Exhibit 10.3(a)
NEWPORT FEDERAL SAVINGS & LOAN ASSOCIATION
__________________________
Employment Agreement with
Xxxxxxx Xxxxxxx
__________________________
AGREEMENT entered into and effective this day of
, 1997, by and between Newport Federal Savings & Loan Association (the
"Association") and Xxxxxxx Xxxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by the Association as
its President and is experienced in all phases of the business of the
Association; and
WHEREAS, the Board of Directors (the "Board") of the Association 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 parties desire by this writing to set forth the continuing
employment relationship of the Association and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Defined Terms
When used anywhere in this Agreement, the following terms shall have the
meaning set forth herein.
(a) "Change in Control" shall mean any one of the following events:
(i) the acquisition of ownership, holding or power to vote more than 25% of the
voting stock of the Association or the Company, (ii) the acquisition of the
ability to control the election of a majority of the Association's or the
Company's directors, (iii) the acquisition of a controlling influence over the
management or policies of the Association or of the Company by any person or by
persons acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (iv) during any period of two consecutive
years, individuals (the "Continuing Directors") who at the beginning of such
period constitute the Board of Directors of the Association or of the Company
(the "Existing Board") cease for any reason to constitute at least two-thirds
thereof, provided that any individual whose election or nomination for election
as a member of the Existing Board was approved by a vote of at least two-thirds
of the Continuing Directors then in office shall be considered a Continuing
Director. Notwithstanding the foregoing, the Company's ownership of the
Association shall not of itself constitute a Change in Control for purposes of
the Agreement.
For purposes of this paragraph only, the term "person" refers to an individual
or a corporation, partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity not specifically listed herein.
(b) "Company" shall mean United Tennessee Bankshares, Inc.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and regulations
in effect from time to time.
(d) "Code Section 280G Maximum" shall mean the product of 2.99 and
the Employee's "base amount" as defined in Code Section 280G(b)(3).
(e) "Disability" shall mean a physical or mental infirmity which
impairs the Employee's ability to substantially perform his duties under this
Agreement and which results in the Employee becoming eligible for long-term
disability benefits under the Association's long-term disability plan (or, if
the Association has no such plan in effect, which impairs the Employee's ability
to substantially perform his duties under this Agreement for a period of 180
consecutive days).
(f) "Effective Date" shall mean the date referenced in the opening
paragraph of this Agreement.
(g) "Good Reason" shall mean any of the following events, which has
not been consented to in advance by the Employee in writing: (i) the requirement
that the Employee move his personal residence, or perform his principal
executive functions, more than thirty (30) miles from his primary office as of
the later of the Effective Date and the most recent voluntary relocation by the
Employee; (ii) a material reduction in the Employee's base compensation under
this Agreement as the same may be increased from time to time; (iii) the failure
by the Association or the Company to continue to provide the Employee with
compensation and benefits provided under this Agreement as the same may be
increased from time to time, or with benefits substantially similar to those
provided to him under any of the employee benefit plans in which the Employee
now or hereafter becomes a participant, or the taking of any action by the
Association or the Company which, directly or indirectly, would materially
reduce any of such benefits or deprive the Employee of any material fringe
benefit enjoyed by him under this Agreement; (iv) the assignment to the Employee
of duties and responsibilities materially different from those normally
associated with his position; or (v) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting responsibilities)
in connection with his employment with the Association.
(h) "Just Cause" shall mean, in the good faith determination of the
Association's Board of Directors, the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement.
The Employee shall have no right to receive compensation or other benefits for
any period after termination for Just Cause. No act, or failure to act, on the
Employee's part shall be considered "willful" unless he has acted, or failed to
act, with an absence of good faith and without a reasonable belief that his
action or failure to act was in the best interest of the Association and the
Company.
(i) "Protected Period" shall mean the twelve-month period following a
Change in Control.
2. Employment. The Employee is employed as the President of the
Association. The Employee shall render such administrative and management
services for the Association as are currently rendered and as are customarily
performed by persons situated in a similar executive capacity. The Employee
shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Association. The Employee's other duties
shall be such as the Board may from time to time reasonably direct, including
normal duties as an officer of the Association.
3. Base Compensation. The Association agrees to pay the Employee
during the term of this Agreement a salary at the rate of $69,131 per annum,
payable in cash not less frequently than monthly. The Board shall review,
not less often than annually, the rate of the Employee's salary, and in its
sole discretion may decide to increase his salary.
4. Discretionary Bonuses. The Employee shall participate in an equitable
manner with all other senior management employees of the Association in
discretionary bonuses that the Board may award from time to time to the
Association's senior management employees. No other compensation provided for
in this Agreement shall be deemed a substitute for the Employee's right to
participate in such discretionary bonuses.
5. Participation in Retirement, Medical and Other Plans.
(a) The Employee shall be eligible to participate in any of the
following plans or programs that the Association may now or in the future
maintain: group hospitalization, disability, health, dental, sick leave, life
insurance, travel and/or accident insurance, auto allowance/auto lease,
retirement, pension, and/or other present or future qualified or nonqualified
plans provided by the Association, generally which benefits, taken as a whole,
must be at least as favorable as those in effect on the Effective Date.
(b) The Employee shall also be eligible to participate in any fringe
benefits which are or may become available to the Association's senior
management employees, including for example: any stock option or incentive
compensation plans, and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this
Agreement. The Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which he shall incur in connection with his services under
this Agreement upon substantiation of such expenses in accordance with the
policies of the Association.
6. Term. The Association hereby employs the Employee, and the Employee
hereby accepts such employment under this Agreement, for the period commencing
on the Effective Date and ending 36 months thereafter (or such earlier date as
is determined in accordance with Section 10 or 12 hereof). Additionally, on
each annual anniversary date from the Effective Date, the Employee's term of
employment shall be extended for an additional one-year period beyond the then
effective expiration date, provided the Board determines in a duly adopted
resolution that the performance of the Employee has met the Board's requirements
and standards, and that this Agreement shall be extended. Only those members of
the Board of Directors who have no personal interest in this Employment
Agreement shall discuss and vote on the approval and subsequent review of this
Agreement.
7. Loyalty; Noncompetition.
(a) During the period of his employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all his full business time, attention, skill, and efforts
to the faithful performance of his duties hereunder; provided, however, from
time to time, Employee may serve on the boards of directors of, and hold any
other offices or positions in, companies or organizations, which will not
present any conflict of interest with the Association or any of its subsidiaries
or affiliates, or unfavorably affect the performance of Employee's duties
pursuant to this Agreement, or will not violate any applicable statute or
regulation. "Full business time" is hereby defined as that amount of time
usually devoted to like companies by similarly situated executive officers.
During the term of his employment under this Agreement, the Employee shall not
engage in any business or activity contrary to the business affairs or interests
of the Association.
(b) Nothing contained in this Section shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business dissimilar from that of the Association, or, solely as a passive or
minority investor, in any business.
8. Standards. The Employee shall perform his duties under this Agreement
in accordance with such reasonable standards as the Board may establish from
time to time. The Association will provide Employee with the working facilities
and staff customary for similar executives and necessary for him to perform his
duties.
9. Vacation and Sick Leave. At such reasonable times as the Board shall
in its discretion permit, 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 in
accordance with the policies that the Board periodically establishes for senior
management employees of the Association.
(b) The Employee shall not receive any additional compensation from
the Association on account of his failure to take a vacation or sick leave, and
the Employee shall not
accumulate unused vacation or sick leave from one fiscal year to the next,
except in either case to the extent authorized by the Board.
(c) In addition to the aforesaid paid vacations, the Employee shall
be entitled without loss of pay, to absent himself voluntarily from the
performance of his employment with the Association for such additional periods
of time and for such valid and legitimate reasons as the Board may in its
discretion determine. Further, the Board may 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 such Board in its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick
leave benefit as established by the Board.
10. Termination and Termination Pay. Subject to Section 12 hereof, the
Employee's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Employee's employment under this Agreement shall
terminate upon his death during the term of this Agreement, in which event the
Employee's estate shall be entitled to receive the compensation due the Employee
through the last day of the calendar month in which his death occurred.
(b) Disability. (1) The Association may terminate the Employee's
employment after having established the Employee's Disability, in which event
the Employee shall be entitled to the compensation and benefits provided for
under this Agreement for (i) any period during the term of this Agreement and
prior to the establishment of the Employee's Disability during which the
Employee is unable to work due to the physical or mental infirmity, and (ii) any
period of Disability which is prior to the Employee's termination of employment
pursuant to this Section 10(b); provided that any benefits paid pursuant to the
Association's long term disability plan will continue as provided in such plan
without reduction for payments made pursuant to this Agreement.
(2) During any period that the Employee shall receive
disability benefits and to the extent that the Employee shall be physically and
mentally able to do so, he shall furnish such information, assistance and
documents so as to assist in the continued ongoing business of the Association
and, if able, shall make himself available to the Association to undertake
reasonable assignments consistent with his prior position and his physical and
mental health. The Association shall pay all reasonable expenses incident to
the performance of any assignment given to the Employee during the disability
period.
(c) Just Cause. The Board may, by written notice to the Employee,
immediately terminate his employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause.
(d) Without Just Cause; Constructive Discharge. The Board may, by
written notice to the Employee, immediately terminate his employment at any time
for a reason other than
his Disability or Just Cause, in which event the Employee shall be entitled to
receive the following compensation and benefits (unless such termination occurs
during the Protected Period, in which event the benefits and compensation
provided for in Section 12 shall apply): (i) the salary provided pursuant to
Section 3 hereof, up to the expiration date of this Agreement, including any
renewal term (the "Expiration Date"), and (ii) at the Employee's election either
(A) cash in an amount equal to the cost to the Employee of obtaining all health,
life, disability and other benefits which the Employee would have been eligible
to participate in through the Expiration Date based upon the benefit levels
substantially equal to those that the Association provided for the Employee at
the date of termination of employment or (B) continued participation under such
Association benefit plans through the Expiration Date, but only to the extent
the Employee continues to qualify for participation therein. All amounts
payable to the Employee shall be paid, at the option of the Employee, either (I)
in periodic payments through the Expiration Date, or (II) in one lump sum within
ten days of such termination.
(e) Good Reason. The Employee shall be entitled to receive the
compensation and benefits payable under subsection 10(d) hereof in the event
that the Employee voluntarily terminates employment within 90 days of an event
that constitutes Good Reason (unless such voluntary termination occurs during
the Protected Period, in which event the benefits and compensation provided for
in Section 12 shall apply).
(f) Termination or Suspension Under Federal Law. (1) If the Employee
is removed and/or permanently prohibited from participating in the conduct of
the Association's affairs by an order issued under Sections 8(e)(4) or 8(g)(1)
of the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) and (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.
(2) If the Association is in default (as defined in Section
3(x)(1) of FDIA), all obligations under this Agreement shall terminate as of the
date of default; however, this Paragraph shall not affect the vested rights of
the parties.
(3) All obligations under this Agreement shall terminate, 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 ("Director of OTS"), or his or her designee, at the time that
the Federal Deposit Insurance Corporation ("FDIC") or the Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of
the Association under the authority contained in Section 13(c) of FDIA; or (ii)
by the Director of the OTS, or his or her designee, at the time that 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. Such action shall not affect any vested rights of the parties.
(4) If a notice served under Section 8(e)(3) or (g)(1) of the
FDIA (12 U.S.C. 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the
Employee from participating in the conduct of the Association's affairs, the
Association's obligations under this
Agreement shall be suspended as of the date of such 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 contract obligations were suspended, and (ii)
reinstate (in whole or in part) and of its obligations which were suspended. In
addition, in the event the termination provisions in this Section 10(f) conflict
with the provisions set forth in 12 C.F.R. Section 563.39(b), the latter shall
prevail.
(5) Any payments made to the Employee pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with both 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder,
and Regulatory Bulletin 27A, but only to the extent required thereunder on the
date any payment is required pursuant to this Agreement.
(g) Voluntary Termination by Employee. Subject to Section 12 hereof,
the Employee may voluntarily terminate employment with the Association during
the term of this Agreement, upon at least 90 days' prior written notice to the
Board of Directors, in which case the Employee shall receive only his
compensation, vested rights and employee benefits up to the date of his
termination (unless such termination occurs pursuant to Section 10(d) hereof or
within the Protected Period, in Section 12(a) hereof, in which event the
benefits and compensation provided for in Sections 10(d) or 12, as applicable,
shall apply).
(h) Post-termination Health Insurance. If the Employee's employment
terminates with the Association or the Company for any reason other than Just
Cause, the Employee shall be entitled to purchase from the Association, at the
Employee's own expense which shall not exceed applicable COBRA rates, family
medical insurance under any group health plan that the Association or the
Company maintains for its employees. This right shall be (i) in addition to,
and not in lieu of, any other rights that the Employee has under this Agreement,
and (ii) shall continue until the Employee first becomes eligible for
participation in Medicare.
11. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.
12. Change in Control.
(a) Trigger Events. The Employee shall be entitled to collect the
severance benefits set forth in subsection (b) hereof in the event that either
the Employee voluntarily terminates employment within 90 days of an event that
both occurs during the Protected Period and constitutes Good Reason, or the
Association or the Company or their successor(s) in interest terminate the
Employee's employment without written notice of termination and for any reason
other than Just Cause during the Protected Period.
(b) Amount of Severance Benefit. If the Employee becomes entitled to
collect severance benefits pursuant to Section 12(a) hereof, the Association
shall:
(i) pay the Employee a severance benefit equal to the difference
between the Code Section 280G Maximum and the sum of any other
"parachute payments" as defined under Code Section 280G(b)(2) that the
Employee receives on account of the Change in Control, and
(ii) pay for long-term disability and provide such medical
benefits as are available to the Employee under the provisions of
COBRA, for eighteen (18) months (or such longer period, up to 24
months, if COBRA is amended).
The amount payable under Section 12(b)(i) shall be paid in one lump sum
within ten days of the later of the date of the Change in Control and the
Employee's last day of employment with the Association or the Company. In the
event that the Employee, the Association, and the Company jointly agree that the
Employee has collected an amount exceeding the Code Section 280G Maximum, the
parties may agree in writing that such excess shall be treated as a loan ab
initio, which the Employee shall repay to the Association, on terms and
conditions mutually agreeable to the parties, together with interest at the
applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.
13. Indemnification. The Association and the Company agree that their
respective Bylaws shall continue to provide for indemnification of directors,
officers, employees and agents of the Association and the Company, including the
Employee during the full term of this Agreement, and to at all times provide
adequate insurance for such purposes.
14. Reimbursement of Employee for Enforcement Proceedings. In the event
that any dispute arises between the Employee and the Association as to the terms
or interpretation of this Agreement, whether instituted by formal legal
proceedings or otherwise, including any action that the Employee takes to defend
against any action taken by the Association or the Company, the Employee shall
be reimbursed for all costs and expenses, including reasonable attorneys' fees,
arising from such dispute, proceedings or actions, provided that the Employee
obtains either a written settlement or a final judgement by a court of competent
jurisdiction substantially in his favor. Such reimbursement shall be paid
within ten days of Employee's furnishing to the Association written evidence,
which may be in the form, among other things, of a canceled check or receipt, of
any costs or expenses incurred by the Employee.
15. Federal Income Tax Withholding. The Association may withhold all
federal and state income or other taxes from any benefit payable under this
Agreement as shall be required pursuant to any law or government regulation or
ruling.
16. Successors and Assigns.
(a) Association. This Agreement shall not be assignable by the
Association, provided that this Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Association which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Association.
(b) Employee. Since the Association is contracting for the unique
and personal skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties hereunder without first obtaining
the written consent of the Association; provided, however, that nothing in this
paragraph shall preclude (i) the Employee from designating a beneficiary to
receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of the Employee or his estate
from assigning any rights hereunder to the person or persons entitled thereunto.
(c) Attachment. 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 exclusion, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
17. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
18. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Tennessee shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
19. 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.
20. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto and shall supersede any prior
agreement between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
ATTEST: NEWPORT FEDERAL SAVINGS & LOAN
ASSOCIATION
____________________ By:____________________________
Secretary Its Chairman of the Board
WITNESS:
______________________ ____________________________
Xxxxxxx Xxxxxxx
NEWPORT FEDERAL SAVINGS & LOAN ASSOCIATION
__________________________
Employment Agreement with
Xxxxx Xxxxxx
__________________________
AGREEMENT entered into and effective this day of
, 1997, by and between Newport Federal Savings & Loan Association (the
"Association") and Xxxxx Xxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by the Association as
Vice President and Treasurer and is experienced in all phases of the business of
the Association; and
WHEREAS, the Board of Directors (the "Board") of the Association 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 her assigned duties; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Association and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Defined Terms
When used anywhere in this Agreement, the following terms shall have the
meaning set forth herein.
(a) "Change in Control" shall mean any one of the following events:
(i) the acquisition of ownership, holding or power to vote more than 25% of the
voting stock of the Association or the Company, (ii) the acquisition of the
ability to control the election of a majority of the Association's or the
Company's directors, (iii) the acquisition of a controlling influence over the
management or policies of the Association or of the Company by any person or by
persons acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (iv) during any period of two consecutive
years, individuals (the "Continuing Directors") who at the beginning of such
period constitute the Board of Directors of the Association or of the Company
(the "Existing Board") cease for any reason to constitute at least two-thirds
thereof, provided that any individual whose election or nomination for election
as a member of the Existing Board was approved by a vote of at least two-thirds
of the Continuing Directors then in office shall be considered a Continuing
Director. Notwithstanding the foregoing, the Company's ownership of the
Association shall not of itself constitute a Change in Control for purposes of
the Agreement. For purposes of this paragraph only, the term "person" refers to
an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein.
(b) "Company" shall mean United Tennessee Bankshares, Inc.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and regulations
in effect from time to time.
(d) "Code Section 280G Maximum" shall mean the product of 2.99 and
the Employee's "base amount" as defined in Code Section 280G(b)(3).
(e) "Disability" shall mean a physical or mental infirmity which
impairs the Employee's ability to substantially perform her duties under this
Agreement and which results in the Employee becoming eligible for long-term
disability benefits under the Association's long-term disability plan (or, if
the Association has no such plan in effect, which impairs the Employee's ability
to substantially perform her duties under this Agreement for a period of 180
consecutive days).
(f) "Effective Date" shall mean the date referenced in the opening
paragraph of this Agreement.
(g) "Good Reason" shall mean any of the following events, which has
not been consented to in advance by the Employee in writing: (i) the requirement
that the Employee move her personal residence, or perform her principal
executive functions, more than thirty (30) miles from her primary office as of
the later of the Effective Date and the most recent voluntary relocation by the
Employee; (ii) a material reduction in the Employee's base compensation under
this Agreement as the same may be increased from time to time; (iii) the failure
by the Association or the Company to continue to provide the Employee with
compensation and benefits provided under this Agreement as the same may be
increased from time to time, or with benefits substantially similar to those
provided to her under any of the employee benefit plans in which the Employee
now or hereafter becomes a participant, or the taking of any action by the
Association or the Company which, directly or indirectly, would materially
reduce any of such benefits or deprive the Employee of any material fringe
benefit enjoyed by her under this Agreement; (iv) the assignment to the Employee
of duties and responsibilities materially different from those normally
associated with her position; or (v) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting responsibilities)
in connection with her employment with the Association.
(h) "Just Cause" shall mean, in the good faith determination of the
Association's Board of Directors, the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. No act, or failure to
act, on the Employee's part shall be considered
"willful" unless she has acted, or failed to act, with an absence of good faith
and without a reasonable belief that her action or failure to act was in the
best interest of the Association and the Company.
(i) "Protected Period" shall mean the twelve-month period following a
Change in Control.
2. Employment. The Employee is employed as the Vice President and
Treasurer of the Association. The Employee shall render such administrative and
management services for the Association as are currently rendered and as are
customarily performed by persons situated in a similar executive capacity. The
Employee shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Association. The Employee's other duties
shall be such as the Board may from time to time reasonably direct, including
normal duties as an officer of the Association.
3. Base Compensation. The Association agrees to pay the Employee
during the term of this Agreement a salary at the rate of $37,178 per annum,
payable in cash not less frequently than monthly. The Board shall review,
not less often than annually, the rate of the Employee's salary, and in its
sole discretion may decide to increase her salary.
4. Discretionary Bonuses. The Employee shall participate in an equitable
manner with all other senior management employees of the Association in
discretionary bonuses that the Board may award from time to time to the
Association's senior management employees. No other compensation provided for
in this Agreement shall be deemed a substitute for the Employee's right to
participate in such discretionary bonuses.
5. Participation in Retirement, Medical and Other Plans.
(a) The Employee shall be eligible to participate in any of the
following plans or programs that the Association may now or in the future
maintain: group hospitalization, disability, health, dental, sick leave, life
insurance, travel and/or accident insurance, auto allowance/auto lease,
retirement, pension, and/or other present or future qualified or nonqualified
plans provided by the Association, generally which benefits, taken as a whole,
must be at least as favorable as those in effect on the Effective Date.
(b) The Employee shall also be eligible to participate in any fringe
benefits which are or may become available to the Association's senior
management employees, including for example: any stock option or incentive
compensation plans, and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this
Agreement. The Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which she shall incur in connection with her services under
this Agreement upon substantiation of such expenses in accordance with the
policies of the Association.
6. Term. The Association hereby employs the Employee, and the Employee
hereby accepts such employment under this Agreement, for the period commencing
on the Effective Date and ending eighteen (18) months thereafter (or such
earlier date as is determined in accordance
with Section 10 or 12 hereof). Additionally, on each annual anniversary date
from the Effective Date, the Employee's term of employment shall be extended for
an additional one-year period beyond the then effective expiration date,
provided the Board determines in a duly adopted resolution that the performance
of the Employee has met the Board's requirements and standards, and that this
Agreement shall be extended. Only those members of the Board of Directors who
have no personal interest in this Employment Agreement shall discuss and vote on
the approval and subsequent review of this Agreement.
7. Loyalty; Noncompetition.
(a) During the period of her employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all her full business time, attention, skill, and efforts
to the faithful performance of her duties hereunder; provided, however, from
time to time, Employee may serve on the boards of directors of, and hold any
other offices or positions in, companies or organizations, which will not
present any conflict of interest with the Association or any of its subsidiaries
or affiliates, or unfavorably affect the performance of Employee's duties
pursuant to this Agreement, or will not violate any applicable statute or
regulation. "Full business time" is hereby defined as that amount of time
usually devoted to like companies by similarly situated executive officers.
During the term of her employment under this Agreement, the Employee shall not
engage in any business or activity contrary to the business affairs or interests
of the Association.
(b) Nothing contained in this Section shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business dissimilar from that of the Association, or, solely as a passive or
minority investor, in any business.
8. Standards. The Employee shall perform her duties under this Agreement
in accordance with such reasonable standards as the Board may establish from
time to time. The Association will provide Employee with the working facilities
and staff customary for similar executives and necessary for her to perform her
duties.
9. Vacation and Sick Leave. At such reasonable times as the Board shall
in its discretion permit, the Employee shall be entitled, without loss of pay,
to absent himself voluntarily from the performance of her 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 in
accordance with the policies that the Board periodically establishes for senior
management employees of the Association.
(b) The Employee shall not receive any additional compensation from
the Association on account of her failure to take a vacation or sick leave, and
the Employee shall not accumulate unused vacation or sick leave from one fiscal
year to the next, except in either case to the extent authorized by the Board.
(c) In addition to the aforesaid paid vacations, the Employee shall
be entitled
without loss of pay, to absent himself voluntarily from the performance of her
employment with the Association for such additional periods of time and for such
valid and legitimate reasons as the Board may in its discretion determine.
Further, the Board may 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 such
Board in its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick
leave benefit as established by the Board.
10. Termination and Termination Pay. Subject to Section 12 hereof, the
Employee's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Employee's employment under this Agreement shall
terminate upon her death during the term of this Agreement, in which event the
Employee's estate shall be entitled to receive the compensation due the Employee
through the last day of the calendar month in which her death occurred.
(b) Disability. (1) The Association may terminate the Employee's
employment after having established the Employee's Disability, in which event
the Employee shall be entitled to the compensation and benefits provided for
under this Agreement for (i) any period during the term of this Agreement and
prior to the establishment of the Employee's Disability during which the
Employee is unable to work due to the physical or mental infirmity, and (ii) any
period of Disability which is prior to the Employee's termination of employment
pursuant to this Section 10(b); provided that any benefits paid pursuant to the
Association's long term disability plan will continue as provided in such plan
without reduction for payments made pursuant to this Agreement.
(2) During any period that the Employee shall receive disability
benefits and to the extent that the Employee shall be physically and mentally
able to do so, she shall furnish such information, assistance and documents so
as to assist in the continued ongoing business of the Association and, if able,
shall make himself available to the Association to undertake reasonable
assignments consistent with her prior position and her physical and mental
health. The Association shall pay all reasonable expenses incident to the
performance of any assignment given to the Employee during the disability
period.
(c) Just Cause. The Board may, by written notice to the Employee,
immediately terminate her employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause.
(d) Without Just Cause; Constructive Discharge. The Board may, by
written notice to the Employee, immediately terminate her employment at any time
for a reason other than her Disability or Just Cause, in which event the
Employee shall be entitled to receive the following compensation and benefits
(unless such termination occurs during the Protected Period, in which event the
benefits and compensation provided for in Section 12 shall apply): the salary
provided pursuant to Section 3 hereof, up to the expiration date of this
Agreement, including any renewal term (the "Expiration Date"). All amounts
payable to the Employee shall be paid, at the option
of the Employee, either (I) in periodic payments through the Expiration Date, or
(II) in one lump sum within ten days of such termination.
(e) Good Reason. The Employee shall be entitled to receive the
compensation and benefits payable under subsection 10(d) hereof in the event
that the Employee voluntarily terminates employment within 90 days of an event
that constitutes Good Reason (unless such voluntary termination occurs during
the Protected Period, in which event the benefits and compensation provided for
in Section 12 shall apply).
(f) Termination or Suspension Under Federal Law. (1) If the Employee
is removed and/or permanently prohibited from participating in the conduct of
the Association's affairs by an order issued under Sections 8(e)(4) or 8(g)(1)
of the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) and (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.
(2) If the Association is in default (as defined in Section
3(x)(1) of FDIA), all obligations under this Agreement shall terminate as of the
date of default; however, this Paragraph shall not affect the vested rights of
the parties.
(3) All obligations under this Agreement shall terminate,
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 ("Director of OTS"), or his or her designee, at the
time that the Federal Deposit Insurance Corporation ("FDIC") or the Resolution
Trust Corporation enters into an agreement to provide assistance to or on behalf
of the Association under the authority contained in Section 13(c) of FDIA; or
(ii) by the Director of the OTS, or his or her designee, at the time that 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. Such action shall not affect any vested rights of the parties.
(4) If a notice served under Section 8(e)(3) or (g)(1) of the
FDIA (12 U.S.C. 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the
Employee from participating in the conduct of the Association's affairs, the
Association's obligations under this Agreement shall be suspended as of the date
of such 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 contract obligations
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
(5) Any payments made to the Employee pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with both 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder,
and Regulatory Bulletin 27A, but only to the extent required thereunder on the
date any payment is required pursuant to this Agreement. In addition, in the
event the termination provisions in this Section 10(f) conflict with the
provisions set forth in 12 C.F.R. Section 563.39(b), the latter shall prevail.
(g) Voluntary Termination by Employee. Subject to Section 12 hereof,
the Employee may voluntarily terminate employment with the Association during
the term of this Agreement, upon at least 90 days' prior written notice to the
Board of Directors, in which case the Employee shall receive only her
compensation, vested rights and employee benefits up to the date of her
termination (unless such termination occurs pursuant to Section 10(d) hereof or
within the Protected Period, in Section 12(a) hereof, in which event the
benefits and compensation provided for in Sections 10(d) or 12, as applicable,
shall apply).
11. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.
12. Change in Control.
(a) Trigger Events. The Employee shall be entitled to collect the
severance benefits set forth in subsection (b) hereof in the event that either
the Employee voluntarily terminates employment within 90 days of an event that
both occurs during the Protected Period and constitutes Good Reason, or the
Association or the Company or their successor(s) in interest terminate the
Employee's employment without written notice of termination and for any reason
other than Just Cause during the Protected Period.
(b) Amount of Severance Benefit. If the Employee becomes entitled to
collect severance benefits pursuant to Section 12(a) hereof, the Association
shall:
(i) pay the Employee a severance benefit equal to 1.5 times her
base salary then in effect, but in no event greater than the
difference between the Code Section 280G Maximum and the sum of any
other "parachute payments" as defined under Code Section 280G(b)(2)
that the Employee receives on account of the Change in Control, and
(ii) pay for long-term disability and provide such medical
benefits as are available to the Employee under the provisions of
COBRA, for eighteen (18) months (or such longer period, up to 24
months, if COBRA is amended).
The amount payable under Section 12(b)(i) shall be paid in one lump sum
within ten days of the later of the date of the Change in Control and the
Employee's last day of employment with the Association or the Company. In the
event that the Employee, the Association, and the Company jointly agree that the
Employee has collected an amount exceeding the Code Section 280G Maximum, the
parties may agree in writing that such excess shall be treated as a loan ab
initio, which the Employee shall repay to the Association, on terms and
conditions mutually agreeable to the parties, together with interest at the
applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.
13. Indemnification. The Association and the Company agree that their
respective
Bylaws shall continue to provide for indemnification of directors, officers,
employees and agents of the Association and the Company, including the Employee
during the full term of this Agreement, and to at all times provide adequate
insurance for such purposes.
14. Reimbursement of Employee for Enforcement Proceedings. In the event
that any dispute arises between the Employee and the Association as to the terms
or interpretation of this Agreement, whether instituted by formal legal
proceedings or otherwise, including any action that the Employee takes to defend
against any action taken by the Association or the Company, the Employee shall
be reimbursed for all costs and expenses, including reasonable attorneys' fees,
arising from such dispute, proceedings or actions, provided that the Employee
obtains either a written settlement or a final judgement by a court of competent
jurisdiction substantially in her favor. Such reimbursement shall be paid
within ten days of Employee's furnishing to the Association written evidence,
which may be in the form, among other things, of a cancelled check or receipt,
of any costs or expenses incurred by the Employee.
15. Federal Income Tax Withholding. The Association may withhold all
federal and state income or other taxes from any benefit payable under this
Agreement as shall be required pursuant to any law or government regulation or
ruling.
16. Successors and Assigns.
(a) Association. This Agreement shall not be assignable by the
Association, provided that this Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Association which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Association.
(b) Employee. Since the Association is contracting for the unique
and personal skills of the Employee, the Employee shall be precluded from
assigning or delegating her rights or duties hereunder without first obtaining
the written consent of the Association; provided, however, that nothing in this
paragraph shall preclude (i) the Employee from designating a beneficiary to
receive any benefit payable hereunder upon her death, or (ii) the executors,
administrators, or other legal representatives of the Employee or her estate
from assigning any rights hereunder to the person or persons entitled thereunto.
(c) Attachment. 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 exclusion, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
17. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
18. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Tennessee shall govern this Agreement in all respects,
whether as to its validity, construction,
capacity, performance or otherwise.
19. 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.
20. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto and shall supersede any prior
agreement between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
ATTEST: NEWPORT FEDERAL SAVINGS & LOAN
ASSOCIATION
_________________ By:____________________________
Secretary Its Chairman of the Board
WITNESS:
_________________ ___________________________
Xxxxx Xxxxxx
NEWPORT FEDERAL SAVINGS & LOAN ASSOCIATION
__________________________
Employment Agreement with
Xxxxx Xxxxxxx
__________________________
AGREEMENT entered into and effective this day of
, 1997, by and between Newport Federal Savings & Loan Association (the
"Association") and Xxxxx Xxxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by the Association as
Branch Manager and Assistant Secretary and is experienced in all phases of the
business of the Association; and
WHEREAS, the Board of Directors (the "Board") of the Association 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 her assigned duties; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Association and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Defined Terms
When used anywhere in this Agreement, the following terms shall have the
meaning set forth herein.
(a) "Change in Control" shall mean any one of the following events:
(i) the acquisition of ownership, holding or power to vote more than 25% of the
voting stock of the Association or the Company, (ii) the acquisition of the
ability to control the election of a majority of the Association's or the
Company's directors, (iii) the acquisition of a controlling influence over the
management or policies of the Association or of the Company by any person or by
persons acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (iv) during any period of two consecutive
years, individuals (the "Continuing Directors") who at the beginning of such
period constitute the Board of Directors of the Association or of the Company
(the "Existing Board") cease for any reason to constitute at least two-thirds
thereof, provided that any individual whose election or nomination for election
as a member of the Existing Board was approved by a vote of at least two-thirds
of the Continuing Directors then in office shall be considered a Continuing
Director. Notwithstanding the foregoing, the Company's ownership of the
Association shall not of itself constitute a Change in Control for purposes of
the Agreement. For purposes of this paragraph only, the term "person" refers to
an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein.
(b) "Company" shall mean United Tennessee Bankshares, Inc.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and regulations
in effect from time to time.
(d) "Code Section 280G Maximum" shall mean the product of 2.99 and
the Employee's "base amount" as defined in Code Section 280G(b)(3).
(e) "Disability" shall mean a physical or mental infirmity which
impairs the Employee's ability to substantially perform her duties under this
Agreement and which results in the Employee becoming eligible for long-term
disability benefits under the Association's long-term disability plan (or, if
the Association has no such plan in effect, which impairs the Employee's ability
to substantially perform her duties under this Agreement for a period of 180
consecutive days).
(f) "Effective Date" shall mean the date referenced in the opening
paragraph of this Agreement.
(g) "Good Reason" shall mean any of the following events, which has
not been consented to in advance by the Employee in writing: (i) the requirement
that the Employee move her personal residence, or perform her principal
executive functions, more than thirty (30) miles from her primary office as of
the later of the Effective Date and the most recent voluntary relocation by the
Employee; (ii) a material reduction in the Employee's base compensation under
this Agreement as the same may be increased from time to time; (iii) the failure
by the Association or the Company to continue to provide the Employee with
compensation and benefits provided under this Agreement as the same may be
increased from time to time, or with benefits substantially similar to those
provided to her under any of the employee benefit plans in which the Employee
now or hereafter becomes a participant, or the taking of any action by the
Association or the Company which, directly or indirectly, would materially
reduce any of such benefits or deprive the Employee of any material fringe
benefit enjoyed by her under this Agreement; (iv) the assignment to the Employee
of duties and responsibilities materially different from those normally
associated with her position; or (v) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting responsibilities)
in connection with her employment with the Association.
(h) "Just Cause" shall mean, in the good faith determination of the
Association's Board of Directors, the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. No act, or failure to
act, on the Employee's part shall be considered
"willful" unless she has acted, or failed to act, with an absence of good faith
and without a reasonable belief that her action or failure to act was in the
best interest of the Association and the Company.
(i) "Protected Period" shall mean the twelve-month period following a
Change in Control.
2. Employment. The Employee is employed as the Branch Manager and
Assistant Secretary of the Association. The Employee shall render such
administrative and management services for the Association as are currently
rendered and as are customarily performed by persons situated in a similar
executive capacity. The Employee shall also promote, by entertainment or
otherwise, as and to the extent permitted by law, the business of the
Association. The Employee's other duties shall be such as the Board may from
time to time reasonably direct, including normal duties as an officer of the
Association.
3. Base Compensation. The Association agrees to pay the Employee
during the term of this Agreement a salary at the rate of $33,376 per annum,
payable in cash not less frequently than monthly. The Board shall review,
not less often than annually, the rate of the Employee's salary, and in its
sole discretion may decide to increase her salary.
4. Discretionary Bonuses. The Employee shall participate in an equitable
manner with all other senior management employees of the Association in
discretionary bonuses that the Board may award from time to time to the
Association's senior management employees. No other compensation provided for
in this Agreement shall be deemed a substitute for the Employee's right to
participate in such discretionary bonuses.
5. Participation in Retirement, Medical and Other Plans.
(a) The Employee shall be eligible to participate in any of the
following plans or programs that the Association may now or in the future
maintain: group hospitalization, disability, health, dental, sick leave, life
insurance, travel and/or accident insurance, auto allowance/auto lease,
retirement, pension, and/or other present or future qualified or nonqualified
plans provided by the Association, generally which benefits, taken as a whole,
must be at least as favorable as those in effect on the Effective Date.
(b) The Employee shall also be eligible to participate in any fringe
benefits which are or may become available to the Association's senior
management employees, including for example: any stock option or incentive
compensation plans, and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this
Agreement. The Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which she shall incur in connection with her services under
this Agreement upon substantiation of such expenses in accordance with the
policies of the Association.
6. Term. The Association hereby employs the Employee, and the Employee
hereby accepts such employment under this Agreement, for the period commencing
on the Effective Date and ending eighteen (18) months thereafter (or such
earlier date as is determined in accordance
with Section 10 or 12 hereof). Additionally, on each annual anniversary date
from the Effective Date, the Employee's term of employment shall be extended for
an additional one-year period beyond the then effective expiration date,
provided the Board determines in a duly adopted resolution that the performance
of the Employee has met the Board's requirements and standards, and that this
Agreement shall be extended. Only those members of the Board of Directors who
have no personal interest in this Employment Agreement shall discuss and vote on
the approval and subsequent review of this Agreement.
7. Loyalty; Noncompetition.
(a) During the period of her employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all her full business time, attention, skill, and efforts
to the faithful performance of her duties hereunder; provided, however, from
time to time, Employee may serve on the boards of directors of, and hold any
other offices or positions in, companies or organizations, which will not
present any conflict of interest with the Association or any of its subsidiaries
or affiliates, or unfavorably affect the performance of Employee's duties
pursuant to this Agreement, or will not violate any applicable statute or
regulation. "Full business time" is hereby defined as that amount of time
usually devoted to like companies by similarly situated executive officers.
During the term of her employment under this Agreement, the Employee shall not
engage in any business or activity contrary to the business affairs or interests
of the Association.
(b) Nothing contained in this Section shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business dissimilar from that of the Association, or, solely as a passive or
minority investor, in any business.
8. Standards. The Employee shall perform her duties under this Agreement
in accordance with such reasonable standards as the Board may establish from
time to time. The Association will provide Employee with the working facilities
and staff customary for similar executives and necessary for her to perform her
duties.
9. Vacation and Sick Leave. At such reasonable times as the Board shall
in its discretion permit, the Employee shall be entitled, without loss of pay,
to absent himself voluntarily from the performance of her 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 in
accordance with the policies that the Board periodically establishes for senior
management employees of the Association.
(b) The Employee shall not receive any additional compensation from
the Association on account of her failure to take a vacation or sick leave, and
the Employee shall not accumulate unused vacation or sick leave from one fiscal
year to the next, except in either case to the extent authorized by the Board.
(c) In addition to the aforesaid paid vacations, the Employee shall
be entitled
without loss of pay, to absent himself voluntarily from the performance of her
employment with the Association for such additional periods of time and for such
valid and legitimate reasons as the Board may in its discretion determine.
Further, the Board may 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 such
Board in its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick
leave benefit as established by the Board.
10. Termination and Termination Pay. Subject to Section 12 hereof, the
Employee's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Employee's employment under this Agreement shall
terminate upon her death during the term of this Agreement, in which event the
Employee's estate shall be entitled to receive the compensation due the Employee
through the last day of the calendar month in which her death occurred.
(b) Disability. (1) The Association may terminate the Employee's
employment after having established the Employee's Disability, in which event
the Employee shall be entitled to the compensation and benefits provided for
under this Agreement for (i) any period during the term of this Agreement and
prior to the establishment of the Employee's Disability during which the
Employee is unable to work due to the physical or mental infirmity, and (ii) any
period of Disability which is prior to the Employee's termination of employment
pursuant to this Section 10(b); provided that any benefits paid pursuant to the
Association's long term disability plan will continue as provided in such plan
without reduction for payments made pursuant to this Agreement.
(2) During any period that the Employee shall receive disability
benefits and to the extent that the Employee shall be physically and mentally
able to do so, she shall furnish such information, assistance and documents so
as to assist in the continued ongoing business of the Association and, if able,
shall make himself available to the Association to undertake reasonable
assignments consistent with her prior position and her physical and mental
health. The Association shall pay all reasonable expenses incident to the
performance of any assignment given to the Employee during the disability
period.
(c) Just Cause. The Board may, by written notice to the Employee,
immediately terminate her employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause.
(d) Without Just Cause; Constructive Discharge. The Board may, by
written notice to the Employee, immediately terminate her employment at any time
for a reason other than her Disability or Just Cause, in which event the
Employee shall be entitled to receive the following compensation and benefits
(unless such termination occurs during the Protected Period, in which event the
benefits and compensation provided for in Section 12 shall apply): the salary
provided pursuant to Section 3 hereof, up to the expiration date of this
Agreement, including any renewal term (the "Expiration Date"). All amounts
payable to the Employee shall be paid, at the option
of the Employee, either (I) in periodic payments through the Expiration Date, or
(II) in one lump sum within ten days of such termination.
(e) Good Reason. The Employee shall be entitled to receive the
compensation and benefits payable under subsection 10(d) hereof in the event
that the Employee voluntarily terminates employment within 90 days of an event
that constitutes Good Reason (unless such voluntary termination occurs during
the Protected Period, in which event the benefits and compensation provided for
in Section 12 shall apply).
(f) Termination or Suspension Under Federal Law. (1) If the Employee
is removed and/or permanently prohibited from participating in the conduct of
the Association's affairs by an order issued under Sections 8(e)(4) or 8(g)(1)
of the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) and (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.
(2) If the Association is in default (as defined in Section
3(x)(1) of FDIA), all obligations under this Agreement shall terminate as of the
date of default; however, this Paragraph shall not affect the vested rights of
the parties.
(3) All obligations under this Agreement shall terminate, 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 ("Director of OTS"), or his or her designee, at the time that
the Federal Deposit Insurance Corporation ("FDIC") or the Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of
the Association under the authority contained in Section 13(c) of FDIA; or (ii)
by the Director of the OTS, or his or her designee, at the time that 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. Such action shall not affect any vested rights of the parties.
(4) If a notice served under Section 8(e)(3) or (g)(1) of the
FDIA (12 U.S.C. 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the
Employee from participating in the conduct of the Association's affairs, the
Association's obligations under this Agreement shall be suspended as of the date
of such 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 contract obligations
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
(5) Any payments made to the Employee pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with both 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder,
and Regulatory Bulletin 27A, but only to the extent required thereunder on the
date any payment is required pursuant to this Agreement. In addition, in the
event the termination provisions in this Section 10(f) conflict with the
provisions set forth in 12 C.F.R. Section 563.39(b), the latter shall prevail.
(g) Voluntary Termination by Employee. Subject to Section 12 hereof,
the Employee may voluntarily terminate employment with the Association during
the term of this Agreement, upon at least 90 days' prior written notice to the
Board of Directors, in which case the Employee shall receive only her
compensation, vested rights and employee benefits up to the date of her
termination (unless such termination occurs pursuant to Section 10(d) hereof or
within the Protected Period, in Section 12(a) hereof, in which event the
benefits and compensation provided for in Sections 10(d) or 12, as applicable,
shall apply).
11. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.
12. Change in Control.
(a) Trigger Events. The Employee shall be entitled to collect the
severance benefits set forth in subsection (b) hereof in the event that either
the Employee voluntarily terminates employment within 90 days of an event that
both occurs during the Protected Period and constitutes Good Reason, or the
Association or the Company or their successor(s) in interest terminate the
Employee's employment without written notice of termination and for any reason
other than Just Cause during the Protected Period.
(b) Amount of Severance Benefit. If the Employee becomes entitled to
collect severance benefits pursuant to Section 12(a) hereof, the Association
shall:
(i) pay the Employee a severance benefit equal to 1.5 times her
base salary then in effect, but in no event greater than the
difference between the Code Section 280G Maximum and the sum of any
other "parachute payments" as defined under Code Section 280G(b)(2)
that the Employee receives on account of the Change in Control, and
(ii) pay for long-term disability and provide such medical
benefits as are available to the Employee under the provisions of
COBRA, for eighteen (18) months (or such longer period, up to 24
months, if COBRA is amended).
The amount payable under Section 12(b)(i) shall be paid in one lump sum
within ten days of the later of the date of the Change in Control and the
Employee's last day of employment with the Association or the Company. In the
event that the Employee, the Association, and the Company jointly agree that the
Employee has collected an amount exceeding the Code Section 280G Maximum, the
parties may agree in writing that such excess shall be treated as a loan ab
initio, which the Employee shall repay to the Association, on terms and
conditions mutually agreeable to the parties, together with interest at the
applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.
13. Indemnification. The Association and the Company agree that their
respective
Bylaws shall continue to provide for indemnification of directors, officers,
employees and agents of the Association and the Company, including the Employee
during the full term of this Agreement, and to at all times provide adequate
insurance for such purposes.
14. Reimbursement of Employee for Enforcement Proceedings. In the event
that any dispute arises between the Employee and the Association as to the terms
or interpretation of this Agreement, whether instituted by formal legal
proceedings or otherwise, including any action that the Employee takes to defend
against any action taken by the Association or the Company, the Employee shall
be reimbursed for all costs and expenses, including reasonable attorneys' fees,
arising from such dispute, proceedings or actions, provided that the Employee
obtains either a written settlement or a final judgement by a court of competent
jurisdiction substantially in her favor. Such reimbursement shall be paid
within ten days of Employee's furnishing to the Association written evidence,
which may be in the form, among other things, of a cancelled check or receipt,
of any costs or expenses incurred by the Employee.
15. Federal Income Tax Withholding. The Association may withhold all
federal and state income or other taxes from any benefit payable under this
Agreement as shall be required pursuant to any law or government regulation or
ruling.
16. Successors and Assigns.
(a) Association. This Agreement shall not be assignable by the
Association, provided that this Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Association which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Association.
(b) Employee. Since the Association is contracting for the unique
and personal skills of the Employee, the Employee shall be precluded from
assigning or delegating her rights or duties hereunder without first obtaining
the written consent of the Association; provided, however, that nothing in this
paragraph shall preclude (i) the Employee from designating a beneficiary to
receive any benefit payable hereunder upon her death, or (ii) the executors,
administrators, or other legal representatives of the Employee or her estate
from assigning any rights hereunder to the person or persons entitled thereunto.
(c) Attachment. 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 exclusion, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
17. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
18. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Tennessee shall govern this Agreement in all respects,
whether as to its validity, construction,
capacity, performance or otherwise.
19. 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.
20. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto and shall supersede any prior
agreement between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
ATTEST: NEWPORT FEDERAL SAVINGS & LOAN
ASSOCIATION
_________________ By:___________________________
Secretary Its Chairman of the Board
WITNESS:
_________________ __________________________
Xxxxx Xxxxxxx
EMPLOYMENT AGREEMENT
BETWEEN
NEWPORT FEDERAL SAVINGS & LOAN ASSOCIATION AND XXXXX XXXXXX
AND XXXXX XXXXXXX
1997 AMENDMENT
___________________
WHEREAS, on September 9, 0000, Xxxxxxx Xxxxxxx Savings & Loan
Association (the "Association") entered into an Employment Agreement (the
"Agreement") with Xxxxx Xxxxxx (the "Employee"); and Xxxxx Xxxxxxx.
WHEREAS, the Board of Directors of the Association and the Employee have
determined that it is in the best interests of the Association and the
Employee to amend the Agreement.
NOW, THEREFORE, the Agreement shall be amended as follows, with such
amendment to become effective immediately upon execution hereof:
1. The first sentence of Section 10(d) of the Agreement shall be
amended in its entirety to provide as follows:
The Board may, by written notice to the Employee, immediately
terminate her employment at any time for a reason other than her
Disability or Just Cause, in which event the Employee shall be
entitled to receive the following compensation and benefits (unless
such termination occurs during the Protected Period, in which event
the benefits and compensation provided for in Section 12 shall
apply): (i) the salary provided pursuant to Section 3 hereof, up to
the expiration date of this Agreement, including any renewal term
(the "Expiration Date"), plus said salary for an additional 12-month
period, and (ii) at the Employee's election either (A) cash in an
amount equal to the cost to the Employee of obtaining all health,
life, disability and other benefits which the Employee would have
been eligible to participate in through the Expiration Date based
upon the benefit levels substantially equal to those that the
Association provided for the Employee at the date of termination of
employment, or (B) continued participation under such Association
benefit plans through the Expiration Date, but only to the extent
the Employee continues to qualify for participation therein.
2. Section 10 of the Agreement shall be further amended by adding the
following subsection (h) immediately at the end thereof:
(h) Post-termination Health Insurance. If the Employee's
employment terminates with the Association or the Company for any
reason other
1997 Amendment
Page 2
than Just Cause, the Employee shall be entitled to purchase from the
Association, at the Employee's own expense which shall not exceed
applicable COBRA rates, family medical insurance under any group
health plan that the Association or the Company maintains for its
employees. This right shall be (i) in addition to, and not in lieu
of, any other rights that the Employee has under this Agreement, and
(ii) shall continue until the Employee first becomes eligible for
participation in Medicare.
3. Nothing contained herein shall be held to alter, vary or affect any
of the terms, provisions, or conditions of the Agreement other than as stated
above.
WHEREFORE, the undersigned hereby approve this 1997 Amendment to the
Agreement.
Date of Execution: September 9, 1997
[EXECUTIVE]
/s/ Xxxxx Xxxxxxx
------------------------------------
NEWPORT FEDERAL SAVINGS & LOAN ASSOCIATION
By /s/ Xxxxxxx Xxxxxxx Attest: /s/ Xxxxx Xxxxxx
------------------------------- ------------------------
Its President
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CORPORATE SEAL
