EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 30th day of December, 2002, between
Minden Building and Loan Association (the "Association") and A. Xxxxx Xxxxx (the
"Executive") (the "Agreement").
WITNESSETH
WHEREAS, the Executive is presently an officer of Minden Bancorp, Inc.
(the "Corporation") and the Association (together, the "Employers");
WHEREAS, the Association desires to be ensured of the Executive's active
participation in the business of the Employers;
WHEREAS, the Association has reorganized (the "Reorganization") into the
mutual holding company form whereby the Association has become the wholly owned
subsidiary of the Corporation which is a majority owned subsidiary of Minden
Mutual Holding Company (the "MHC"); and
WHEREAS, in order to induce the Executive to serve in the employ of the
Employers and in consideration of the Executive's agreeing to serve in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Association in the event that his
employment with the Association is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. Definitions. The following words and terms shall have the meanings set
forth below for the purposes of this Agreement:
(a) Annual Compensation. The Executive's "Annual Compensation" for
purposes of this Agreement shall be deemed to mean the highest level of
aggregate base salary and cash incentive compensation paid to the Executive by
the Employers or any subsidiary thereof during the calendar year in which the
Date of Termination occurs (determined on an annualized basis) or either of the
two calendar years immediately preceding the calendar year in which the Date of
Termination occurs.
(b) Base Salary. "Base Salary" shall have the meaning set forth in Section
3(a) hereof.
(c) Cause. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
(d) Change in Control of the Corporation. "Change in Control of the
Corporation" shall mean the occurrence of any of the following: (i) the
acquisition of control of the Corporation as defined in 12 C.F.R. ss.574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. ss.574.3(c)(vii), or any successor to such
sections; (ii) an event that would be required to be reported in response to
Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not any class of securities of the Corporation is
registered
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under the Exchange Act; (iii) 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 the Corporation representing 25% or more of the combined voting
power of the Corporation's then outstanding securities; or (iv) during any
period of three consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Corporation or the Association
cease for any reason to constitute at least a majority thereof 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; provided, however,
that no Change in Control of the Corporation will be deemed to have occurred in
the event the MHC undertakes a mutual to stock conversion.
(e) Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(g) Disability. Termination by the Association of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) Good Reason. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control of the Corporation based on:
(i) Without the Executive's express written consent, a material
reduction by the Association in the Executive's Base Salary as the
same may be increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a reduction in the package of
fringe benefits provided to the Executive, taken as a whole;
(ii) The principal executive office of either of the Employers is
relocated outside of Webster Parish, Louisiana or, without the
Executive's express written consent, either of the Employers require
the Executive to be based anywhere other than an area in which the
Employers' principal executive office is located, except for
required travel on business of the Employers to an extent
substantially consistent with the Executive's present business
travel obligations;
(iii) Any purported termination of the Executive's employment for
Disability or Retirement which is not effected pursuant to a Notice
of Termination satisfying the requirements of paragraph (j) below;
(iv) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as contemplated
in Section 10 hereof; or
(v) Without the Executive's express written consent, the failure to
elect or to re-elect or to appoint or to re-appoint the Executive to
the offices of President and Chief Executive Officer of the
Association or a material adverse change made by the Association in
the
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Executive's functions, duties or responsibilities as President and
Chief Executive Officer of the Association.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) Notice of Termination. Any purported termination of the Executive's
employment by the Association for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Association's termination of Executive's employment for Cause,
which shall be effective immediately; and (iv) is given in the manner specified
in Section 11 hereof.
(k) Retirement. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to their salaried employees.
2. Term of Employment.
(a) The Association hereby employs the Executive as President and Chief
Executive Officer, and the Executive hereby accepts said employment and agrees
to render such services to the Association on the terms and conditions set forth
in this Agreement. The term of this Agreement shall be a period of three years
commencing as of the date hereof (the "Commencement Date"), subject to earlier
termination as provided herein. Beginning on the day which is one year
subsequent to the Commencement Date, and on each annual anniversary thereafter,
the term of this Agreement shall be extended for a period of one year in
addition to the then-remaining term, provided that the Association has given
notice to the Executive in writing at least sixty (60) days prior to such day
that the term of the Agreement shall be extended further. Reference herein to
the term of this Agreement shall refer to both such initial term and such
extended terms. The Board of Directors of the Association shall review on a
periodic basis (and no less frequently than annually) whether to permit further
extensions of the term of this Agreement. As part of such review, the Board of
Directors shall consider all relevant factors, including the Executive's
performance hereunder, and shall either expressly approve further extensions of
the time of this Agreement or decide to provide notice to the contrary.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Association as may be consistent with his titles and
from time to time assigned to him by the Association's Board of Directors.
3. Compensation and Benefits.
(a) The Association shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $124,000
per year ("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Board of Directors of the Association and
may not be decreased without the Executive's express written consent. In
addition to his Base Salary, the Executive shall be entitled to receive during
the term of this Agreement such bonus payments as may be determined by the Board
of Directors of the Association.
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(b) During the term of this Agreement, the Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change in the rights of or
benefits to the Executive as compared with any other executive officer of the
Employers. Nothing paid to the Executive under any plan or arrangement presently
in effect or made available in the future shall be deemed to be in lieu of the
salary payable to the Executive pursuant to Section 3(a) hereof.
(c) During the term of this Agreement, the Executive shall be entitled to
paid annual vacation in accordance with the policies as established from time to
time by the Board of Directors of the Association. The Executive shall not be
entitled to receive any additional compensation from the Association for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Board of Directors of the Association. During the term of this Agreement, the
Employers shall provide the Executive with an automobile for Executive's use,
which automobile shall be comparable to that which is currently provided by the
Employer.
(d) In the event the Executive's employment is terminated due to
Disability or Retirement, the Association shall provide continued life, medical,
dental and disability coverage substantially identical to the coverage
maintained by the Employers for the Executive immediately prior to his
termination. Such coverage shall cease upon the expiration of the remaining term
of this Agreement.
4. Expenses. The Association shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Association, including,
but not by way of limitation, automobile expenses and other traveling expenses,
and all reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Board of
Directors of the Association. If such expenses are paid in the first instance by
the Executive, the Association shall reimburse the Executive therefor.
5. Termination.
(a) The Association shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and the Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by the
Association for Cause or (ii) the Executive terminates his employment hereunder
other than for Disability, Retirement, death, or Good Reason, the Executive
shall have no right pursuant to this Agreement to compensation or other benefits
for any period after the applicable Date of Termination.
(c) In the event that the Executive's employment is terminated as a result
of Disability, Retirement or the Executive's death during the term of this
Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination, except as provided for in Section 3(d) hereof.
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(d) In the event that (i) the Executive's employment is terminated by the
Association for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive due to a material
breach of this Agreement by the Association, which breach has not been cured
within twenty (20) days after a written notice of non-compliance has been given
by the Executive to the Association, then the Association shall, subject to the
provisions of Section 6 hereof, if applicable:
(1) pay to the Executive, in either twenty-four (24) equal monthly
installments beginning with the first business day of the month following
the Date of Termination or in a lump sum within five business days of the
Date of Termination (at the Executive's election), a cash severance amount
equal to two (2) times the Executive's Annual Compensation; and
(2) maintain and provide for a period ending at the earlier of (i)
the expiration of the remaining term of employment pursuant hereto prior
to the Notice of Termination or (ii) the date of the Executive's full-time
employment by another employer (provided that the Executive is entitled
under the terms of such employment to benefits substantially similar to
those described in this subparagraph (2)), at no cost to the Executive,
the Executive's continued participation in all group insurance, life
insurance, health and accident insurance, disability insurance and other
employee benefit plans, programs and arrangements offered by the
Association in which the Executive was entitled to participate immediately
prior to the Date of Termination (excluding (x) stock option and
restricted stock plans of the Employers, (y) bonuses and other items of
cash compensation included in Annual Compensation and (z) other benefits,
or portions thereof, included in Annual Compensation), provided that in
the event that the Executive's participation in any plan, program or
arrangement as provided in this subparagraph (2) is barred, or during such
period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Association shall arrange
to provide the Executive with benefits substantially similar to those
which the Executive was entitled to receive under such plans, programs and
arrangements immediately prior to the Date of Termination.
(e) In the event the Executive's employment is terminated for Good Reason
subsequent to a Change in Control of the Corporation, then the Association
shall, subject to the provisions of Section 6 hereof, if applicable:
(1) pay to the Executive, in either thirty-six (36) equal monthly
installments beginning with the first business day of the month following
the Date of Termination or in a lump sum within five business days of the
Date of Termination (at the Executive's election), a cash severance amount
equal to three (3) times the Executive's Annual Compensation; and
(2) maintain and provide for a period ending at the earlier of (i)
the expiration of the remaining term of employment pursuant hereto prior
to the Notice of Termination or (ii) the date of the Executive's full-time
employment by another employer (provided that the Executive is entitled
under the terms of such employment to benefits substantially similar to
those described in this subparagraph (2)), at no cost to the Executive,
the Executive's continued participation in all group insurance, life
insurance, health and accident insurance, disability insurance and other
employee benefit plans, programs and arrangements offered by the
Association in which the Executive was entitled to participate immediately
prior to the Date of Termination (excluding (x) stock option and
restricted stock plans of the Employers, (y) bonuses and other items of
cash compensation included in Annual Compensation and (z) other benefits,
or portions thereof, included in Annual Compensation), provided that in
the event that the Executive's participation in any plan, program or
arrangement as provided in this
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subparagraph (2) is barred, or during such period any such plan, program
or arrangement is discontinued or the benefits thereunder are materially
reduced, the Association shall arrange to provide the Executive with
benefits substantially similar to those which the Executive was entitled
to receive under such plans, programs and arrangements immediately prior
to the Date of Termination.
6. Limitation of Benefits under Certain Circumstances. If the payments and
benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Association, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits payable by the Association pursuant to Section 5
hereof shall be reduced, in the manner determined by the Executive, by the
amount, if any, which is the minimum necessary to result in no portion of the
payments and benefits payable by the Association under Section 5 being
non-deductible to the Association pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code. The
determination of any reduction in the payments and benefits to be made pursuant
to Section 5 shall be based upon the opinion of independent counsel selected by
the Association's independent public accountants and paid by the Association.
Such counsel shall be reasonably acceptable to the Association and the
Executive; shall promptly prepare the foregoing opinion, but in no event later
than thirty (30) days from the Date of Termination; and may use such actuaries
as such counsel deems necessary or advisable for the purpose. Nothing contained
herein shall result in a reduction of any payments or benefits to which the
Executive may be entitled upon termination of employment under any circumstances
other than as specified in this Section 6, or a reduction in the payments and
benefits specified in Section 5 below zero.
7. Covenant Not to Compete.
(a) Except as provided in section 7(b) hereof, the Executive hereby
covenants and agrees that, in the event of his termination of employment with
the Association for any reason prior to the expiration of the term of this
Agreement, for a period of two years following the date of his termination of
employment with the Association, he shall not, without the written consent of
the Association, 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 within Bienville, Bossier,
Caddo, Claiborne or Xxxxxxx Parishes, Louisiana.
(b) The Executive shall not be subject to the provisions of Section
7(a) if (i) the Executive is terminated by the Association for Cause and does
not receive any further compensation or benefits from the Association subsequent
to the applicable Date of Termination or (ii) the Executive's employment with
the Association is terminated by the Association or the Executive subsequent to
a change in control of the Corporation.
8. Mitigation; Exclusivity of Benefits.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Association pursuant to employee benefit
plans of the Association or otherwise.
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9. Withholding. All payments required to be made by the Association
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Association may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
10. Assignability. The Association may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
Association or other entity with or into which the Association may hereafter
merge or consolidate or to which the Association may transfer all or
substantially all of its assets, if in any such case said corporation,
Association or other entity shall by operation of law or expressly in writing
assume all obligations of the Association hereunder as fully as if it had been
originally made a party hereto, but may not otherwise assign this Agreement or
its rights and obligations hereunder. The Executive may not assign or transfer
this Agreement or any rights or obligations hereunder.
11. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Board of Directors
Minden Building and Loan Association
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
To the Executive: A. Xxxxx Xxxxx
0000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxx 00000
12. Amendment; Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Association to sign on
its behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
13. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of
Louisiana.
14. Nature of Obligations. Nothing contained herein shall create or
require the Association to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Association hereunder, such right shall be no
greater than the right of any unsecured general creditor of the Association.
15. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
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17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Regulatory Prohibition. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive 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.
19. Regulatory Actions. The following provisions shall be applicable to
the parties to the extent that they are required to be included in employment
agreements between a savings association and its employees pursuant to Section
563.39(b) of the Regulations Applicable to All Savings Associations, 12 C.F.R.
ss.563.39(b), or any successor thereto, and shall be controlling in the event of
a conflict with any other provision of this Agreement, including without
limitation Section 5 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers' affairs pursuant
to notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. ss.ss.1818(e)(3) and 1818(g)(1)), the
Employers' 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 Employers may, in their discretion: (i) pay the Executive all
or part of the compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
(b) If the Executive is removed from office and/or permanently prohibited
from participating in the conduct of the Employers' affairs by an order issued
under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. ss.ss.1818(e)(4)
and (g)(1)), all obligations of the Employers under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
Executive and the Employers as of the date of termination shall not be affected.
(c) If the Association is in default, as defined in Section 3(x)(1) of the
FDIA (12 U.S.C. ss.1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the Executive and the
Employers as of the date of termination shall not be affected.
(d) All obligations under this Agreement shall be terminated pursuant to
12 C.F.R. ss.563.39(b)(5) (except to the extent that it is determined that
continuation of the Agreement for the continued operation of the Employers is
necessary): (i) by the Director of the Office of Thrift Supervision ("OTS"), or
his/her designee, at the time the Federal Deposit Insurance Corporation ("FDIC")
enters into an agreement to provide assistance to or on behalf of the
Association under the authority contained in Section 13(c) of the FDIA (12
U.S.C. ss.1823(c)); or (ii) by the Director of the OTS, or his/her designee, at
the time the Director or his/her designee approves a supervisory merger to
resolve problems related to operation of the Association or when the Association
is determined by the Director of the OTS to be in an unsafe or unsound
condition, but vested rights of the Executive and the Employers as of the date
of termination shall not be affected.
20. Payment of Costs and Legal Fees and Reinstatement of Benefits. In the
event any dispute or controversy arising under or in connection with the
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the Executive shall be entitled to the
payment of (a) all legal fees incurred by the Executive in resolving such
dispute or controversy, and (2) any back-pay, including Base Salary, bonuses and
any other cash compensation, fringe benefits and any compensation and benefits
due to the Executive under this Agreement.
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21. Entire Agreement. This Agreement embodies the entire agreement between
the Association and the Executive with respect to the matters agreed to herein.
Effective upon the Commencement Date, any and all prior agreements between the
Association and the Executive with respect to the matters agreed to herein are
hereby superseded and shall have no force or effect.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
Attest: MINDEN BUILDING AND LOAN
ASSOCIATION
By: /s/ Xx. X. Xxxx Xxxx, Jr.
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Xx. X. Xxxx Xxxx, Jr., Director
EXECUTIVE
By: /s/ A. Xxxxx Xxxxx
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A. Xxxxx Xxxxx
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