Exhibit 10.1
AGREEMENT
AGREEMENT, dated this ______ day of __________ 1998, between Citizens
Financial Services, FSB (the "Bank"), a federally chartered savings bank, and
_________ (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of CFS Bancorp, Inc.
(the "Corporation") and the Bank (together, the "Employers");
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers;
WHEREAS, the Corporation and the Bank desire to enter into separate
agreements with the Executive with respect to his employment by each of the
Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Bank in the event that his employment
with the Bank 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) Average Annual Compensation. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employers or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination and which was either (i) included in the Executive's gross income
for tax purposes, including but not limited to Base Salary, bonuses and amounts
taxable to the Executive under any qualified or non-qualified employee benefit
plans of the Employers, or (ii) deferred at the election of the Executive.
(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
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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. Section 574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. Section 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 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 20% 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 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.
(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 Bank 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 within
twenty-four (24) months following a Change in Control of the Corporation based
on:
(i) 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 Chairman
and Chief Executive Officer of the Employers or a
material adverse change made by the Employers in the
Executive's
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functions, duties or responsibilities as Chairman and
Chief Executive Officer of the Employers;
(ii) Without the Executive's express written consent, a
reduction by either of the Employers 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;
(iii) The principal executive office of either of the
Employers is relocated outside of the Munster,
Indiana area 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;
(iv) 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;
or
(v) The failure by the Bank to obtain the assumption of
and agreement to perform this Agreement by any
successor as contemplated in Section 9 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) Notice of Termination. Any purported termination of the Executive's
employment by the Bank 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 Bank's termination of Executive's employment for Cause, which
shall be effective immediately; and (iv) is given in the manner specified in
Section 10 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.
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2. Term of Employment.
(a) The Bank hereby employs the Executive as Chairman and Chief
Executive Officer, and the Executive hereby accepts said employment and agrees
to render such services to the Bank 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 following the Commencement
Date, and on each day thereafter, the term of this Agreement shall be extended
for a period of one day in addition to the then-remaining term, provided that
the Bank has not given notice to the Executive in writing at least 60 days prior
to such day that the term of the Agreement shall not 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 Bank 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 Bank as may be consistent with his titles and from
time to time assigned to him by the Bank's Board of Directors.
3. Compensation and Benefits.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $________
per year ("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Boards of Directors of the Employers 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 Boards of
Directors of the Employers.
(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 Bank 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 Bank 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
Bank. 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.
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(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 Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers 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
Boards of Directors of the Employers.
(d) In the event the Executive's employment is terminated due to
Disability or Retirement, the Employers 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.
(e) In the event of the Executive's death during the term of this
Agreement, the Employers shall provide to the Executive's spouse continued
medical and dental coverage substantially identical to the coverage maintained
by the Employers for the Executive immediately prior to his death until such
spouse attains the age of 65.
(f) The Executive's compensation, benefits and expenses shall be paid
by the Corporation and the Bank in the same proportion as the time and services
actually expended by the Executive on behalf of each respective Employer.
4. Expenses. The Employers 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 Employers, 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 Boards of
Directors of the Employers. If such expenses are paid in the first instance by
the Executive, the Employers shall reimburse the Executive therefor.
5. Termination.
(a) The Bank 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 Bank 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.
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(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 Sections 3(d) and 3(e) hereof.
(d) In the event that (i) the Executive's employment is terminated by
the Bank for other than Cause, Disability, Retirement or the Executive's death
or (ii) such employment is terminated by the Executive (a) due to a material
breach of this Agreement by the Bank, which breach has not been cured within
fifteen (15) days after a written notice of non-compliance has been given by the
Executive to the Employers, or (b) for Good Reason, then the Bank shall, subject
to the provisions of Section 6 hereof, if applicable
(A) 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 that portion of the
Executive's Average Annual Compensation paid by the Bank, and
(B) 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 (B)), 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 Bank 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 Average Annual
Compensation and (z) other benefits, or portions thereof, included in
Average Annual Compensation), provided that in the event that the
Executive's participation in any plan, program or arrangement as
provided in this subparagraph (B) is barred, or during such period any
such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Bank 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
Bank, would constitute a "parachute payment" under Section 280G of the Code, the
payments and benefits payable by the Bank pursuant to Section 5 hereof shall be
reduced, in the manner determined by
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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 Bank under Section 5
being non-deductible to the Bank pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code. The parties
hereto agree that the present value of the payments and benefits payable
pursuant to this Agreement to the Executive upon termination shall be limited to
three times the Executive's Average Annual Compensation. 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 Bank's
independent public accountants and paid by the Bank. Such counsel shall be
reasonably acceptable to the Bank 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. 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 Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. Withholding. All payments required to be made by the Bank hereunder
to the Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation.
9. Assignability. The Bank may assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Bank may hereafter merge or consolidate or
to which the Bank may transfer all or substantially all of its assets, if in any
such case said corporation, bank or other entity shall by operation of law or
expressly in writing assume all obligations of the Bank 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.
10. 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
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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 Bank: Secretary
Citizens Financial Savings, Inc.
000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
To the Corporation: Secretary
CFS Bancorp, Inc.
000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
To the Executive: [Name]
[home address]
11. 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 Bank 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.
12. 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 Indiana.
13. Nature of Obligations. Nothing contained herein shall create or
require the Bank 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 Bank hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Bank.
14. 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.
15. 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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16. 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.
17. 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.
Section 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. Sections 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.
Sections 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 Bank is in default, as defined in Section 3(x)(1) of the
FDIA (12 U.S.C. Section 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. Section 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
Bank under the authority contained in Section 13(c) of the FDIA (12 U.S.C.
Section 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 Bank or when the Bank 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.
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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. Section
1828(k)) and the regulations promulgated thereunder, including 12 C.F.R. Part
359. In the event of the Executive's termination of employment with the Bank for
Cause, all employment relationships and managerial duties with the Bank shall
immediately cease regardless of whether the Executive remains in the employ of
the Corporation following such termination. Furthermore, following such
termination for Cause, the Executive will not, directly or indirectly, influence
or participate in the affairs or the operations of the Bank.
19. 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.
20. Entire Agreement. This Agreement embodies the entire agreement
between the Bank and the Executive with respect to the matters agreed to herein.
All prior agreements between the Bank and the Executive with respect to the
matters agreed to herein are hereby superseded and shall have no force or
effect. Notwithstanding the foregoing, nothing contained in this Agreement shall
affect the agreement of even date being entered into between the Corporation and
the Executive.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: CITIZENS FINANCIAL SERVICES, FSB
By:
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, Director
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EXECUTIVE
By:
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