CHANGE OF CONTROL AGREEMENT
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This Change of Control Agreement (this "Agreement"), is made and entered
into as of the ______ day of ________________, 1996, (the "Effective Date") by
and between FIRSTFED BANCSHARES, INC., a Delaware corporation (the "Employer"),
and ____________________________ (the "Executive").
RECITALS
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A. The Executive is currently serving as the ______________________ of
First Federal Bank for Savings (the "Bank").
B. The Employer owns all of the issued and outstanding capital stock of
the Bank.
C. The Employer desires to continue to employ the Executive as an officer
of the Employer and the Executive is willing to continue such employment.
D. In addition, the Employer recognizes that circumstances may arise in
which a change of control of the Employer through acquisition or otherwise may
occur thereby causing uncertainty of employment without regard to the competence
or past contributions of the Executive, which uncertainty may result in the loss
of valuable services of the Executive, and the Employer and the Executive wish
to provide reasonable security to the Executive against changes in the
employment relationship in the event of any such change of control.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter contained, it is covenanted and agreed by and between the
parties hereto as follows:
AGREEMENTS
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1. TERM AND TERMINATION.
(a) BASIC TERM. The term of this Agreement shall be for two (2)
years commencing as of the Effective Date, and shall, upon the favorable review
of the performance of the Executive by the Board of Directors of the Employer,
automatically extend for one (1) additional year commencing on each anniversary
of the Effective Date. This Agreement may be terminated by either party
effective as of the last day of the then current one (1) year period by written
notice to that effect delivered to the other not less than ninety (90) days
prior to the anniversary of such Effective Date.
(b) TERMINATION UPON CHANGE OF CONTROL.
(i) In the event of a Change in Control (as defined below) of
the Employer and the termination of the Executive's employment under either
A or B below, the Executive shall be entitled to a lump sum payment equal
to his annual base salary at the time of such termination. The Employer
shall also continue to provide coverage for the Executive under the Bank
health insurance program for one (1) year following such termination. The
following shall constitute termination under this paragraph:
A. The Executive terminates his employment by a written notice to
that effect delivered to the Board within one hundred and eighty
(180) days after the Change in Control.
B. The employment of the Executive is terminated by the Employer or
its successor either in contemplation of or within one (1) year
after the Change in Control.
(ii) For purposes of this paragraph, the term "Change in
Control" shall mean the following:
A. The consummation of the acquisition by any person (as such term
is defined in Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx)
of thirty-three percent (33%) or more of the combined voting
power of the then outstanding voting securities; or
B. The individuals who, as of the date hereof, are members of the
Board cease for any reason to constitute a majority of the Board,
unless the election, or nomination for election by the
stockholders, of any new director was approved by a vote of a
majority of the Board, and such new director shall, for purposes
of this Agreement, be considered as a member of the Board; or
C. Approval by stockholders of: (1) a merger or consolidation if
the stockholders immediately before such merger or consolidation
do not, as a result of such merger or consolidation, own,
directly or indirectly, more than sixty-seven percent (67%) of
the combined voting power of the then outstanding voting
securities of the entity resulting from such merger or
consolidation in substantially the same proportion as their
ownership of the combined voting power of the voting securities
outstanding immediately before such merger or consolidation; or
(2) a complete liquidation or dissolution or an agreement for the
sale or other disposition of all or substantially all of the
assets of the entity.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because thirty-three percent (33%) or more of the combined
voting power of the then outstanding securities is acquired by: (1) a
trustee or other fiduciary holding securities under one or more employee
benefit plans maintained for employees of the entity; or (2) any
corporation which, immediately prior to such acquisition, is owned directly
or indirectly by the stockholders in the same proportion as their ownership
of stock immediately prior to such acquisition.
(c) REGULATORY SUSPENSION AND TERMINATION.
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(i) If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the
Employer's affairs by a notice served under Section 8(e)(3) (12 U.S.C.
Section 1818(e)(3)) or 8(g) (12 U.S.C. Section 1818(g)) of the Federal
Deposit Insurance Act, as amended, the Employer's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed,
the Employer may in its discretion (A) pay the Executive all or part of
the compensation withheld while their Agreement obligations were suspended
and (B) reinstate (in whole or in part) any of the obligations which were
suspended.
(ii) If the Executive is removed and/or permanently prohibited
from participating in the conduct of the Employer's affairs by an order
issued under Section 8(e) (12 U.S.C. Section 1818(e)) or 8(g) (12 U.S.C.
Section 1818(g)) of the Federal Deposit Insurance Act, as amended, all
obligations of the Employer under this Agreement shall terminate as of the
effective date of the order, but vested rights of the contracting parties
shall not be affected.
(iii) If the Employer is in default as defined in Section 3(x)
(12 U.S.C. Section 1813(x)(1)) of the Federal Deposit Insurance Act, as
amended, all obligations of the Employer under this Agreement shall
terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.
(iv) All obligations of the Employer under this Agreement
shall be terminated, except to the extent determined that continuation
of this Agreement is necessary for the continued operation of the
institution by the Federal Deposit Insurance Corporation (the "FDIC"), at
the time the FDIC enters into an agreement to provide assistance to or on
behalf of the Employer under the authority contained in Section 13(c)
(12 U.S.C. Section 1823(c)) of the Federal Deposit Insurance Act, as
amended, or when the Employer is determined by the 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.
(v) Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) (12 U.S.C. Section 1828(k)) of the Federal
Deposit Insurance Act, as amended, and any regulations promulgated
thereunder.
2. WITHHOLDING. The Employer shall be entitled to withhold from amounts
payable to the Executive hereunder, any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold. The
Employer shall be entitled to rely upon the opinion of its legal counsel with
regard to any question concerning the amount or requirement of any such
withholding.
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3. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily
transferred to an affiliate of the Employer, such transfer shall not be deemed
to terminate or modify this Agreement and the employing corporation to which the
Executive shall have been transferred shall, for all purposes of this Agreement,
be construed as standing in the same place and stead as the Employer as of the
date of such transfer. For purposes hereof, an affiliate of the Employer shall
mean any corporation directly or indirectly controlling, controlled by, or under
common control with the Employer.
4. INTEREST IN ASSETS. Neither the Executive nor his estate shall
acquire hereunder any rights in funds or assets of the Employer, otherwise than
by and through the actual payment of amounts payable hereunder; nor shall the
Executive or his estate have any power to transfer, assign, anticipate,
hypothecate or otherwise encumber in advance any of said payments; nor shall any
of such payments be subject to seizure for the payment of any debt, judgment,
alimony, separate maintenance or be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise of the Executive.
5. NOT AN EMPLOYMENT AGREEMENT. Nothing in this Agreement shall give the
Executive any rights (or impose any obligations) to continued employment by the
Employer or successor of the Employer, nor shall it give the Employer any rights
(or impose any obligations) for the continued performance of duties by the
Executive for the Employer or successor of the Employer.
6. GENERAL PROVISIONS.
(a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Executive, the Employer and his and its respective
personal representatives, successors and assigns, and any successor or assign of
the Employer shall be deemed the "Employer" hereunder. The Employer shall
require any successor to all or substantially all of the business and/or assets
of the Employer, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the Employer
would be required to perform if no such succession had taken place.
(b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire agreement between the parties respecting the employment of the Executive,
and supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. Except as otherwise explicitly
provided herein, this Agreement may not be amended or modified except by written
agreement signed by the Executive and the Employer.
(c) ENFORCEMENT AND GOVERNING LAW. The provisions of this Agreement
shall be regarded as divisible and separate; if any of said provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the state of
Illinois without reference to the law regarding conflicts of law.
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(d) 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 sitting in a location selected by
the Executive within fifty (50) miles from the location of the Employer, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
(e) LEGAL FEES. All reasonable legal fees paid or incurred by the
prevailing party pursuant to any dispute or question of interpretation relating
to this Agreement shall be paid or reimbursed by the losing party if the
prevailing party is successful on the merits pursuant to a legal judgment,
arbitration or settlement.
(f) WAIVER. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party, shall be deemed a waiver of any
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
(g) NOTICES. Notices pursuant to this Agreement shall be in writing
and shall be deemed given when received; and, if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid; and if to the Employer, addressed to the principal headquarters of the
Employer, attention: Chairman; or, if to the Executive, to the address set
forth below the Executive's signature on this Agreement, or to such other
address as the party to be notified shall have given to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
FIRSTFED BANCSHARES, INC. EXECUTIVE
_________________________________ ________________________________
Xxxxx X. Xxxxxx, President ________________________________
________________________________
(Address)
FIRST FEDERAL BANK FOR SAVINGS
_________________________________
Xxxxx X. Xxxxxx, President
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