First Federal Savings Bank of Iowa Employment Agreement
First
Federal Savings Bank of Iowa
This
Employment
Agreement
(“Agreement”) is made and entered into as of December 14, 2007 by and between
First
Federal Savings Bank of Iowa,
a
savings bank organized and operating under the federal laws of the United States
and having an office at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxx 00000 (“Bank”) and
Xxxxx X. Xxxxxxx, an individual residing at 00000 Xxxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxx 00000 (“Xx. Xxxxxxx”).
W
i t n e s s e t h:
Whereas,
Xx.
Xxxxxxx currently serves the Bank in the capacity of President and Chief
Executive Officer; and
Whereas,
the
Bank is a wholly owned subsidiary of North Central Bancshares, Inc. (“Holding
Company”); and
Whereas,
effective as of the date of this Agreement, the Holding Company has converted
from a federally chartered mutual holding company to a publicly held Iowa
corporation; and
Whereas,
the
Bank desires to assure for itself the continued availability of Xx. Xxxxxxx’x
services and the ability of Xx. Xxxxxxx to perform such services with a minimum
of personal distraction in the event of a pending or threatened Change of
Control (as hereinafter defined); and
Whereas,
Xx.
Xxxxxxx is willing to continue to serve the Bank on the terms and conditions
hereinafter set forth; and
Whereas,
Xx.
Xxxxxxx and the Bank are parties to an Employment Agreement made and entered
into as of March 20, 1996 (“Original Agreement”); and
Whereas,
pursuant to section 25 of the Original Agreement, the parties wish to amend
the
Original Agreement;
Now,
Therefore,
in
consideration of the premises and the mutual covenants and conditions
hereinafter set forth, the Bank and Xx. Xxxxxxx hereby agree as
follows:
Section
1. Employment.
The
Bank
agrees to continue to employ Xx. Xxxxxxx, and Xx. Xxxxxxx hereby agrees to
such
continued employment, during the period and upon the terms and conditions set
forth in this Agreement.
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Section
2. Employment
Period: Remaining Unexpired Employment Period.
(a) The
terms
and conditions of this Agreement shall be and remain in effect during the period
of employment established under this section 2 (“Employment Period”). The
Employment Period shall be for an initial term of three years beginning on
the
date of this Agreement. Prior to the first anniversary of the date of this
Agreement and on each anniversary date thereafter (each, an “Anniversary Date”),
the Board of Directors of the Bank (“Board”) shall review the terms of this
Agreement and Xx. Xxxxxxx’x performance of services hereunder and may, in the
absence of objection from Xx. Xxxxxxx, approve an extension of the Employment
Agreement. In such event, the Employment Agreement shall be extended to the
third anniversary of the relevant Anniversary Date.
(b) For
all
purposes of this Agreement, the term “Remaining Unexpired Employment Period” as
of any date shall mean the period beginning on such date and ending on the
Anniversary Date on which the Employment Period (as extended pursuant to section
2(a)of this Agreement) is then scheduled to expire.
(c) Nothing
in this Agreement shall be deemed to prohibit the Bank at any time from
terminating Xx. Xxxxxxx’x employment during the Employment Period with or
without notice for any reason; provided,
however,
that
the relative rights and obligations of the Bank and Xx. Xxxxxxx in the event
of
any such termination shall be determined under this Agreement.
Section
3. Duties.
Xx.
Xxxxxxx shall serve as President and Chief Executive Officer of the Bank, having
such power, authority and responsibility and performing such duties as are
prescribed by or under the By-Laws of the Bank and as are customarily associated
with such position. Xx. Xxxxxxx shall devote his full business time and
attention (other than during weekends, holidays, approved vacation periods,
and
periods of illness or approved leaves of absence) to the business and affairs
of
the Bank and shall use his best efforts to advance the interests of the
Bank.
Section
4. Cash
Compensation.
In
consideration for the services to be rendered by Xx. Xxxxxxx hereunder, the
Bank
shall pay to him a salary no
less
than the rate in effect on the date of this agreement,
payable
in approximately equal installments in accordance with the Bank’s customary
payroll practices for senior officers. At least annually during the Employment
Period, the Board shall review Xx. Xxxxxxx’x annual rate of salary and may, in
its discretion, approve an increase therein. In addition to salary, Xx. Xxxxxxx
may receive other cash compensation from the Bank for services hereunder at
such
times, in such amounts and on such terms and conditions as the Board may
determine from time to time.
Section
5. Employee
Benefit Plans and Programs.
During
the Employment Period, Xx. Xxxxxxx shall be treated as an employee of the Bank
and shall be eligible to participate in and receive benefits under any and
all
qualified or non-qualified retirement, pension, savings, profit-sharing or
stock
bonus plans, any and all group life, health (including hospitalization, medical
and major medical), dental, accident and long term disability insurance plans,
and any other employee benefit and compensation plans (including, but not
limited to, any incentive compensation plans or programs, stock option and
appreciation rights plans and restricted stock plans) as may from time to time
be maintained by, or cover employees of, the Bank, in accordance with the terms
and conditions of such employee benefit plans and programs and compensation
plans and programs and consistent with the Bank’s customary
practices.
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Section
6. Indemnification
and Insurance.
(a) During
the Employment Period and until the expiration of time provided by law for
the
commencement of any judicial or administrative proceeding on the basis of such
service, the Bank shall cause Xx. Xxxxxxx to be covered by and named as an
insured under any policy or contract of insurance obtained by it to insure
its
directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of the Bank or service in
other capacities at the request of the Bank. The coverage provided to Xx.
Xxxxxxx pursuant to this section 6 shall be of the same scope and on the same
terms and conditions as the coverage (if any) provided to other officers or
directors of the Bank.
(b) To
the
maximum extent permitted under applicable law, during the Employment Period
and
until the expiration of time provided by law for the commencement of any
judicial or administrative proceeding on the basis of such service, the Bank
shall indemnify, and shall cause its subsidiaries and affiliates to indemnify
Xx. Xxxxxxx against and hold him harmless from any costs, liabilities, losses
and exposures to the fullest extent and on the most favorable terms and
conditions that similar indemnification is offered to any director or officer
of
the Bank or any subsidiary or affiliate thereof. This section 6(b) shall not
be
applicable where section 19 is applicable.
Section
7. Outside
Activities.
Xx.
Xxxxxxx may serve as a member of the boards of directors of such business,
community and charitable organizations as he may disclose to and as may be
approved by the Board (which approval shall not be unreasonably withheld);
provided,
however,
that
such service shall not materially interfere with the performance of his duties
under this Agreement. Xx. Xxxxxxx may also engage in personal business and
investment activities which do not materially interfere with the performance
of
his duties hereunder; provided,
however,
that
such activities are not prohibited under any code of conduct or investment
or
securities trading policy established by the Bank and generally applicable
to
all similarly situated executives. Xx. Xxxxxxx may also serve as an officer
or
director of the Holding Company on terms and conditions as the Bank and the
Holding Company may mutually agree upon, and such service shall not be deemed
to
materially interfere with Xx. Xxxxxxx’x performance of his duties hereunder or
otherwise to result in a material breach of this Agreement.
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Section
8. Working
Facilities and Expenses.
Xx.
Xxxxxxx’x principal place of employment shall be at the Bank’s executive offices
at the address first above written, or at such other location within Xxxxxxx
County, Iowa at which the Bank shall maintain its principal executive offices,
or at such other location as the Bank and Xx. Xxxxxxx may mutually agree upon.
The Bank shall provide Xx. Xxxxxxx at his principal place of employment with
a
private office, secretarial services and other support services and facilities
suitable to his position with the Bank and necessary or appropriate in
connection with the performance of his assigned duties under this Agreement. The
Bank shall provide to Xxxxxxx for his exclusive use an automobile owned or
leased by the Bank and appropriate to his position, to be used in the
performance of his duties hereunder, including commuting to and from his
personal residence. The Bank shall reimburse Xx. Xxxxxxx for his ordinary and
necessary business expenses, including, without limitation, all expenses
associated with his business use of the aforementioned automobile, fees for
memberships in such clubs and organizations as Xx. Xxxxxxx and the Bank shall
mutually agree are necessary and appropriate for business purposes, and his
travel and entertainment expenses incurred in connection with the performance
of
his duties under this Agreement, in each case upon presentation to the Bank
of
an itemized account of such expenses in such form as the Bank may reasonably
require.
Section
9. Termination
of Employment with Severance Benefits.
(a) Xx.
Xxxxxxx shall be entitled to the severance benefits described herein in the
event that his employment with the Bank terminates during the Employment Period
under any of the following circumstances:
(i) Xx.
Xxxxxxx’x voluntary resignation from employment with the Bank within ninety (90)
days following:
(A) the
failure of the Board to appoint or re-appoint or elect or re-elect Xx. Xxxxxxx
to the office of President and Chief Executive Officer (or a more senior office)
of the Bank;
(B) the
failure of the stockholders of the Bank to elect or re-elect Xx. Xxxxxxx or
the
failure of the Board (or the nominating committee thereof) to nominate Xx.
Xxxxxxx for such election or re-election;
(C) the
expiration of a thirty (30) day period following the date on which Xx. Xxxxxxx
gives written notice to the Bank of its material failure, whether by amendment
of the Bank’s Charter or By-laws, action of the Board or the Bank’s stockholders
or otherwise, to vest in Xx. Xxxxxxx the functions, duties, or responsibilities
prescribed in section 3 of this Agreement, unless, during such thirty (30)
day
period, the Bank fully cures such failure in a manner determined by Xx. Xxxxxxx,
in his discretion to be satisfactory; or
(D) the
expiration of a thirty (30) day period following the date on which Xx. Xxxxxxx
gives written notice to the Bank of its material breach of any term, condition
or covenant contained in this Agreement (including, without limitation any
reduction of Xx. Xxxxxxx’x rate of base salary in effect from time to time and
any change in the terms and conditions of any compensation or benefit program
in
which Xx. Xxxxxxx participates which, either individually or together with
other
changes, has a material adverse effect on the aggregate value of his total
compensation package), unless, during such thirty (30) day period, the Bank
fully cures such failure; or
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(ii) the
termination of Xx. Xxxxxxx’x employment with the Bank for any other reason not
described in section 10(a).
In
such
event, then, the Bank shall provide the benefits and pay to Xx. Xxxxxxx the
amounts described in section 9(b).
(b) Upon
the
termination of Xx. Xxxxxxx’x employment with the Bank under circumstances
described in section 9(a) of this Agreement, the Bank shall pay and provide
to
Xx. Xxxxxxx (or, in the event of his death, to his estate):
(i) his
earned but unpaid compensation as of the date of the termination of his
employment with the Bank, such payment to be made at the time and in the manner
prescribed by law applicable to the payment of wages but in no event later
than
thirty (30) days after termination of employment;
(ii) the
benefits, if any, to which he is entitled as a former employee under the
employee benefit plans and programs and compensation plans and programs
maintained for the benefit of the Bank’s officers and employees;
(iii) continued
group life, health (including hospitalization, medical and major medical),
dental, accident and long-term disability insurance benefits, in addition to
that provided pursuant to section 9(b)(ii), and after taking into account the
coverage provided by any subsequent employer, if and to the extent necessary
to
provide for Xx. Xxxxxxx, for the Remaining Unexpired Employment Period, coverage
equivalent to the coverage to which he would have been entitled under such
plans
(as in effect on the date of his termination of employment, or, if his
termination of employment occurs after a Change of Control, on the date of
such
Change of Control, whichever benefits are greater) if he had continued working
for the Bank during the Remaining Unexpired Employment Period at the highest
annual rate of compensation achieved during that portion of the Employment
Period which is prior to Xx. Xxxxxxx’x termination of employment with the Bank;
(iv) thirty
(30) days following his termination of employment with the Bank, a lump sum
payment, in an amount equal to the present value of the salary that Xx. Xxxxxxx
would have earned if he had continued working for the Bank during the Remaining
Unexpired Employment Period at the highest annual rate of salary achieved during
that portion of the Employment Period which is prior to Xx. Xxxxxxx’x
termination of employment with the Bank, where such present value is to be
determined using a discount rate equal to the applicable short-term federal
rate
prescribed under section 1274(d) of the Internal Revenue Code of 1986 (“Code”)
(the "Short Term AFR"), compounded using the compounding period corresponding
to
the Bank’s regular payroll periods for its officers, such lump sum to be paid in
lieu of all other payments of salary provided for under this Agreement in
respect of the period following any such termination;
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(v) thirty
(30) days following his termination of employment with the Bank, a lump sum
payment in an amount equal to the product of (A) the Bank’s “normal cost” for
its tax-qualified defined benefit plan for the most recently completed fiscal
year of the plan (expressed as a percentage of the compensation recognized
in
the plan’s benefit formula and determined by, or on the basis of information
furnished by, the plan’s actuary) multiplied by (B) the amount payable under
section 9(b)(iv);
(vi) thirty
(30) days following his termination of employment with the Bank, a lump sum
payment in an amount equal to the present value of the additional employer
contributions (or if greater in the case of a leveraged employee stock ownership
plan or similar arrangement, the additional assets allocable to him through
debt
service, based on the fair market value of such assets at termination of
employment) to which he would have been entitled under any and all qualified
and
non-qualified defined contribution plans maintained by, or covering employees
of, the Bank, if he were 100% vested thereunder and had continued working for
the Bank during the Remaining Unexpired Employment Period at the highest annual
rate of compensation achieved during that portion of the Employment Period
which
is prior to Xx. Xxxxxxx'x termination of employment with the Bank, and making
the maximum amount of employee contributions, if any, required under such plan
or plans, such present value to be determined on the basis of a discount rate,
compounded using the compounding period that corresponds to the frequency with
which employer contributions are made to the relevant plan, equal to the Short
Term AFR;
(vii) the
payments that would have been made to Xx. Xxxxxxx under any cash bonus or
long-term or short-term cash incentive compensation plan maintained by, or
covering employees of, the Bank if he had continued working for the Bank during
the Remaining Unexpired Employment Period and had earned the maximum bonus
or
incentive award in each calendar year that ends during the Remaining Unexpired
Employment Period, each annual payment to be equal to the product
of:
(A) the
maximum percentage rate at which an award was ever available to Xx. Xxxxxxx
under such incentive compensation plan; multiplied by
(B) the
salary that would have been paid to Xx. Xxxxxxx during each such calendar year
at the highest annual rate of salary achieved during that portion of the
Employment Period which is prior to Xx. Xxxxxxx’x termination of employment with
the Bank;
where
such payments are to be made (without discounting for early payment) within
thirty (30) days following Xx. Xxxxxxx’x termination of employment;
(viii) Xx.
Xxxxxxx shall be deemed fully vested in all options and appreciation rights
under any stock option or appreciation rights plan or program maintained by,
or
covering employees of, the Bank, even if he is not vested under such plan or
program;
(ix) Xx.
Xxxxxxx shall be deemed fully vested in all shares awarded under any restricted
stock plan maintained by, or covering employees of, the Bank, even if he is
not
vested under such plan.
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The
Bank
and Xx. Xxxxxxx hereby stipulate that the damages which may be incurred by
Xx.
Xxxxxxx following any such termination of employment are not capable of accurate
measurement as of the date first above written and that the payments and
benefits contemplated by this section 9(b) constitute reasonable damages under
the circumstances and shall be payable without any requirement of proof of
actual damage and without regard to Xx. Xxxxxxx’x efforts, if any, to mitigate
damages. The Bank and Xx. Xxxxxxx further agree that the Bank may condition
the
payments and benefits (if any) due under sections 9(b)(iii), (iv), (v), (vi)
and
(vii) on the receipt, not later than thirty (30) days after termination of
employment, of Xx. Xxxxxxx’x resignation from any and all positions which he
holds as an officer, director or committee member with respect to the Bank,
the
Holding Company or any subsidiary or affiliate of either of them; provided
that
the Bank requests such resignations in writing not later than twenty (20) days
after termination of employment.
Section
10. Termination
without Additional Bank Liability.
In
the
event that Xx. Xxxxxxx’x employment with the Bank shall terminate during the
Employment Period on account of:
(a) the
discharge of Xx. Xxxxxxx for “cause,” which, for purposes of this Agreement
shall mean 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 any material
breach of this Agreement, in each case as measured against standards generally
prevailing at the relevant time in the savings and community banking industry;
provided,
however,
that
Xx. Xxxxxxx shall not be deemed to have been discharged for cause unless and
until he shall have received a written notice of termination from the Board,
accompanied by a resolution duly adopted by affirmative vote of a majority
of
the entire Board at a meeting called and held for such purpose (after reasonable
notice to Xx. Xxxxxxx and a reasonable opportunity for Xx. Xxxxxxx to make
oral
and written presentations to the members of the Board, on his own behalf, or
through a representative, who may be his legal counsel, to refute the grounds
for the proposed determination) finding that in the good faith opinion of the
Board grounds exist for discharging Xx. Xxxxxxx for cause; or
(b) Xx.
Xxxxxxx’x voluntary resignation from employment with the Bank for reasons other
than those specified in section 9(a)(i) or section 11(b);
(c) Xx.
Xxxxxxx’x death; or
(d) a
determination that Xx. Xxxxxxx is eligible for long-term disability benefits
under the Bank’s long-term disability insurance program or, if there is no such
program, under the federal Social Security Act;
then
the
Bank shall have no further obligations under this Agreement, other than the
payment to Xx. Xxxxxxx (or, in the event of his death, to his estate) of his
earned but unpaid compensation as of the date of the termination of his
employment, and the provision of such other benefits, if any, to which he is
entitled as a former employee under the employee benefit plans and programs
and
compensation plans and programs maintained by, or covering employees of the
Bank.
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Section
11. Termination
Upon or Following a Change of Control.
(a) A
Change
of Control of the Bank (“Change of Control”) shall be deemed to have occurred
upon the happening of any of the following events:
(i) approval
by the stockholders of the Bank of a transaction that would result in the
reorganization, merger or consolidation of the Bank with one or more other
persons, other than a transaction following which:
(A) at
least
51% of the equity ownership interests of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) in substantially the same relative proportions by
persons who, immediately prior to such transaction, beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51%
of
the outstanding equity ownership interests in the Bank; and
(B) at
least
51% of the securities entitled to vote generally in the election of directors
of
the entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially
the
same relative proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the securities entitled to vote generally in
the
election of directors of the Bank;
(ii) the
acquisition of all or substantially all of the assets of the Bank or beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act)
of 20% or more of the outstanding securities of the Bank entitled to vote
generally in the election of directors by any person or by any persons acting
in
concert, or approval by the stockholders of the Bank of any transaction which
would result in such an acquisition; or
(iii) a
complete liquidation or dissolution of the Bank, or approval by the stockholders
of the Bank of a plan for such liquidation or dissolution; or
(iv) the
occurrence of any event if, immediately following such event, at least 50%
of
the members of the board of directors of the Bank do not belong to any of the
following groups:
(A) individuals
who were members of the Board of the Bank on the date of this Agreement;
or
(B) individuals
who first became members of the Board of the Bank after the date of this
Agreement either:
(I) upon
election to serve as a member of the Board of the Bank by affirmative vote
of
three-quarters of the members of such board, or of a nominating committee
thereof, in office at the time of such first election; or
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(II) upon
election by the stockholders of the Bank to serve as a member of the Board
of
the Bank, but only if nominated for election by affirmative vote of
three-quarters of the members of the Board of the Bank, or of a nominating
committee thereof, in office at the time of such first nomination;
provided,
however,
that
such individual’s election or nomination did not result from an actual or
threatened election contest (within the meaning of Rule 14a-11 of Regulation
14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of the Board
of
the Bank;
(v) any
event
which would be described in section 11(a)(i), (ii), (iii) or (iv) if the term
“Holding Company” were substituted for the term “Bank” therein.
In
no
event, however, shall a Change of Control be deemed to have occurred as a result
of any acquisition of securities or assets of the Bank, the Holding Company,
or
any affiliate or subsidiary of either of them, by the Bank, the Holding Company
or any affiliate or subsidiary of either of them, or by any employee benefit
plan maintained by any of them. For purposes of this section 11 the term
“person” shall have the meaning assigned to it under sections 13(d)(3) or
14(d)(2) of the Exchange Act.
(b) In
the
event of a Change of Control, Xx. Xxxxxxx shall be entitled to the payments
and
benefits contemplated by section 9(b) in the event of his termination employment
with the Bank under any of the circumstances described in section 9(a) of this
Agreement or under any of the following circumstances:
(i) resignation,
voluntary or otherwise, by Xx. Xxxxxxx at any time during the Employment Period
and within ninety (90) days following his demotion, loss of title, office or
significant authority or responsibility, or following any reduction in any
element of his package of compensation and benefits;
(ii) resignation,
voluntary or otherwise, by Xx. Xxxxxxx at any time during the Employment Period
and within ninety (90) days following any relocation of his principal place
of
employment or any change in working conditions at such principal place of
employment which is embarrassing, derogatory or otherwise materially
adverse;
(iii) resignation,
voluntary or otherwise, by Xx. Xxxxxxx at any time during the Employment Period
following the failure of any successor to the Bank in the Change of Control
to
include Xx. Xxxxxxx in any compensation or benefit program maintained by it
or
covering any of its executive officers, unless Xx. Xxxxxxx is already covered
by
a substantially similar plan of the Bank which is at least as favorable to
him;
or
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(iv) resignation,
voluntary or otherwise, for any reason whatsoever following the expiration
of a
transition period of thirty days beginning on the effective date of the Change
of Control (or such longer period, not to exceed ninety (90) days beginning
on
the effective date of the Change in Control, as the Bank or its successor may
reasonably request) to facilitate a transfer of management
responsibilities.
Section
12. Maximum
Limitations on Severance Benefits.
(a) Notwithstanding
anything in this Agreement to the contrary, in the event that the payments
provided to Xx. Xxxxxxx (or in the event of his death, to his estate) under
this
Agreement constitute an "excess parachute payment" under section 280G of the
Code, such payments shall be limited to 2.99 times his average compensation
(including salary, bonuses, amounts contributed on behalf of Xx. Xxxxxxx to
any
employee benefit plans and programs and compensation plans and programs
maintained for the benefit of the Bank's officers and employees and any other
cash or non-cash compensation paid to Xx. Xxxxxxx) for the period of five
taxable years ending immediately prior to his termination of employment (or
for
such shorter period during which Xx. Xxxxxxx has served as a full-time employee
of the Bank).
(b) In
addition to the limitations of section 12(a) if (i) the making of payments
and
the provision of benefits to Xx. Xxxxxxx under this Agreement would, in the
absence of this section 12(b), cause Xx. Xxxxxxx to be subject to the excise
tax
imposed under section 4999 of the Code and (ii) the limitation of Xx. Xxxxxxx'x
payments and benefits as provided in this section 12(b) would require a
reduction in payments and benefits that is less than or equal to the excise
tax
that otherwise would be imposed, then the payments and benefits made to Xx.
Xxxxxxx under this Agreement shall be limited, in such manner as Xx. Xxxxxxx,
in
his discretion, may determine, to the maximum amount that may be paid without
resulting in the imposition of an excise tax under section 4999 of the
Code.
Section
13. Covenant
Not To Compete.
Xx.
Xxxxxxx hereby covenants and agrees that, in the event of his termination of
employment with the Bank prior to the expiration of the Employment Period,
for a
period of one (1) year following the date of his termination of employment
with
the Bank (or, if less, for the Remaining Unexpired Employment Period), he shall
not, without the written consent of the Bank, become an officer, employee,
consultant, director or trustee of any savings bank, savings and loan
association, savings and loan holding company, bank or bank holding company,
or
any direct or indirect subsidiary or affiliate of any such entity, that entails
working in any city, town or county in which the Bank or the Holding Company
has
an office or has filed an application for regulatory approval to establish
an
office, determined as of the effective date of Xx. Xxxxxxx’x termination of
employment; provided,
however,
that
this section 13 shall not apply if Xx. Xxxxxxx’x employment is terminated for
the reasons set forth in section 9(a) or section 11(b); and provided, further,
that if Xx. Xxxxxxx’x employment shall be terminated on account of disability as
provided in section 10(d) of this Agreement, this section 13 shall not prevent
Xx. Xxxxxxx from accepting any position or performing any services if (a) he
first offers, by written notice, to accept a similar position with, or perform
similar services for, the Bank on substantially the same terms and conditions
and (b) the Bank declines to accept such offer within ten (10) days after such
notice is given. If Xx. Xxxxxxx resigns voluntarily with advance written notice,
any period of employment with the Bank after giving notice and before the
effective date of his termination of employment shall count as a part of the
non-compete period.
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Section
14. Confidentiality.
Unless
he
obtains the prior written consent of the Bank, Xx. Xxxxxxx shall keep
confidential and shall refrain from using for the benefit of himself, or any
person or entity other than the Bank or any entity which is a subsidiary of
the
Bank or of which the Bank is a subsidiary, any material document or information
obtained from the Bank, or from its parent or subsidiaries, in the course of
his
employment with any of them concerning their properties, operations or business
(unless such document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made available
to
the public through no fault of his own) until the same ceases to be material
(or
becomes so ascertainable or available); provided,
however,
that
nothing in this section 14 shall prevent Xx. Xxxxxxx, with or without the Bank’s
consent, from participating in or disclosing documents or information in
connection with any judicial or administrative investigation, inquiry or
proceeding to the extent that such participation or disclosure is required
under
applicable law.
Section
15. Solicitation.
Xx.
Xxxxxxx hereby covenants and agrees that, for a period of one (1) year following
his termination of employment with the Bank, he shall not, without the written
consent of the Bank, either directly or indirectly:
(a) solicit,
offer employment to, or take any other action intended, or that a reasonable
person acting in like circumstances would expect, to have the effect of causing
any officer or employee of the Bank, the Holding Company or any affiliate,
as of
the date of this Agreement, of either of them to terminate his or her employment
and accept employment or become affiliated with, or provide services for
compensation in any capacity whatsoever to, any savings bank, savings and loan
association, bank, bank holding company, savings and loan holding company,
or
other institution engaged in the business of accepting deposits and making
loans, doing business in any city, town or county in which the Bank or the
Holding Company has an office or has filed an application for regulatory
approval to establish an office, determined as of the date of this
Agreement;
(b) provide
any information, advice or recommendation with respect to any such officer
or
employee of any savings bank, savings and loan association, bank, bank holding
company, savings and loan holding company, or other institution engaged in
the
business of accepting deposits and making loans, doing business in any city,
town or county in which the Bank or the Holding Company has an office or has
filed an application for regulatory approval to establish an office, determined
as of the date of this Agreement, that is intended, or that a reasonable person
acting in like circumstances would expect, to have the effect of causing any
officer or employee of the Bank, the Holding Company or any affiliate, as of
the
date of this Agreement, of either of them to terminate his or her employment
and
accept employment or become affiliated with, or provide services for
compensation in any capacity whatsoever to, such savings bank, savings and
loan
association, bank, bank holding company, savings and loan holding company,
or
other institution engaged in the business of accepting deposits and making
loans; or
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(c) solicit,
provide any information, advice or recommendation or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any customer of the Bank to terminate an existing
business or commercial relationship with the Bank.
If
Xx.
Xxxxxxx resigns voluntarily with advance written notice, any period of
employment with the Bank after giving notice and before the effective date
of
his termination of employment shall count as part of the non-solicitation
period.
Section
16. No
Effect on Employee Benefit Plans or Programs.
The
termination of Xx. Xxxxxxx’x employment during the term of this Agreement or
thereafter, whether by the Bank or by Xx. Xxxxxxx, shall have no effect on
the
rights and obligations of the parties hereto under 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 such
other employee benefit plans or programs, or compensation plans or programs,
as
may be maintained by, or cover employees of, the Bank from time to
time.
Section
17. Successors
and Assigns.
This
Agreement will inure to the benefit of and be binding upon Xx. Xxxxxxx, his
legal representatives and testate or intestate distributees, and the Bank and
its successors and assigns, including any successor by merger or consolidation
or any other person or firm or corporation to which all or substantially all
of
the assets and business of the Bank may be sold or otherwise transferred.
Failure of the Bank to obtain from any successor its express written assumption
of the Bank’s obligations hereunder at least sixty (60) days in advance of the
scheduled effective date of any such succession shall be deemed a material
breach of this Agreement unless cured within ten (10) days after notice thereof
by Xx. Xxxxxxx to the Bank.
Section
18. Notices.
Any
communication required or permitted to be given under this Agreement, including
any notice, direction, designation, consent, instruction, objection or waiver,
shall be in writing and shall be deemed to have been given at such time as
it is
delivered personally, or five (5) days after mailing if mailed, postage prepaid,
by registered or certified mail, return receipt requested, addressed to such
party at the address listed below or at such other address as one such party
may
by written notice specify to the other party:
If
to Xx.
Xxxxxxx:
Xx.
Xxxxx
X. Xxxxxxx
[ ]
[ ]
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12
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If
to the
Bank:
First
Federal Savings Bank of Iowa
000
Xxxxxxx Xxxxxx
X.X.
Xxx
0000
Xxxx
Xxxxx, Xxxx 00000
Attention:
Corporate
Secretary
with
a copy to:
Xxxxxxx
Xxxxxxxx & Wood LLP
Two
World
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: W.
Xxxxxx Xxxxxx, Esq.
Section
19. Indemnification
for Attorneys’ Fees.
From
and
after the earliest date on which a Change of Control occurs, the Bank shall
indemnify, hold harmless and defend Xx. Xxxxxxx against reasonable costs,
including legal fees, incurred by him in connection with or arising out of
any
action, suit or proceeding in which he may be involved, as a result of his
efforts, in good faith, to defend or enforce the terms of this Agreement;
provided,
however,
that
Xx. Xxxxxxx shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Bank’s obligations hereunder shall be conclusive
evidence of Xx. Xxxxxxx’x entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
Section
20. Severability.
A
determination that any provision of this Agreement is invalid or unenforceable
shall not affect the validity or enforceability of any other provision
hereof.
Section
21. Waiver.
Failure
to insist upon strict compliance with any of the terms, covenants or conditions
hereof shall not be deemed a waiver of such term, covenant, or condition. A
waiver of any provision of this Agreement must be made in writing, designated
as
a waiver, and signed by the party against whom its enforcement is sought. Any
waiver or relinquishment of any right or power hereunder at any one or more
times shall not be deemed a waiver or relinquishment of such right or power
at
any other time or times.
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Section
22. Counterparts.
This
Agreement may be executed in two (2) or more counterparts, each of which shall
be deemed an original, and all of which shall constitute one and the same
Agreement.
Section
23. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
federal laws of the United States and, to the extent that federal law is
inapplicable, in accordance with the laws of the State of Iowa applicable to
contracts entered into and to be performed entirely within the State of
Iowa.
Section
24. Headings
and Construction.
The
headings of sections in this Agreement are for convenience of reference only
and
are not intended to qualify the meaning of any section. Any reference to a
section number shall refer to a section of this Agreement, unless otherwise
stated.
Section
25. Entire
Agreement; Modifications.
This
instrument contains the entire agreement of the parties relating to the subject
matter hereof, and supersedes 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.
Section
26. Survival.
The
provisions of sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 27 and
28
shall survive the expiration of the Employment Period or termination of this
Agreement.
Section
27. Equitable
Remedies.
The
Holding Company and Xx. Xxxxxxx hereby stipulate that money damages are an
inadequate remedy for violations of sections 6(a), 13, 14 or 15 of this
Agreement and agree that equitable remedies, including, without limitations,
the
remedies of specific performance and injunctive relief, shall be available
with
respect to the enforcement of such provisions.
Section
28. Required
Regulatory Provisions.
The
following provisions are included for the purposes of complying with various
laws, rules and regulations applicable to the Bank:
(a) Notwithstanding
anything herein contained to the contrary, in no event shall the aggregate
amount of compensation payable to Xx. Xxxxxxx under section 9(b) hereof
(exclusive of amounts described in section 9(b)(i), (viii) and (ix)) exceed
the
value of three times Xx. Xxxxxxx’x average annual total compensation for the
last five consecutive calendar years to end prior to his termination of
employment with the Bank (or for his entire period of employment with the Bank
if less than five calendar years).
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14
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(b) Notwithstanding
anything herein contained to the contrary, any payments to Xx. Xxxxxxx by the
Bank, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with section 18(k) of the Federal Deposit
Insurance Act (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated
thereunder.
(c) Notwithstanding
anything herein contained to the contrary, if Xx. Xxxxxxx is suspended from
office and/or temporarily prohibited from participating in the conduct of the
affairs of the Bank pursuant to a notice served under section 8(e)(3) or 8(g)(1)
of the FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Bank’s obligations
under this Agreement shall be suspended as of the date of service of such
notice, unless stayed by appropriate proceedings. If the charges in such notice
are dismissed, the Bank, in its discretion, may (i) pay to Xx. Xxxxxxx all
or
part of the compensation withheld while the Bank’s obligations hereunder were
suspended and (ii) reinstate, in whole or in part, any of the obligations which
were suspended.
(d) Notwithstanding
anything herein contained to the contrary, if Xx. Xxxxxxx is removed and/or
permanently prohibited from participating in the conduct of the Bank’s affairs
by an order issued under section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C.
§1818(e)(4) or (g)(1), all prospective obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights and obligations of the Bank and Xx. Xxxxxxx shall not be
affected.
(e) Notwithstanding
anything herein contained to the contrary, if the Bank is in default (within
the
meaning of section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1), all
prospective obligations of the Bank under this Agreement shall terminate as
of
the date of default, but vested rights and obligations of the Bank and Xx.
Xxxxxxx shall not be affected.
(f) Notwithstanding
anything herein contained to the contrary, all prospective obligations of the
Bank hereunder shall be terminated, except to the extent that a continuation
of
this Agreement is necessary for the continued operation of the Bank: (i) by
the
Director of the Office of Thrift Supervision (“OTS”) or his designee or the
Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in section 13(c) of the FDI Act, 12 U.S.C: §1823(c); (ii) by
the Director of the OTS or his designee at the time such Director or designee
approves a supervisory merger to resolve problems related to the operation
of
the Bank or when the Bank is determined by such Director to be in an unsafe
or
unsound condition. The vested rights and obligations of the parties shall not
be
affected.
If
and to
the extent that any of the foregoing provisions is not, or shall cease to be,
required by applicable law, rule or regulation, the same shall become
inoperative in the case of the Bank as though eliminated by formal amendment
of
this Agreement.
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Section
29. Section
409A of the Internal Revenue Code.
Xx.
Xxxxxxx and the Bank acknowledge that each of the payments and benefits promised
to Xx. Xxxxxxx under this Agreement must either comply with the requirements
of
Section 409A of the Internal Revenue Code ("Section 409A") and the regulations
thereunder or qualify for an exception from compliance. To that end, Xx. Xxxxxxx
and the Bank agree that (a) the payment described in Section 9(b)(i) is intended
to be exempt from Section 409A pursuant to Treasury Regulation section
1.409A-1(b)(3) as payment made pursuant to the Bank’s customary payment timing
arrangement;
and (b)
the welfare benefits provided in kind under section 9 (b)(iii) are intended
to
be exempt from Section 409A as welfare benefits pursuant to Treasury Regulation
Section 1.409A-1(a)(5) and/or as benefits not includible in gross income. In
the
case of a payment that is not exempt from Section 409A, the payment shall not
be
made prior to, and shall, if necessary, be deferred (with interest at the annual
rate of 6%, compounded monthly from the date of Xx. Xxxxxxx’x termination of
employment to the date of actual payment) to and paid on the later of the
earliest date on which Xx. Xxxxxxx experiences a separation from service (within
the meaning of Treasury Regulation Section 1.409A-1(h)) and, if Xx. Xxxxxxx
is a
specified employee (within the meaning of Treasury Regulation Section
1.409A-1(i)) on the date of his separation from service, the first day of the
seventh month following Xx. Xxxxxxx’x separation from service. Furthermore, this
Agreement shall be construed and administered in such manner as shall be
necessary to effect compliance with Section 409A and shall be subject to
amendment in the future, in such manner as the Bank may deem necessary or
appropriate to effect such compliance; provided that any such amendment shall
preserve for Xx. Xxxxxxx the present value of the payments due under this
Agreement.
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In
Witness Whereof,
the
Bank has caused this Agreement to be executed and Xx. Xxxxxxx has hereunto
set
his hand, all as of the day and year first above written.
| /s/ Xxxxx X. Xxxxxxx |
| Xxxxx X. Xxxxxxx |
|
ATTEST:
|
First Federal Savings Bank of Iowa | |||
|
By:
|
/s/ Xxxxx X. Xxxxxx | By: |
/s/
C. Xxxxxx Xxxxxxxxx
|
|
|
Secretary
|
Name: C.
Xxxxxx Xxxxxxxxx
Title:
President
|
|||
|
[Seal]
|
||||
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STATE
OF
IOWA
)
:
ss.:
COUNTY
OF
XXXXXXX )
On
this
__________ day of __________________, before me personally came Xxxxx X.
Xxxxxxx, to me known, and known to me to be the individual described in the
foregoing instrument, who, being by me duly sworn, did depose and say that
he
resides at the address set forth in said instrument, and that he signed his
name
to the foregoing instrument.
|
Notary
Public
|
STATE
OF
IOWA
)
:
ss.:
COUNTY
OF
XXXXXXX )
On
this
___________ day of _________________________, before me personally came
_____________, to me known, who, being by me duly sworn, did depose and say
that
he resides at ___________________________________________________, that he
is
the ________________________________ of First
Federal Savings Bank of Iowa,
the
savings bank described in and which executed the foregoing instrument; that
he
knows the seal of said savings bank; that the seal affixed to said instrument
is
such seal; that it was so affixed by order of the Board of Directors of said
savings bank; and that he signed his name thereto by like order.
|
Notary
Public
|
Page
18
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