Exhibit 10.10
VAN HOUTEN EMPLOYMENT AGREEMENT
This Agreement is made effective as of April 13, 1999, among Bank West
Financial Corporation, a Michigan corporation ("BWFC"), Bank West, a Michigan
savings bank, both with offices at 0000 Xxxxx Xxxx Xxxx, XX, Xxxxx Xxxxxx, XX
00000-0000 (collectively referred to as "BW") and Xxxxxx X. Xxx Xxxxxx, whose
address is 0000 Xxxxxxxx XX, Xxxxx Xxxxxx, XX 00000 ("Van Houten").
Factual Background
Van Houten has been employed in the banking industry for more than 45
years, during which time he has developed considerable skills regarding the
marketing of bank products and the management of banking institutions. BW
desires to employ Van Houten in the capacity of interim Chief Executive Officer
and to receive the benefits of his knowledge and expertise. Van Houten desires
to serve BW in that capacity. Because of the nature of BW's business, Van Houten
may acquire valuable confidential information concerning BW, BW=s products and
programs, or BW's customers.
Terms and Conditions
1. Term. BW retains Van Houten for an indefinite term commencing April
13, 1999, (the "Effective Date"). This Agreement shall continue until
terminated. Either party may terminate this Agreement for any reason or no
reason upon providing 30 days written notice to the other.
2. Duties. Van Houten shall be employed as interim Chief Executive
Officer of BW. His duties shall be designated by the Boards of Directors of BW
from time to time. Van Houten and BW acknowledge that Van Houten is expected to
be a full-time employee but recognize this may not always require his full-time
presence at the BW offices.
3. Compensation. As compensation for the services which Van Houten may
render to BW, BW shall pay Van Houten a salary, initially at the annual rate of
$9,600 per year (the "Compensation"). The Compensation shall be payable in equal
biweekly installments of $369.23 commencing April 16, 1999, and continuing every
other Friday after that until the end of the Term. The $9,600 is the current
limit which Van Houten can earn and still draw his full Social Security
retirement benefits. Each time that limit is raised by Social Security
regulations while this Agreement remains in effect, the annual salary rate shall
be increased to the amount of the new limit, effective with the date of increase
in the limit. In no event shall the salary amount exceed that limit. BW shall
withhold from the payments to Van Houten under this Agreement any and all
applicable withholding, payroll, and other taxes and similar charges as required
by law, as well as appropriate employee deductions or contributions to
continuing employee benefit plans.
4. Travel & Motor Vehicle Allowance. BW shall provide Van Houten with a
monthly motor vehicle allowance of $400 (the "Motor Vehicle Allowance"). The
Motor Vehicle Allowance shall be applied toward the lease, purchase, maintenance
and operating expenses (including insurance, road service, etc.) of a motor
vehicle of sufficient size, appearance and quality consistent with that of Van
Houten's professional position with BW. It is expected that the Motor Vehicle
Allowance will not be sufficient to completely reimburse Van Houten for all his
motor vehicle expenses. Any motor vehicle expenses incurred by Van Houten which
are not covered by the Motor Vehicle Allowance shall be paid by Van Houten
without reimbursement by BW.
5. Entertainment and Other Travel Expenses. In addition to the Motor
Vehicle Allowance, BW shall also reimburse Van Houten for reasonable customary
expenditures incurred for travel and entertainment on behalf of BW. These
expenses shall be subject to approval of the Chairman of BW.
6. Health Insurance; Retirement Benefits. BW shall attempt to include
Van Houten in all benefits of life insurance and retirement plans provided by BW
for its other full-time employees. BW shall have the right to change carriers
and coverage without incurring an obligation to Van Houten. With the
exception of dental coverage, Van Houten waives the right to participate in BW=s
medical plan. BW shall attempt to include Van Houten in BW=s dental plan under
the same terms as those offered to other full-time employees.
7. Vacation. Van Houten shall be entitled to paid annual vacations in
accordance with the policies as established from time to time by the Board of
Directors of BW but in any event not less than three weeks per year.
8. Incentive Stock Option.
x. Xxxxx and Vesting of Option. On the Effective Date, BWFC
granted to Van Houten an incentive stock option for 33,334 shares of BWFC common
stock (the "Option"). The Option has been granted pursuant to the BWFC 1995 Key
Employee Stock Compensation Program, and all addendums to it (the "Program").
The Option exercise price is $8.656 per share. The Program provides that the
stock vests at a rate of 20% per year (the "Plan Vesting Rate"). For purposes of
this Agreement, a vesting calculation shall also be computed assuming the stock
shall vest monthly based upon a rate of 33.33% per year (the "Termination
Vesting Rate") (The monthly vesting calculation shall be made on the 14th day of
each month, commencing with the 14th day of May, 1999, and shall vest at the
rate of 2.78% per month).
b. Payment upon Termination - Before April 14, 2004. In the
event Van Houten's employment is terminated prior to April 14, 2004 (which is
the date on which all of the 33,334 shares would be vested at the Plan Vesting
Rate of 20% per year), BW shall pay Van Houten an amount to be determined as
follows:
1. The unrealized gain on the number of shares vested
at the Termination Vesting Rate in excess of the number of shares vested at the
Plan Vesting Rate. Specifically, the payment shall be calculated as follows:
o No. of shares vested per the Termination Vesting Rate,
o Less no. of shares vested per the Plan Vesting Rate,
o Mutiplied by the difference between:
o The Fair Market Value per share, as
defined in paragraph 9 below, and
o The $8.656 per share Option exercise price.
The calculations are to be made as of the effective date of the termination, and
the payment shall be made to Van Houten within thirty days of that effective
date. Also, Van Houten would retain his right to exercise the Option for all
shares which were vested per the Plan Vesting Rate.
2. For example, if Van Houten's employment were
terminated on April 14, 2002, all 33,334 Option shares would be vested at the
Termination Vesting Rate, and 20,000 of the Option shares would be vested at the
Plan Vesting Rate. Assume a Fair Market Value of $16 per share. The Option price
is $8.656 per share. In this illustration, BW would be required to pay Van
Houten:
No. of shares vested per Termination Vesting Rate 33,334
Less no. of shares vested per the Plan Vesting Rate 20,000
--------
Difference 13,334
Fair Market Value per share $16.000
Option exercise price per share 8.656
--------
Unrealized gain per share $ 7.344
Payment amount: 13,334 shares X $7.344 per share = $97,925
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Van Houten would retain his vested right to exercise the Option for 20,000
shares, which would have an unrealized gain of $146,880. Van Houten's total gain
from the Option would be $97,925 + $146,880 = $244,805.
c. Payment upon Termination - On or After April 14, 2004. In
the event Van Houten's employment is terminated on or after April 14, 2004, Van
Houten shall be solely entitled to his right to exercise the option for the
33,334 shares which would be vested at that time.
d. Payment upon Termination due to Change in Control. In the
event a Change in Control of BW, as defined in section 10, shall occur and Van
Houten=s employment is terminated as a result of the Change in Control or after
that event, the Option shares shall be deemed to be 100% vested for purposes of
the Termination Vesting Rate.
9. Fair Market Value Defined. For purposes of this Agreement, "Fair
Market Value" shall be the mean of the high and low sales prices of the shares
of common stock of BWFC on the date in question (or, if such day is not a
trading day in the U.S. markets, on the nearest preceding trading day), as
reported with respect to the principal market (or the composite of the markets,
if more than one) or national quotation system in which such shares are then
traded, or if no such prices are reported, the mean between the closing high bid
and low ask prices of a share of common stock of BWFC on that day on the
principal market or national quotation system then in use, or if no such
quotations are available, the price furnished by a professional securities
dealer making a market in such shares selected by the Board of Directors of
BWFC, or if no such prices are available, the book value of a share of common
stock of BWFC as determined under generally accepted accounting principles as of
the latest practical date.
10. Change in Control Defined. For purposes of this Agreement, a
"Change in Control" of BW shall mean a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), or any successor to it, whether or not BW is registered under
the Exchange Act; provided that, without limitation, such a change in control
shall be deemed to have occurred if (i) any "person" (as such 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 BW representing 25% or more of the combined voting
power of BW's then outstanding securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the BW cease for any reason to constitute at least a
majority unless the election, or the nomination for election by stockholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
11. Acknowledgment of Confidential Information. Van Houten acknowledges
that during his employment with BW, he may acquire or be given access to or may
develop or assist in developing confidential information regarding the products,
property, business and affairs of BW, including information concerning BW's
customers. This confidential information may consist of concepts, ideas, trade
secrets, marketing and sales processes or techniques, pricing arrangements,
operating procedures, technical data, customer names, customer contact persons
and telephone numbers, loan originator names, broker names, investor names,
quotations or other confidential information not generally known or easily
ascertainable by the general public concerning BW's business. This information
is referred to in this Agreement simply as "Confidential Information".
12. Restriction on Confidential Information. Van Houten shall not,
during his employment with BW, use any Confidential Information outside of the
scope of his employment by BW. He shall not communicate or disclose orally or in
writing any of the Confidential Information to any person or entity, directly or
indirectly, under any circumstances outside the scope of his employment by BW.
Upon termination
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of his employment with BW, he shall promptly return to BW all written or other
tangible evidence of any Confidential Information and any memoranda with respect
to that evidence which is in his possession or under his control.
13. Non-Compete. Van Houten shall not, during his employment with BW,
directly or indirectly, for himself or for any other person, firm, corporation,
partnership, limited liability company or association, either as a partner,
principal, agent, employee, member, officer, director, material beneficial
owner, or in any other capacity, conduct or engage in, or become interested in,
either wholly or in part, any other financial institution or affiliate of it
without the consent of BW. For purposes of this paragraph, Van Houten shall be
deemed a material beneficial owner of an enterprise if Van Houten is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the company representing 10% or more of
the combined voting power of the company=s then outstanding securities.
14. Indemnification. BW shall indemnify and hold harmless Van Houten
from and against any and all liability and loss relating to Van Houten=s actions
during the Term of this Agreement, except for any liability or loss resulting
from the gross negligence of Van Houten and except as BW's ability to indemnify
may otherwise be limited by its articles of incorporation or bylaws or by the
Michigan Business Corporation Act, the Michigan Banking Code or the Michigan
Savings Bank Act.
15. Notices. All demands, notices and communications required by this
Agreement shall, unless otherwise specified by the terms of this Agreement, be
in writing and shall be deemed to be given (i) upon personal delivery to the
person to whom addressed (by messenger or delivery service), (ii) the day
following delivery to a nationally recognized overnight courier service, (iii)
three days following deposit in the U.S. mail, first class postage prepaid, or
(iv) upon transmission of any notice by telecopy (fax).
a. For BW, the notice shall be addressed to the following
(which address may be changed by written notice):
Bank West
Attention: Chief Financial Officer
0000 Xxxxx Xxxx Xxxx, XX
Xxxxx Xxxxxx, XX 00000-0000
With a copy to: Xxxx X. Xxxxxxx
Xxxxxxx Xxxxxx PLC
000 Xxxxxx Xxx. XX, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
b. For Van Houten, the notice shall be addressed to the
following (which address may be changed by written notice):
Xxxxxx X. Xxx Xxxxxx
0000 Xxxxxxxx XX
Xxxxx Xxxxxx, Xxxxxxxx 00000
16. Entire Agreement. This Agreement states the entire understanding
between the parties concerning the subject matter and supersedes and replaces
all prior agreements written or verbal between the parties concerning the
subject matter of the Agreement.
17. Attorneys' Fees And Costs. If any party commences an action against
the other party as a
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result of a breach or alleged breach of this Agreement, the prevailing party
shall be entitled to recover from the losing party its actual attorneys' fees
and costs of suit.
18. Assignment. In entering into this Agreement, BW is relying upon the business
reputation, experience and integrity of Van Houten. The Agreement may not be
assigned by Van Houten without BW's prior written consent, which consent may be
withheld arbitrarily and for any reason or no reason.
19. Good Faith. Each party shall exercise the utmost good faith in
performing the terms of this Agreement.
20. Remedies. The parties agree that if there is a breach of this
Agreement, the remedies at law will be inadequate and the non-breaching party
shall be entitled to seek redress by court proceedings in the form of an
injunction restraining the breaching party and/or providing for specific
performance without any bond or other security being required. The non-breaching
party shall also be entitled to such damages as that party may show by
appropriate evidence. Nothing in this Agreement shall be construed as preventing
the non- breaching party from pursuing, or seeking any damages at law or in
equity which it may have, and BW may, in any event, be entitled upon any breach
to terminate any payments remaining to be paid pursuant to the provisions of
this Agreement.
21. Regulatory Prohibition. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to Van Houten pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. ss.1828(k))
and the regulations promulgated thereunder, including 12 C.F.R. Part 359, and
any successor provisions to such statute or regulations.
22. Miscellaneous. This Agreement shall be construed in accordance with
the laws of the State of Michigan. It may not be amended except in writing,
signed by all parties. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, assigns, executors,
administrators and heirs, including any party that acquires stock or
substantially all of the stock or assets of BWFC or BW.
Bank West Financial Corporation,
a Michigan corporation
Dated: May 24, 1999 By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx
Its: Chairman
Bank West,
a Michigan savings bank
Dated: May 24,1999 By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx
Its: Chairman
Dated: May 24, 1999 /s/ Xxxxxx X. Xxx Xxxxxx
------------------------
Xxxxxx X. Xxx Xxxxxx
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