EXHIBIT 10
FIRST FEDERAL BANKSHARES, INC.
EMPLOYMENT AGREEMENT
FOR
XXXXXXX X. XXXXXXX
This Agreement is made effective as of the 4th day of January, 2005 by and
between First Federal Bankshares, Inc., a Delaware corporation (the "Company"),
with its principal administrative office at 000 Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxx
00000, and Xxxxxxx X. Xxxxxxx ("Executive").
WHEREAS, it is the desire of Executive to accept employment as the Chief
Executive Officer of the Company and of First Federal Bank, the federal stock
savings bank subsidiary of the Company (the "Bank"), and it is the desire of the
Company to obtain the services of Executive pursuant to the terms of this
Agreement; and
WHEREAS, the Company also wishes to provide Executive with certain
protections and benefits in the event of a Change in Control of the Company or
the Bank, as provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the Company and Executive hereby agree as
follows:
1. POSITION AND RESPONSIBILITIES
During the period of his employment hereunder, Executive agrees to serve as
President and Chief Executive Officer and, if elected, as a director of each of
the Company and of the Bank. During said period, Executive also agrees to serve,
if appointed, as an officer and, if elected, as a director of any other
subsidiary or affiliate of the Company. Failure to reappoint Executive as
President and Chief Executive Officer of the Company and the Bank without the
consent of Executive during the term of this Agreement shall constitute a breach
of this Agreement.
2. TERM AND DUTIES
(a) The period of Executive's employment under this Agreement shall begin
as of the date first above written. Commencing no later than January 31, 2007,
and continuing no later than January 31 of each year thereafter (the
"Anniversary Date"), this Agreement shall renew for an additional year such that
the remaining term shall be twenty-four (24) calendar months from such
Anniversary Date unless written notice of non-renewal ("Non-Renewal Notice") is
provided to Executive at least thirty (30) days and not more than sixty (60)
days prior to any such Anniversary Date, that this Agreement shall terminate at
the end of twenty-four (24) months following such Anniversary Date. Prior to
each notice period for non-renewal, the disinterested members of the Board of
Directors of the Company ("Board") will conduct a comprehensive performance
evaluation and review of Executive for purposes of determining whether to extend
this Agreement, and the results thereof shall be included in the minutes of the
Board's meeting.
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(b) Executive's duties as President and Chief Executive Officer of the
Company and the Bank are set forth on Exhibit A attached hereto. During the
period of his employment hereunder, except for periods of absence occasioned by
illness, reasonable vacation periods, and reasonable leaves of absence,
Executive shall faithfully perform his duties hereunder including activities and
services related to the organization, operation and management of the Company
and the Bank. For these purposes, "reasonable" shall be determined by reference
to similarly situated financial institutions or in accordance with industry
standards.
3. COMPENSATION AND REIMBURSEMENT
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b). In
consideration of the services to be rendered by Executive hereunder, the Company
and/or its subsidiaries shall pay Executive as compensation a salary of not less
than $230,000 per year ("Base Salary"). Such Base Salary shall be payable
bi-weekly, or in accordance with the Company's normal payroll practices. During
the period of this Agreement, Executive's Base Salary shall be reviewed at least
annually; the first such review will be made no later than December 31 of each
year during the term of this Agreement and shall be effective from the first day
of the next calendar year. Such review shall be conducted by a Committee
designated by the Board of Directors of the Company and the Board of Directors
of the Bank (collectively the "Boards"), and the Boards may increase, but not
decrease, Executive's Base Salary (any increase in Base Salary shall become the
"Base Salary" for purposes of this Agreement). In addition to the Base Salary
provided in this Section 3(a), the Company and/or its subsidiaries shall provide
Executive at no cost to Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Company and/or its
subsidiaries.
(b) The Company and/or its subsidiaries will provide Executive with
employee benefit plans, arrangements and perquisites substantially equivalent to
those in which Executive was participating or otherwise deriving benefit from
immediately prior to the beginning of the term of this Agreement, and the
Company and/or its subsidiaries will not, without Executive's prior written
consent, make any changes in such plans, arrangements or perquisites which would
adversely affect Executive's rights or benefits thereunder. Without limiting the
generality of the foregoing provisions of this Section 3(b), Executive will be
entitled to participate in or receive benefits under any employee benefit plans
including but not limited to, retirement plans, supplemental retirement plans,
pension plans, profit-sharing plans, health-and-accident plans, medical coverage
or any other employee benefit plan or arrangement made available by the Company
and/or its subsidiaries in the future to its senior executives and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements. Executive
will be entitled to incentive compensation and bonuses as provided in any plan
of the Company and/or its subsidiaries in which Executive is eligible to
participate (and he shall be entitled to a pro rata distribution under any
incentive compensation or bonus plan as to any year in which a termination of
employment occurs, other than termination for Just Cause). Nothing paid to
Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which Executive is entitled under this Agreement.
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(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Company and/or its subsidiaries shall pay or reimburse Executive
for all reasonable travel and other reasonable expenses incurred by Executive in
performing his obligations under this Agreement and may provide such additional
compensation in such form and such amounts as the Board may from time to time
determine. The Bank shall also provide Executive with a cellular phone, the cost
of which is paid or reimbursed by the Bank, and a credit card for purposes of
Executive's business expenditures.
(d) Immediately upon approval by the Board of Directors, the Bank shall
grant Executive 10,000 options to purchase Company common stock, which shall
vest ratably over a two-year period, with the vesting of one-half on the first
anniversary of the date of grant and the vesting of the second-half on the
second anniversary of the date of grant. In addition, if the Company adopts a
new stock option plan with the approval of shareholders, additional stock
options may be granted to Executive in the future, upon approval of the
Company's Board of Directors.
(e) The Bank shall provide Executive with paid time off and extended
illness benefits, in accordance with such benefit plan guidelines. Such paid
time-off and extended illness benefits shall begin accruing to Executive
immediately upon his first day of employment.
(f) The Bank shall pay Executive a $25,000 hiring/relocation/sign-up bonus.
Such amount shall be paid to Executive, subject to applicable withholding taxes,
with Executive's first paycheck. In the event Executive terminates employment
with the Bank for any reason other than a Change in Control within 18 months
from the date of this Agreement, Executive agrees to reimburse such amount on a
prorated basis.
4. OUTSIDE ACTIVITIES
Executive may serve as a member of the board of directors of business,
community and charitable organizations subject to the approval of the Board,
provided that in each case such service shall not materially interfere with the
performance of his duties under this Agreement or present any conflict of
interest. Such service to and participation in outside organizations shall be
presumed for these purposes to be for the benefit of the Company, and the
Company shall reimburse Executive his reasonable expenses associated therewith.
5. WORKING FACILITIES AND EXPENSES
Executive's principal place of employment shall be the Company's principal
executive offices. The Company shall provide Executive, at his principal place
of employment, with a private office, secretarial services and other support
services and facilities suitable to his position with the Company and necessary
or appropriate in connection with the performance of his duties under this
Agreement. The Company and/or its subsidiaries shall provide Executive with an
automobile suitable to the position of Chief Executive Officer of the Company,
and such automobile may be used by Executive in carrying out his duties under
this Agreement and for his personal use such as commuting between his residence
and his principal place of employment. The Company shall reimburse Executive for
the cost of maintenance, use and servicing of such automobile. The Company shall
reimburse Executive for his ordinary and necessary business expenses incurred in
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connection with the performance of his duties under this Agreement, including,
without limitation, fees for memberships in such clubs and organizations that
Executive and the Board mutually agree are necessary and appropriate to further
the business of the Company, and travel and reasonable entertainment expenses.
Reimbursement of such expenses shall be made upon presentation to the Company of
an itemized account of the expenses in such form as the Company may reasonably
require.
6. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(a) The provisions of this Section 6 shall apply upon the occurrence of an
Event of Termination (as herein defined) during Executive's term of employment
under this Agreement. As used in this Agreement, an "Event of Termination" shall
mean and include any one or more of the following:
(i) the termination by the Company or the Bank of Executive's full-time
employment hereunder for any reason other than (A) Disability (as
defined in Section 7) or Retirement (as defined in Section 7), or (B)
termination for Just Cause (as defined in Section 8); or
(ii) Executive's resignation from the Bank's employ, upon any
(A) failure to elect or reelect or to appoint or reappoint Executive
as Chief Executive Officer,
(B) material change in Executive's functions, duties, or
responsibilities, which change would cause Executive's position
to become one of lesser responsibility, importance, or scope from
the position and attributes thereof described in Section 1,
above,
(C) liquidation or dissolution of the Company or the Bank other than
liquidations or dissolutions that are caused by reorganizations
that do not affect the status of Executive, or
(D) material breach of this Agreement by the Company.
Upon the occurrence of any event described in clauses (ii) (A), (B), (C) or (D),
above, Executive shall have the right to elect to terminate his employment under
this Agreement by resignation upon sixty (60) days prior written notice given
within a reasonable period of time not to exceed four calendar months after the
initial event giving rise to said right to elect. Notwithstanding the preceding
sentence, in the event of a continuing breach of this Agreement by the Company,
Executive, after giving due notice within the prescribed time frame of an
initial event specified above, shall not waive any of his rights solely under
this Agreement and this Section by virtue of the fact that Executive has
submitted his resignation but has remained in the employment of the Company and
is engaged in good faith discussions to resolve any occurrence of an event
described in clauses (A), (B), (C) or (D) above.
(iii) The termination of Executive's employment by the Company, or the
Executive's voluntary resignation from the Company's employ, at any
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time following a Change in Control during the term of this Agreement.
For these purposes, a Change in Control of the Bank or the Company
shall mean a change in control of a nature that: (i) would be required
to be reported in response to Item 5.01 of the current report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii)
results in a Change in Control of the Bank or the Company within the
meaning of the Home Owners' Loan Act and the Rules and Regulations
promulgated by the Office of Thrift Supervision (or its predecessor
agency), as in effect on the date hereof; or (iii) without limitation
such a Change in Control shall be deemed to have occurred at such time
as (a) any "Person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Bank or the Company representing 25% or more of the
Bank's or the Company's outstanding securities; or (b) individuals who
constitute the Board on the date hereof (the "Incumbent Board") cease
for any reason to constitute at least a majority thereof, provided,
however, that this sub-section (b) shall not apply if the Incumbent
Board is replaced by the appointment by a Federal banking agency of a
conservator or receiver for the Bank and, provided further that any
person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least two-thirds of the
directors comprising the Incumbent Board or whose nomination for
election by the Company's stockholders was approved by the same
Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (b), considered as though he were a member of
the Incumbent Board; or (c) a proxy statement soliciting proxies from
stockholders of the Company, by someone other than the current
management of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or Bank or
similar transaction with one or more corporations as a result of which
the outstanding shares of the class of securities then subject to such
plan or transaction are exchanged for or converted into cash or
property or securities not issued by the Bank or the Company shall be
distributed and the requisite number of proxies approving such plan of
reorganization, merger or consolidation of the Company or Bank are
received and voted in favor of such transactions; or (d) a tender
offer is made for 25% or more of the outstanding securities of the
Bank or Company and shareholders owning beneficially or of record 25%
or more of the outstanding securities of the Bank or Company have
tendered or offered to sell their shares pursuant to such tender offer
and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 9(b), the Company and/or its subsidiaries
shall pay Executive, or, in the event of his subsequent death, his beneficiary
or beneficiaries, or his estate, as the case may be, as severance pay or
liquidated damages, or both, a sum equal to two (2) times the sum of (i) Base
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Salary and (ii) the highest rate of bonus awarded to Executive during the prior
two years. Payments hereunder shall be made in a lump sum within thirty (30)
days (or if Code Section 409A is applicable, on the first day of the seventh
full month) following Executive's termination of employment.
(c) Upon the occurrence of an Event of Termination, the Company will cause
to be continued, at Company's sole expense, life, medical, dental and disability
coverage substantially identical to the coverage maintained by the Company
and/or the Bank for Executive prior to his termination. Such coverage or payment
shall continue for twenty-four (24) months from the Date of Termination.
(d) Notwithstanding the preceding paragraphs of this Section 6, in the
event that:
(A) the aggregate payments or benefits to be made or afforded to
Executive under said paragraphs (the "Termination Benefits")
would be deemed to include an "excess parachute payment"
under Section 280G of the Code or any successor thereto, and
(B) if such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is one dollar
($1.00) less than an amount equal to the total amount of
payments permissible under Section 280G of the Code or any
successor thereto,
then the Termination Benefits to be paid to Executive shall be so reduced so as
to be a Non-Triggering Amount.
(e) Upon an Event of Termination (as defined in this Section 6), Executive
shall immediately resign from the Board of Directors of the Company and of the
Bank, and from the Board of Directors of any affiliate of the Company and the
Bank.
7. TERMINATION UPON RETIREMENT, DISABILITY OR DEATH
For purposes of this Agreement, termination by the Company of Executive's
employment based on "Retirement" shall mean termination of Executive's
employment by the Company upon attainment of age 65, or such later date as
determined to by the Board of Directors of the Company. Upon termination of
Executive's employment upon Retirement, Executive shall be entitled to all
benefits under any retirement plan of the Company and other plans to which
Executive is a party but shall not be entitled to the Termination Benefits
specified in Section 6(b) through (d) hereof.
In the event Executive is unable to perform his duties under this Agreement
on a full-time basis for a period of six (6) consecutive months by reason of
illness or other physical or mental disability ("Disability"), the Company may
terminate this Agreement, provided that the Company shall continue to be
obligated to pay Executive his Base Salary for the remaining term of the
Agreement, or one year, whichever is the longer period of time, and provided
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further that any amounts actually paid to Executive pursuant to any disability
insurance or other similar such program which the Company has provided or may
provide on behalf of its employees or pursuant to any xxxxxxx'x or social
security disability program shall reduce the compensation to be paid to
Executive pursuant to this paragraph.
In the event of Executive's death during the term of the Agreement, his
estate, legal representatives or named beneficiaries (as directed by Executive
in writing) shall be paid Executive's Base Salary as defined in Section 3(a) at
the rate in effect at the time Executive's death for a period of one (1) year
from the date of Executive's death, and the Company will continue to provide
medical and dental coverage for Executive's family for one (1) year after
Executive's death.
8. TERMINATION FOR JUST CAUSE
In the event that employment hereunder is terminated by the Company for
Just Cause, the Executive shall not be entitled to receive compensation or other
benefits for any period after such termination, except as provided by law. Upon
the termination of Executive's employment hereunder for Just Cause, Executive
shall immediately resign from the Board of Directors of the Company and of the
Bank, and from the Board of Directors of any affiliate of the Company and the
Bank. The phrase "Just Cause" as used herein, shall exist when there has been a
good faith determination by the Board that there shall have occurred one or more
of the following events with respect to the Executive: (i) the conviction of the
Executive of a felony or of any lesser criminal offense involving moral
turpitude; (ii) the willful commission by the Executive of a criminal or other
act that, in the judgment of the Board will likely cause substantial economic
damage to the Company or the Bank or substantial injury to the business
reputation of the Company or Bank; (iii) the commission by the Executive of an
act of fraud in the performance of his duties on behalf of the Company or Bank;
(iv) the continuing willful failure of the Executive to perform his duties to
the Company or Bank (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness) after written notice thereof
(specifying the particulars thereof in reasonable detail) and a reasonable
opportunity to be heard and cure such failure are given to the Executive by the
Board; or (v) an order of a federal or state regulatory agency or a court of
competent jurisdiction requiring the termination of the Executive's employment
by the Company. Notwithstanding the foregoing, Just Cause shall not be deemed to
exist unless there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board at a meeting of the Board called and held for
the purpose (after reasonable notice to the Executive and an opportunity for the
Executive to be heard before the Board), finding that in the good faith opinion
of the Board the Executive was guilty of conduct described above and specifying
the particulars thereof. Prior to holding a meeting at which the Board is to
make a final determination whether Just Cause exists, if the Board determines in
good faith at a meeting of the Board, by not less than a majority of its entire
membership, that there is probable cause for it to find that the Executive was
guilty of conduct constituting Just Cause as described above, the Board may
suspend the Executive from his duties hereunder for a reasonable period of time
not to exceed fourteen (14) days pending a further meeting at which the
Executive shall be given the opportunity to be heard before the Board. For
purposes of this subparagraph, no act or failure to act, on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by him not in
good faith without reasonable believe that his action or omission was in the
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best interest of the Company and the Bank. Upon a finding of Just Cause, the
Board shall deliver to the Executive a Notice of Termination, as more fully
described in Section 9 below.
9. NOTICE
(a) Any purported termination by the Company or by Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(b) "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the Notice
of Termination (which, except in the case of a termination for Just Cause, shall
not be less than thirty (30) days from the date such Notice of Termination is
given). In the event of termination for Just Cause, termination shall be
immediate upon the receipt of a Notice of Termination.
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the voluntary termination
by Executive in which case the Date of Termination shall be the date specified
in the Notice, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal having expired and no appeal having
been perfected) and provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, except
in the event of termination for Just Cause, the Bank will continue to pay
Executive his full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, Base Salary) and continue
Executive as a participant in all compensation, benefit and insurance plans in
which he was participating when the notice of dispute was given, until the
dispute is finally resolved in accordance with this Agreement, provided such
dispute is resolved within the term of this Agreement. If such dispute is not
resolved within the term of the Agreement, the Bank shall not be obligated, upon
final resolution of such dispute, to pay Executive compensation and other
payments accruing beyond the term of the Agreement. Amounts paid under this
Section following Notice of Termination shall be offset against or reduce any
other amounts due under this Agreement.
10. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section during the
term of this Agreement and for one (1) full year after the expiration or
termination hereof.
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(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank as may reasonably be required by the Bank in connection
with any litigation in which it or any of its subsidiaries or affiliates is, or
may become, a party.
11. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder, other than a
termination (whether voluntary or involuntary) following a Change in Control),
as a result of which the Company is paying Executive benefits under Section 6 of
this Agreement, Executive agrees not to compete with the Bank and/or the Company
for a period of one (1) year following such termination within twenty-five (25)
miles of any existing branch of the Bank or any subsidiary of the Company or
within twenty-five (25) miles of any office for which the Bank, the Company or a
Bank subsidiary of the Company has filed an application for regulatory approval
to establish an office, determined as of the effective date of such termination,
except as agreed to pursuant to a resolution duly adopted by the Board.
Executive agrees that during such period and within said area, cities, towns and
counties, Executive shall not work for or advise, consult or otherwise serve
with, directly or indirectly, any entity whose business materially competes with
the depository, lending or other business activities of the Bank and/or the
Company. The parties hereto, recognizing that irreparable injury will result to
the Bank and/or the Company, its business and property in the event of
Executive's breach of this Subsection 11(a) agree that in the event of any such
breach by Executive, the Bank and/or the Company will be entitled, in addition
to any other remedies and damages available, to an injunction to restrain the
violation hereof by Executive, Executive's partners, agents, servants,
employers, employees and all persons acting for or with Executive. Executive
represents and admits that Executive's experience and capabilities are such that
Executive can obtain employment in a business engaged in other lines and/or of a
different nature than the Bank and/or the Company, and that the enforcement of a
remedy by way of injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the Bank and/or the
Company from pursuing any other remedies available to the Bank and/or the
Company for such breach or threatened breach, including the recovery of damages
from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Company and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Company. Executive will not, during or
after the term of his employment, disclose any knowledge of the past, present,
planned or considered business activities of the Company or affiliates thereof
to any person, firm, corporation, or other entity for any reason or purpose
whatsoever (except for such disclosure as may be required to be provided to any
federal banking agency with jurisdiction over the Company or Executive).
Notwithstanding the foregoing, Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Company, and
Executive may disclose any information regarding the Bank or the Company which
is otherwise publicly available. In the event of a breach or threatened breach
by Executive of the provisions of this Section, the Company will be entitled to
an injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Company or affiliates thereof, or from rendering any services to any person,
firm, corporation, other entity to whom such knowledge, in whole or in part, has
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been disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Company from pursuing any other remedies available
to the Company for such breach or threatened breach, including the recovery of
damages from Executive.
12. SOURCE OF PAYMENTS; NO DUPLICATION OF PAYMENTS
(a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Company.
(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive from the Bank, such compensation payments and benefits
paid by the Bank will be subtracted from any amount due Executive under this
Agreement. Payments pursuant to this Agreement shall be paid by the Company
and/or the Bank and shall be allocated in proportion to the level of activity
and the time expended on such activities by Executive as determined by the
Company and the Bank on a quarterly basis.
13. NO EFFECT ON EMPLOYEE BENEFITS PLANS OR PROGRAMS
The termination of Executive's employment during the term of this Agreement
or thereafter, whether by the Company or by Executive, shall have no effect on
the vested rights of Executive under the Company's or the Bank's qualified or
non-qualified retirement, pension, savings, thrift, profit-sharing or stock
bonus plans, group life, health (including hospitalization, medical and major
medical), dental, accident and long term disability insurance plans, or other
employee benefit plans or programs, or compensation plans or programs in which
Executive was a participant.
14. REQUIRED REGULATORY PROVISIONS
(a) The Bank's Board of Directors may terminate Executive's employment at
any time, but any termination by the Bank's Board of Directors, other than
Termination for Cause, shall not prejudice Executive's right to compensation or
other benefits under this Agreement. Executive shall not have the right to
receive compensation or other benefits for any period after Termination for
Cause as defined in Section 8.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 U.S.C. xx.xx. 1818(e)(3)) or 8(g) (12 U.S.C. ss. 1818(g)) of
the Federal Deposit Insurance Act, as amended by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, the Bank's obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while their contract obligations were suspended and (ii) reinstate (in whole or
in part) any of the obligations which were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 U.S.C. xx.xx. 1818(e)) or 8(g) (12 U.S.C. ss. 1818(g)) of the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all obligations of the Bank under this
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contract shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Bank is in default as defined in Section 3(x) (12 U.S.C. ss.
1813(x)(1)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Bank under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Bank under this contract shall be terminated,
except to the extent determined that continuation of the contract is necessary
for the continued operation of the institution, (i) by the Director, at the time
Federal Deposit Insurance Corporation ("FDIC") or the Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of
the Bank; or (ii) by the Office of Thrift Supervision ("OTS") at the time the
OTS or its District Director approves a supervisory merger to resolve problems
related to the operations of the Bank or when the Bank is determined by the OTS
or FDIC to be in an unsafe or unsound condition. Any rights of the parties that
have already vested, however, shall not be affected by such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 USC
Section 1828(k) and any regulations promulgated thereunder.
15. NO ATTACHMENT
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
16. ENTIRE AGREEMENT; MODIFICATION AND WAIVER
(a) This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supercedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.
(b) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(c) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
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to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
17. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
18. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
19. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware but
only to the extent not superseded by federal law.
20. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators, one of whom shall be selected by the Company, one of whom
shall be selected by Executive and the third of whom shall be selected by the
other two arbitrators. The panel shall sit in a location within fifty (50) miles
from the location of the Company, in accordance with the rules of the Judicial
Mediation and Arbitration Systems (JAMS) then in effect. Judgment may be entered
on the arbitrators award in any court having jurisdiction; provided, however,
that Executive shall be entitled to seek specific performance of his right to be
paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
21. PAYMENT OF LEGAL FEES
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Company, provided that the dispute or interpretation has
been settled by Executive and the Company or resolved in Executive's favor.
22. INDEMNIFICATION
During the term of this Agreement, the Company shall provide Executive
(including his heirs, executors and administrators) with coverage under a
standard directors and officers liability insurance policy at its expense, and
shall indemnify Executive (and his heirs, executors and administrators) to the
fullest extent permitted under Delaware law against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action, suit
or proceeding in which he may be involved by reason of his having been a
director or officer of the Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys fees and the cost of reasonable settlements (such settlements must be
approved by the Board of Directors of the Company). If such action, suit or
proceeding is brought against Executive in his capacity as an officer or
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director of the Company, however, such indemnification shall not extend to
matters as to which Executive is finally adjudged to be liable for willful
misconduct in the performance of his duties.
23. SUCCESSOR TO THE COMPANY
The Company shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Company, expressly
and unconditionally to assume and agree to perform the Company's obligations
under this Agreement, in the same manner and to the same extent that the Company
would be required to perform if no such succession or assignment had taken
place.
[Signature Page Follows]
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SIGNATURES
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and Executive has signed this Agreement, on the day
and date first above written.
ATTEST: FIRST FEDERAL BANKSHARES, INC.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxxx
--------------------------- -------------------------------------
Secretary President and Chief Executive Officer
WITNESS: EXECUTIVE:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- -------------------------------------
Exhibit A
Duties of Executive as President and Chief Executive Officer:
The President and Chief Executive Officer is responsible for the overall
management of the Company and the Bank and establishment of its objectives,
policies and strategic plans. The President and Chief Executive Officer provides
leadership and direction to all departments and is the primary contact between
the Board of Directors and the Company and Bank staff.
