In the
event Bank does not provide any of the following benefits to its
executive level employees, it shall not be required to initiate a
program solely to provide such benefits to Xxxxxxxx. However, if Bank
should at any time in the future provide such benefits to its
employees, any such benefits shall also be provided to Xxxxxxxx upon
the same basis that it is provided to such other employees of Bank,
whether or not such benefit is listed below:
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(i) hospitalization, dental, accident and
major medical insurance benefits to Xxxxxxxx and all members
of Xxxxxxxx'x immediate family. The opportunity to participate
in any group life insurance program on a basis comparable to
the participation provided under any plans of such kind to
other executive officers of Bank. In any case, Bank will be
expected to make contributions towards the cost of such plans
for Xxxxxxxx at the same rate and in the same manner as it
makes for its other employees of like status who participate
therein.
(ii) The right and opportunity to
participate in and become vested under and pursuant to the
Defined Benefit Pension Plan maintained by Bank, or any other
qualified pension and profit sharing plans hereafter
maintained by Bank, upon the same basis accorded to other
full-time employees of Bank. In addition, Bank shall provide
to Xxxxxxxx such other fringe benefits as may be provided by
Bank to its executives, or its other employees, in accordance
with the policies heretofore or hereafter adopted by Bank.
(b) In addition to the above and foregoing fringe
benefits of employment which the Bank customarily provides to
all of its executive employees, Xxxxxxxx shall be entitled to
receive the following specific additional benefits in
consideration and as additional compensation to him for
entering into this Agreement and agreeing to provide the
services required herein to LFC and to the Bank:
(i) Payment of his dues for an individual
membership in his name in a golf and country club of his
choosing located in Oklahoma County, Oklahoma; provided,
however, the Bank's obligation shall be for dues and any
member assessments only, and it shall have no obligation to
pay any charges or expenses incurred by Xxxxxxxx as a member
of the aforesaid country club;
(ii) Throughout the term of this Agreement,
Xxxxxxxx shall be provided an automobile of a type and kind
comparable to that which Bank provides to its other executive
officers for use in their employment by the Bank;
(iii) A one-time payment of a moving/housing
allowance in the sum of One Hundred Thousand and No/100
Dollars ($100,000.00) to be used by Xxxxxxxx to relocate his
family from the Grove, Oklahoma area to the Oklahoma City
metropolitan area. In this regard, Xxxxxxxx agrees that he
will cause his family to be relocated to the Oklahoma City
metropolitan area from the Grove, Oklahoma area as soon as
feasible based upon the marketing of his present home, the
school calendar and the location of a suitable home in the
Oklahoma City area.
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(c) In addition to the compensations set forth above,
Xxxxxxxx shall also be entitled to reimbursement by Bank for his actual
out-of-pocket expenses incurred in the conduct of Bank's business,
which shall be limited to ordinary and necessary items and such other
valid expenditures as may be determined to be appropriate expenditures
on behalf of Bank by its Board of Directors, from time to time. The
reimbursement of said expenses and the amounts and the extent to which
they shall be reimbursed shall be decided on a case-by-case basis by
the Board of Directors of Bank, as the case may be; provided, however,
the Board of Directors of Bank may, at any time, and from time to time,
establish a policy or policies for allowing certain amounts for
reimbursements of certain types of specified business expenses,
incurred by Xxxxxxxx. Xxxxxxxx shall, in every instance, wherever
practical, support any claims for reimbursement for expenses by
adequate proof of such expenditures in the form of cancelled checks,
vouchers, bills, or in any other forms satisfactory to the Board of
Directors of Bank.
(d) Xxxxxxxx shall be entitled to such period of
vacation with pay during any one (1) year of the term of this Agreement
as may be permitted by the Board of Directors of Bank on a case-by-case
basis, in its sole discretion, or pursuant to any policy established by
the Board of Directors of the Bank for the benefit of its executive
employees, from time to time. Xxxxxxxx agrees that he will take
vacation days only at such times that will not unduly interfere with or
hamper the operation of Bank's business. Xxxxxxxx shall not be entitled
to receive any additional compensation from the Bank on account of his
failure to take a paid vacation as authorized pursuant to this
Subsection. Xxxxxxxx shall also not be entitled to accumulate unused
paid vacation time from one calendar year to the next calendar year
during the term of this Agreement.
6. Disability.
(a) For purposes of this Agreement, Xxxxxxxx shall be
deemed to be "disabled" or have a "disability" if Xxxxxxxx shall have
an illness, injury or other physical or mental condition which results
in Xxxxxxxx'x inability to perform substantially the duties he
performed in his employment capacity for LFC and Bank under this
Agreement to the extent he was performing such duties immediately prior
to the commencement of such condition.
(b) If Xxxxxxxx shall be disabled for not more than
ninety (90) days during any twelve (12) month period of the term of
this Agreement, then, Xxxxxxxx, during the continuance of such
disability, shall remain employed by Bank hereunder, shall continue to
receive his base salary and other compensation pursuant to this
Agreement and otherwise shall continue to have all of the rights and be
subject to all of Xxxxxxxx'x obligations and duties under this
Agreement, other than the obligation and duty to render services to
Bank otherwise in accordance with this Agreement during the period of
such disability.
(c) If Xxxxxxxx shall be disabled for more than
ninety (90) days during any twelve (12) month period during the term of
this Agreement, but not more than one hundred twenty (120) days during
any twelve (12) month period, then, from and after the expiration of
the ninetieth (90) day of disability and during the continuance of such
disability up to and including the day immediately preceding the one
hundred twentieth (120th) day, Xxxxxxxx shall be deemed to have taken a
leave of absence from the Bank commencing on the ninetieth (90th) day
of such disability and, during the continuance of such disability, the
following provisions shall apply:
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(i) Xxxxxxxx'x annual base salary shall be
apportioned up to and including the ninetieth (90th) day of
such disability and from and after the ninetieth (90th) day of
such disability and up to and including the day immediately
preceding the one hundred twentieth (120th) day of such
disability, neither LFC nor Bank shall pay any salary to
Xxxxxxxx and Xxxxxxxx shall receive no salary from LFC or
Bank.
(ii) Bank, in the sole discretion of its
Board of Directors, shall have the right and power to remove
Xxxxxxxx from the positions of Chairman of the Board of
Directors and Chief Executive Officer of the Bank, and LFC, in
turn, in the sole discretion of LFC's Board of Directors,
shall have the right and power to remove Xxxxxxxx from the
positions which he holds as LFC's Chairman of the Board of
Directors and Chief Executive Officer, or either of them may
delegate all or any portion of Xxxxxxxx'x duties as Chairman
of the Board of Directors and Chief Executive Officer of the
Bank or LFC, respectively, to one or more other employees of
the Bank or LFC, respectively.
(iii) Xxxxxxxx shall otherwise have all of
the rights and be subject to all of Xxxxxxxx'x obligations and
duties under this Agreement, except that Xxxxxxxx shall have
no obligation or duty to render services to LFC or the Bank,
respectively, otherwise in accordance with this Agreement
during such period of time; provided that Bank shall be
excused from providing any insurance coverage or benefits
which, by reason of Xxxxxxxx'x disability, Bank shall not be
able to obtain, continue or maintain at substantially the same
cost or expense or substantially the same terms and conditions
that Bank was able to obtain, continue or maintain immediately
prior to the commencement of Xxxxxxxx'x disability.
(d) If Xxxxxxxx shall be disabled for more than one
hundred twenty (120) days in any twelve (12) month period during the
term of this Agreement, the employment of Xxxxxxxx by LFC and Bank
hereunder shall cease and terminate pursuant to the provisions of
Section 9, below.
(e) If LFC and the Bank and Xxxxxxxx are unable to
agree whether Xxxxxxxx is disabled within the meaning of this Section
6, then this issue shall be submitted to arbitration in the manner
provided for in Section 13 of this Agreement below.
7. Standards. Xxxxxxxx shall perform all of his duties and
responsibilities under this Agreement in accordance with such reasonable
standards as are established from time to time by the Board of Directors of the
Bank or of LFC, respectively. The reasonableness of such standards shall be
measured against standards for executive performance generally prevailing in the
federal stock savings bank industry.
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8. Confidential Information.
(a) Xxxxxxxx acknowledges that in Xxxxxxxx'x
employment under this Agreement, Xxxxxxxx will be making use of,
acquiring and adding to the Bank's trade secrets and its confidential
and proprietary information of a special and unique nature and value
relating to such matters as, but not limited to, the Bank's depositor
list, loan customers, business operations, internal structure,
financial affairs, programs, software, systems, procedures, manuals,
confidential reports, lists of investors and prospective investors and
sales and marketing methods, as well as the amount, nature and type of
services and methods used and preferred by the Bank and its investors,
all of which shall be deemed to be Confidential Information for
purposes of this Agreement. Xxxxxxxx acknowledges that such
Confidential Information has been and will continue to be of central
importance to the business of the Bank and that disclosure of it to, or
its use by, others could cause substantial loss to the Bank.
Accordingly, during the term of this Agreement and upon and after
leaving the employ of Bank for any reason whatsoever, Xxxxxxxx shall
not, for any purpose whatsoever, directly or indirectly, divulge or
disclose to any person or entity any of such Confidential Information
which was obtained by Xxxxxxxx as a result of Xxxxxxxx'x employment
with Bank or any trade secrets of the Bank, but shall hold all of the
same confidential and inviolate.
(b) All contracts, agreements, financial books,
records, instruments and documents, a depositor list, borrower list,
investor list, memoranda, data, reports, programs, software, tapes,
rolodexes, telephone and address books, letters, research, cardex,
listings, programming and any other instruments, records or documents
relating or pertaining to the business of LFC or of the Bank
(collectively herein the "Records") shall at all times be and remain
the property of LFC and the Bank, respectively. Upon termination of
this Agreement and Xxxxxxxx'x employment under this Agreement for any
reason whatsoever, Xxxxxxxx shall return to LFC or the Bank,
respectively, all Records (whether furnished by LFC or the Bank or
prepared by Xxxxxxxx).
(c) All inventions and other creations, whether or
not patented, or copyrightable, and all ideas, reports and other
creative works, including, without limitation, computer programs,
manuals and related materials, made or conceived in whole or in part by
Xxxxxxxx while employed by LFC or the Bank which relate in any manner
whatsoever to the business, existing or proposed, of LFC or the Bank or
any other business or research or developmental efforts in which LFC or
the Bank, or any of its subsidiaries or affiliates engages in during
Xxxxxxxx'x employment by LFC and the Bank will be disclosed promptly by
Xxxxxxxx to LFC and the Bank and shall be the sole and exclusive
property of LFC or the Bank, as the case may be.
9. Termination of Employment.
(a) The Board of Directors of the Bank and/or the
Board of Directors of LFC, respectively, may terminate Xxxxxxxx'x
employment by the Bank and/or by LFC, respectively, under this
Agreement, with or without cause, at any time during the term hereof,
effective upon delivery of written notice to that effect to Xxxxxxxx,
but any such termination by the Bank or LFC, as the case may be, of
Xxxxxxxx other than termination of his employment for cause, as
described below in this Section, shall not prejudice Xxxxxxxx'x right
to receive the full amount of the remaining compensation which would
have otherwise been paid him throughout the term of this Agreement on
the same basis and at the same times and to receive all such other
fringe benefits to which he would have
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otherwise been entitled to receive during the term of this Agreement.
On the other hand, Xxxxxxxx shall not have any right to receive any
further compensation or any other benefits to which he would have
otherwise been entitled under this Agreement after his voluntary
resignation from his employment by the Bank or LFC, for whatever
reason, or after his termination from his employment for cause by the
Bank or LFC, in accordance with the terms of this Agreement, except for
the vested rights of Xxxxxxxx hereunder, i.e., any and all compensation
benefits and rights which Xxxxxxxx was entitled to receive prior to the
effective date of such termination. Termination for cause shall mean
termination because of Xxxxxxxx'x personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties under this Agreement,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or of a final cease-and-desist order,
or any material breach by Xxxxxxxx of any provision of this Agreement.
In determining the incompetence of Xxxxxxxx, the acts or omissions of
Xxxxxxxx shall be measured against standards generally prevailing in
the federal savings bank industry. Unless Xxxxxxxx voluntarily resigns
from his employment by the Bank during the term of this Agreement, for
whatever reason, or unless the termination by the Bank or LFC of
Xxxxxxxx'x employment under this Agreement is for just cause, as
previously stated, the Bank shall be obligated to continue to pay to
Xxxxxxxx his compensation and to provide to him all other benefits of
his employment as set forth in this Agreement during the remaining term
of this Agreement after the termination of his employment on the same
basis and at the same times as set forth and described above in this
Agreement. LFC, the Bank and Xxxxxxxx agree that it would be difficult
to ascertain the amount of damages owing to Xxxxxxxx if this Agreement
is terminated without cause during the term of this Agreement, and
accordingly, that the amount to be paid by Bank to Xxxxxxxx as
compensation and the other benefits to be provided by Bank to Xxxxxxxx
during the remaining term of this Agreement as if Xxxxxxxx had remained
employed by LFC or the Bank in such instance, shall be deemed to be
liquidated damages for the termination of this Agreement by Bank or LFC
without cause and not as a forfeiture or penalty. Xxxxxxxx agrees the
damages resulting from the termination of his employment by LFC or the
Bank without cause during the term of this Agreement would be difficult
and impractical to ascertain and that therefor the amount of liquidated
damages, as determined in the manner set forth above in this Section,
would be a fair and reasonable amount of damages under such
circumstances, and, accordingly, Xxxxxxxx agrees that his sole remedy,
in the event of the termination of his employment hereunder by the Bank
or LFC without cause, shall be strictly limited to his right to receive
such liquidated damages, and that he shall not have any right to seek
any other equitable or legal remedy or other damages in such event,
whether actual, special, consequential or punitive, by reason thereof.
(b) If Xxxxxxxx is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a
notice served under the provisions of Section 8(e)(3) or (g)(1) of the
Federal Deposit Insurance Act [12 U.S.C. ss.1818(e)(3) and (g)(1)], the
Bank's obligations under this Agreement shall be suspended as of the
date of service of said notice pursuant to the Act unless stayed by
appropriate proceedings. If the charges in the notice are dismissed,
the Bank may, in its discretion, (i) pay Xxxxxxxx all or part of the
compensation which was withheld by the Bank while its obligations under
this Agreement were suspended in accordance herewith, and (ii)
reinstate (in whole or in part) any of its obligations which were so
suspended.
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(c) If Xxxxxxxx is removed and/or permanently
prohibited from participating in the conduct of the Bank's affairs by
an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act [12 U.S.C. ss.1818(e)(4) or (g)(1)], all obligations of
the Bank under this Agreement shall terminate as of the effective date
of the order; provided, however, the vested rights of the Bank and
Xxxxxxxx under this Agreement shall not be affected thereby.
(d) If the Bank is in default (as defined in Section
3(x)(1) of the Federal Deposit Insurance Act), all obligations under
this Agreement shall terminate as of the date of such default, but this
Section 9(d) shall not affect any vested rights of the Bank or Xxxxxxxx
under this Agreement.
(e) All obligations under this Agreement shall be
terminated, except to the extent determined that the continuation of
this Agreement is necessary for the continued operations of the Bank:
(i) by the Director of the Federal
Deposit Insurance Corporation, or
his or her designee, at the time the
Federal Deposit Insurance
Corporation or the Resolution Trust
Corporation enters into an agreement
to provide assistance to or on
behalf of the Bank under the
authority contained in ss. 13(c) of
the Federal Deposit Insurance Act;
or
(ii) by the Director of the Federal
Deposit Insurance Corporation, or
his or her designee, at the time the
Director, or his or her designee
approves a supervisory merger to
resolve problems related to
operation of the Bank, or when the
Bank is determined by the Director
to be in an unsafe or unsound
condition.
Any rights of the Bank or Xxxxxxxx under the
Agreement that have already vested, however, shall not be affected by
such action.
(f) If Xxxxxxxx resigns voluntarily from his
employment by the Bank during the term of this Agreement, for whatever
reason, then, and in such event, all of the rights, benefits and
entitlements of Xxxxxxxx under this Agreement, including without
limitation, his right to receive salary payments, shall cease on the
date of such voluntary resignation, except for the rights of Xxxxxxxx
which have vested prior to the date of his voluntary resignation.
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10. No Assignment or Succession; Death of Xxxxxxxx. This
Agreement is personal to Xxxxxxxx and to the Bank and LFC. Neither Xxxxxxxx nor
the Bank or LFC may assign or delegate any of his or their respective rights or
obligations under this Agreement without first obtaining the prior written
consent of all of the other parties hereto. In the event of Xxxxxxxx'x death
during the term of this Agreement, all of the rights and entitlements of
Xxxxxxxx under this Agreement shall cease except for the rights of Xxxxxxxx
which have vested prior to the date of his death. Any and all remaining vested
compensation or benefits to which Xxxxxxxx is entitled under this Agreement
prior to the date of his death shall be payable by Bank to the estate of
Xxxxxxxx or to the person designated by Xxxxxxxx in his Last Will and Testament
to receive such payments or benefits. In the event the Bank is involuntarily
dissolved for any reason by the Office of Thrift Supervision ("OTS") or any
other governmental entity having authority over the Bank, this Agreement shall
terminate as of the date of such dissolution and Xxxxxxxx shall have no further
rights except for the rights which are vested in him prior to the effective date
of such dissolution.
11. Amendments or Additions: Action by Bank's Board of
Directors. No amendments or additions to this Agreement shall be binding unless
in writing and executed by both LFC and the Bank and by Xxxxxxxx. The prior
approval by the affirmative vote of the majority of the full Board of Directors
of the Bank or of LFC, respectively, shall be required in order for the Bank or
LFC, respectively, to authorize and execute any amendments or additions to this
Agreement, to give any consents or waivers of the provisions of this Agreement,
or to take any other action under this Agreement, including any termination of
the employment of Xxxxxxxx, with or without cause, under the provisions of
Section 9(a), above.
12. Reimbursement of Disallowed Expenses. If any expenses paid
by Bank for Xxxxxxxx or any reimbursement of expenses by Bank to Xxxxxxxx shall,
upon audit or other examination of the income tax returns of Bank, be determined
not to be allowable deductions from the gross income of Bank and such
determination shall be acceded to by Bank, or such determination shall be made
final by the appropriate taxing authority or a final judgment of a court of
competent jurisdiction, and no appeal shall be taken therefrom, or the
applicable period for the filing of a notice of appeal shall have expired, then,
and in such event, Xxxxxxxx shall rebate to Bank the dollar amount of the
expenses so disallowed by such taxing authority. Such repayment may not be
waived by the Bank.
13. Binding Arbitration. Unless LFC, Bank and Xxxxxxxx all
expressly agree otherwise in writing, all disputes relating to this Agreement,
or any breach thereof or the meaning and effect of any term and provisions
hereof, shall be submitted to binding arbitration by Bank, LFC and Xxxxxxxx
pursuant to the provisions of the Oklahoma Uniform Arbitration Act, 15 O.S.
ss.801, et seq. (the "Act"), and in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). In the event a
dispute arises which cannot be informally resolved by the parties hereto, a
panel of three (3) arbitrators shall be selected to settle the dispute. Within
twenty (20) days following the demand by either party for arbitration of a
dispute arising under this Agreement, LFC and Bank shall jointly appoint an
arbitrator knowledgeable and experienced in federal savings banks and Xxxxxxxx
shall appoint an arbitrator knowledgeable and experienced in federal savings
banks. The two (2) arbitrators so appointed shall together appoint a third
arbitrator, also knowledgeable and experienced in federal savings banks, within
twenty (20) days following the appointment of the last arbitrator selected by
LFC
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and the Bank and by Xxxxxxxx. In the event that the two (2) arbitrators selected
by LFC and the Bank and by Xxxxxxxx are unable to mutually select a third
arbitrator within the twenty (20) day period, the third arbitrator shall be
selected by the then presiding judge of the Oklahoma County, Oklahoma District
Court. If the presiding judge of the Oklahoma County, Oklahoma District Court is
unable or unwilling to make such selection, the parties will request that the
Chief United States District Judge of the United States District Court for the
Western District of Oklahoma make such selection. The panel of three (3)
arbitrators shall then determine a time and a place for the hearing and shall
notify the parties in writing personally or by registered mail no less than
twenty (20) days before the hearing. The arbitrators will hear the dispute in
accordance with the Act and the Rules. Each party hereto shall be entitled to be
represented by counsel and each party shall be solely responsible for the fees
of their respective counsel. A majority of arbitrators shall render a final
award within twenty (20) days following the conclusion of the hearing which
shall be final and binding upon all parties hereto. The expenses and fees of the
third arbitrator mutually selected by the first two (2) arbitrators shall be
divided equally between the parties. Each party shall be solely responsible for
the expenses and fees of the arbitrator whom it selected. The arbitrators may
include, as part of any award, for the recovery of attorney's fees by the
prevailing party. All other expenses incurred in the conduct of the arbitration
shall be divided equally between the parties. Judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
14. Miscellaneous Provisions.
(a) This Agreement shall be binding upon, and shall
inure to the benefit of LFC, Bank and Xxxxxxxx and their respective
heirs, personal and legal representatives, successors and assigns.
(b) LFC, Bank and Xxxxxxxx agree that the
construction and interpretation of this Agreement shall at all times
and in all respects be governed by the laws of the United States of
America where applicable and otherwise in all respects by the laws of
the State of Oklahoma.
(c) All notices required or permitted herein must be
in writing and shall be deemed to have been duly given on the date of
service and served personally or by telecopier, telex, or other similar
communication to the party or parties to whom notice is to be given, on
the next day if notice is effected by overnight mail service, or on the
third business day after mailing in the United States mail, if mailed,
to the party or parties to whom notice is to be given by registered or
certified mail, return receipt requested, postage prepaid, to the
address of such party, as set forth in the first paragraph of this
Agreement, or to such other address as any party to this Agreement may
designate to the other from time-to-time for this purpose in a manner
complying with the provisions of this section. Any communication which
is mailed by overnight mail or sent by telecopier or telex shall be
confirmed immediately, but failure to so confirm shall not affect the
effectiveness of such notice from and after the day on which such
notice is actually received.
(d) Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate
the remaining provisions hereof and any prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
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(e) This Agreement contains the entire agreement and
understanding by and between LFC, the Bank and Xxxxxxxx with respect to
Xxxxxxxx'x employment by LFC and the Bank, as herein described, and
supersedes all prior agreements and understandings between the parties
to this Agreement, relating to the subject matter of this Agreement. No
change or modification of this Agreement shall be valid or binding
unless the same is in writing and signed by the party intending to be
so bound. No waiver of any provision of this Agreement shall be valid
unless the same is in writing and signed by the party against whom such
waiver is sought to be enforced. Moreover, no valid waiver of any
provision of this Agreement, at any time, shall be deemed to be a
waiver of any other provision of this Agreement at such time, or will
be deemed a valid waiver of such provision at any other time.
(f) This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
(g) Time shall be of the essence with regard to the
performance by the parties hereto of their respective obligations
hereunder.
IN WITNESS WHEREOF, LFC, the Bank and Xxxxxxxx have duly
executed this Agreement as of the day and year first above written to be
effective as of the date stated in the first paragraph above.
LFC: LOCAL FINANCIAL CORPORATION,
a Delaware corporation
By: /s/ Xxx X. Xxxxxx
----------------------------------------
Name: Xxx X. Xxxxxx
Title: President
Date: 9/8/97
BANK: LOCAL FEDERAL BANK, F.S.B.,
a federal stock savings bank
By: /s/ Xxx X. Xxxxxx
----------------------------------------
Name: Xxx X. Xxxxxx
Title: President
Date: 9/8/97
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XXXXXXXX: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxx
Date: 9/8/97
14
