TEMPO BANK EMPLOYMENT AGREEMENT
Exhibit 10.3
TEMPO
BANK
THIS AGREEMENT (the
“Agreement”), originally made this 13th day of
April, 2007, by and between TEMPO BANK, a federally
chartered savings bank (the “Bank”), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(“Executive”), is amended and restated in its entirety effective November 18,
2008.
WHEREAS, Executive continues
to serve in a position of substantial responsibility; and
WHEREAS, the Bank wishes to
assure Executive’s continued services for the term of this Agreement;
and
WHEREAS, Executive is willing
to continue to serve in the employ of the Bank during the term of this
Agreement; and
WHEREAS, the parties desire to
amend and restate the Agreement in order to bring it into compliance with
Section 409A of the Internal Revenue Code.
NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement, and upon the
other terms and conditions provided for in this Agreement, the parties hereby
agree as follows:
1. Employment. The Bank will
employ Executive as President and Chief Operating Officer. Executive
will perform all duties and shall have all powers commonly incident to his
position, or which, consistent with his position, the Board of Directors of the
Bank (the “Board”) delegates to Executive. Executive also agrees to
serve, if elected, as an officer and/or director of any subsidiary or affiliate
of the Bank and to carry out the duties and responsibilities reasonably
appropriate to those offices.
2. Location
and Facilities. The Bank will
furnish Executive with the working facilities and staff customary for executive
officers with the titles and duties set forth in Section 1 and as are necessary
for him to perform his duties. The location of such facilities and
staff shall be at the principal administrative offices of the Bank, or at such
other site or sites customary for such offices.
3. Term.
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a.
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The
term of this Agreement shall include: (i) the initial term, consisting of
the period commencing on the original date of this Agreement (the
“Effective Date”) and ending on the third anniversary of the Effective
Date, plus (ii) any and all extensions of the initial term made pursuant
to this Section 3 (upon execution of this amended and restated Agreement,
the term of the Agreement will extend through April 13, 2011, subject to
further extensions made pursuant to this Section
3).
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b.
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Commencing
on the first anniversary of the Effective Date and continuing on each
anniversary of the Effective Date thereafter, the disinterested members of
the Board may extend the Agreement term for an additional year, so that
the remaining term of the Agreement again becomes thirty-six (36) months,
unless Executive elects not to extend the term of this Agreement by giving
written notice in accordance with Section 18 of this
Agreement. The Board will review the Agreement and Executive’s
performance annually for purposes of determining whether to extend the
Agreement term and will include the rationale and results of its review in
the minutes of its meeting. The Board will notify Executive as
soon as possible after its annual review whether it has determined to
extend the Agreement.
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4. Base
Compensation.
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a.
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For
his services as President and Chief Operating Officer, the Bank agrees to
pay Executive an annual base salary at the rate of $97,850 per year,
payable in accordance with customary payroll
practices.
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b.
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During
the term of this Agreement, the Board will review the level of Executive’s
base salary at least annually, based upon factors deemed relevant, in
order to determine Executive’s base salary through the remaining term of
the Agreement.
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5. Bonuses. Executive will
participate in discretionary bonuses or other incentive compensation programs
that the Bank may sponsor for or award from time to time to senior management
employees.
6. Benefit
Plans. Executive will
participate in life insurance, medical, dental, pension, profit sharing,
retirement and stock-based compensation plans and other programs and
arrangements that the Bank may sponsor or maintain for the benefit of its
employees.
7. Vacations and
Leave.
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a.
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Executive
may take vacations and other leave in accordance with the Bank’s policy
for senior executives, or otherwise as approved by the
Board.
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b.
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In
addition to paid vacations and other leave, the Board may grant Executive
a leave or leaves of absence, with or without pay, at such time or times
and upon such terms and conditions as the Board, in its discretion, may
determine.
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8. Expense
Payments and Reimbursements. The Bank will
reimburse Executive for all reasonable out-of-pocket business expenses incurred
in connection with his services under this Agreement upon substantiation of such
expenses in accordance with applicable policies of the Bank.
9. Loyalty and
Confidentiality.
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a.
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During
the term of this Agreement, Executive will devote all his business time,
attention, skill, and efforts to the faithful performance of his duties
under this Agreement; provided, however, that from time to time, Executive
may serve on the boards of directors of, and hold any other offices or
positions in, companies or organizations that will not present any
conflict of interest with the Bank or any of its subsidiaries or
affiliates, unfavorably affect the performance of Executive’s duties
pursuant to this Agreement, or violate any applicable statute or
regulation. Executive will not engage in any business or
activity contrary to the business affairs or interests of the Bank or any
of its subsidiaries or affiliates.
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b.
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Nothing
contained in this Agreement will prevent or limit Executive’s right to
invest in the capital stock or other securities or interests of any
business dissimilar from that of the Bank, or, solely as a passive,
minority investor, in any business.
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c.
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Executive
agrees to maintain the confidentiality of any and all information
concerning the operations or financial status of the Bank; the names or
addresses of any of its borrowers, depositors and other customers; any
information concerning or obtained from such customers; and any other
information concerning the Bank or its subsidiaries or affiliates to which
he may be exposed during the course of his
employment. Executive further agrees that, unless required by
law or specifically permitted by the Board in writing, he will not
disclose to any person or entity, either during or subsequent to his
employment, any of the above-mentioned information which is not generally
known to the public, nor will he use the information in any way other than
for the benefit of the Bank.
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10. Termination
and Termination Pay. Subject to
Section 11 of this Agreement, Executive’s employment under this Agreement may be
terminated in the following circumstances:
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a.
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Death. Executive’s
employment under this Agreement will terminate upon his death during the
term of this Agreement, in which event Executive’s estate will receive the
compensation due to Executive through the last day of the calendar month
in which his death occurred.
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b.
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Retirement. This
Agreement will terminate upon Executive’s retirement under the retirement
benefit plan or plans in which he participates pursuant to Section 6 of
this Agreement or otherwise.
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c. Disability.
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i.
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The
Board or Executive may terminate Executive’s employment after having
determined Executive has a Disability. For purposes of this
Agreement, “Disability” means a physical or mental infirmity that impairs
Executive’s ability to substantially perform his duties under this
Agreement and results in Executive becoming eligible for long-term
disability benefits under any long-term disability plans of the Bank (or,
if no such plans exist, that impairs Executive’s ability to substantially
perform his duties under this Agreement for a period of one hundred eighty
(180) consecutive days). The Board will determine whether or
not Executive is and continues to be permanently disabled for purposes of
this Agreement in good faith, based upon competent medical advice and
other factors that the Board reasonably believes to be
relevant. As a condition to any benefits, the Board may require
Executive to submit to physical or mental evaluations and tests as the
Board or its medical experts deem reasonably
appropriate.
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ii.
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In
the event of his Disability, Executive will no longer be obligated to
perform services under this Agreement. The Bank will pay
Executive, as Disability pay, an amount equal to one hundred percent
(100%) of Executive’s rate of base salary in effect as of the date of his
termination of employment due to Disability. The Bank will make Disability
payments on a monthly basis commencing on the first day of the month
following the effective date of Executive’s termination of employment due
to Disability and ending on the earlier of: (A) the date he returns to
full-time employment at the Bank in the same capacity as he was employed
prior to his termination for Disability; (B) his death; (C) his attainment
of age 65 or (D) the date this Agreement would have expired had
Executive’s employment not terminated by reason of Disability. The Bank
will reduce Disability payments by the amount of any short- or long-term
disability benefits payable to Executive under any other disability
programs sponsored by the Bank. In addition, during any period
of Executive’s Disability, the Bank will continue to provide Executive and
his dependents, to the greatest extent possible, with continued coverage
under all benefit plans (including, without limitation, retirement plans
and medical, dental and life insurance plans) in which Executive and/or
his dependents participated prior to his Disability on the same terms as
if he remained actively employed by the
Bank.
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d. Termination for
Cause.
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i.
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The
Board may, by written notice to Executive in the form and manner specified
in this paragraph, immediately terminate his employment at any time for
“Cause.” Executive shall have no right to receive compensation
or other benefits for any period after termination for Cause, except for
already vested benefits. Termination for Cause shall mean
termination because of, in the good faith determination of the Board,
Executive’s:
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(1)
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Personal
dishonesty;
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(2)
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Incompetence;
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(3)
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Willful
misconduct;
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(4)
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Breach
of fiduciary duty involving personal
profit;
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(5)
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Intentional
failure to perform stated duties;
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(6)
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Willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order;
or
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(7)
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Material
breach of any provision of this
Agreement.
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ii.
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Notwithstanding
the foregoing, Executive’s termination for Cause will not become effective
unless the Bank has delivered to Executive a copy of a resolution duly
adopted by the affirmative vote of a majority of the entire membership of
the Board, at a meeting of the Board called and held for the purpose of
finding that, in the good faith opinion of the Board (after reasonable
notice to Executive and an opportunity for Executive to be heard before
the Board with counsel), Executive engaged in the conduct described above
and specifying the particulars of this
conduct.
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e.
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Voluntary Termination
by Executive. In addition to his other rights to
terminate under this Agreement, Executive may voluntarily terminate
employment during the term of this Agreement upon at least sixty (60) days
prior written notice to the Board. Upon Executive’s voluntary termination,
he will receive only his compensation and vested rights and benefits
through the date of his termination. Following his voluntary
termination of employment under this Section 10(e), Executive will be
subject to the restrictions set forth in Section 10(g) of this Agreement
for a period of one (1) year from his termination
date.
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f.
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Without Cause or With
Good Reason.
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i.
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In
addition to termination pursuant to Sections 10(a) through 10(e), the
Board may, by written notice to Executive, immediately terminate his
employment at any time for a reason other than Cause (a termination
“Without Cause”) and Executive may, by written notice to the
Board, terminate his employment under this Agreement for “Good Reason,” as
defined below (a termination “With Good
Reason”).
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ii.
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Subject
to Section 11 of this Agreement, in the event of termination under this
Section 10(f), Executive will receive his base salary as of his
termination date for the remaining term of the Agreement, with such amount
paid in one lump sum within ten (10) calendar days of his
termination. Executive will also continue to participate in any
benefit plans of the Bank that provide medical, dental and life insurance
coverage for the remaining term of the Agreement, under terms and
conditions no less favorable than the most favorable terms and conditions
provided to senior executives of the Bank during the same
period. If the Bank cannot provide such coverage because
Executive is no longer an employee, the Bank will provide Executive with
comparable coverage on an individual policy basis or the cash
equivalent.
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iii.
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For
the purposes of this Agreement, “Good Reason” shall mean the occurrence of
any of the following:
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(1)
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The
assignment to Executive of duties that constitute a material diminution of
his authority, duties, or responsibilities (including reporting
requirements);
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(2)
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A
material diminution in Executive’s Base
Salary;
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(3)
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Relocation
of Executive to a location outside a radius of 35 miles of the Bank’s
Trenton, Illinois office; or
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(4)
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Any
other action or inaction by the Bank that constitutes a material breach of
this Agreement;
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provided,
that within ninety (90) days after the initial existence of such event, the Bank
shall be given notice and an opportunity, not less than thirty (30) days, to
effectuate a cure for such asserted “Good Reason” by
Executive. Executive’s resignation hereunder for Good Reason shall
not occur later than one hundred fifty (150) days following the initial date on
which the event Executive claims constitutes Good Reason occurred.
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g.
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Continuing Covenant
Not to Compete or Interfere with
Relationships. Regardless of anything herein to the
contrary, following a termination by the Bank or Executive pursuant to
Section 10(e) or 10(f):
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i.
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Executive’s
obligations under Section 9(c) of this Agreement will continue in effect;
and
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ii.
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During
the period ending on the first anniversary of such termination, Executive
will not serve as an officer, director or employee of any bank holding
company, bank, savings association, savings and loan holding company,
mortgage company or other financial institution that offers products or
services competing with those offered by the Bank from any office within
thirty-five (35) miles from the main office or any branch of the Bank and, further,
Executive will not interfere with the relationship of the Bank, its
subsidiaries or affiliates and any of their employees, agents, or
representatives.
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h.
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To
the extent Executive is a member of the Board on the date of termination
of employment with the Bank, Executive will resign from the Board
immediately following such termination of employment with the
Bank. Executive will be obligated to tender this resignation
regardless of the method or manner of termination, and such resignation
will not be conditioned upon any event or
payment.
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11. Termination in Connection
with a Change in Control.
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a.
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For
purposes of this Agreement, a “Change in Control” means any of the
following events:
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i.
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Merger: Sugar
Creek Financial Corp. (the “Company”) merges into or consolidates with
another entity, or merges another corporation into the Company, and as a
result, less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by
persons who were stockholders of the Company immediately before the merger
or consolidation;
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ii.
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Acquisition of
Significant Share Ownership: There is filed, or is
required to be filed, a report on Schedule 13D or another form or schedule
(other than Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended, if the schedule discloses
that the filing person or persons acting in concert has or have become the
beneficial owner of 25% or more of a class of the Company’s voting
securities, but this clause (ii) shall not apply to beneficial ownership
of Company voting shares held in a fiduciary capacity by an entity of
which the Company directly or indirectly beneficially owns 50% or more of
its outstanding voting securities;
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iii.
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Change in Board
Composition: During any period of two consecutive years,
individuals who constitute the Company’s Board of Directors at the
beginning of the two-year period cease for any reason to constitute at
least a majority of the Company’s Board of Directors; provided, however,
that for purposes of this clause (iii), each director who is first elected
by the board (or first nominated by the board for election by the members)
by a vote of at least two-thirds (2/3) of the directors who were directors
at the beginning of the two-year period shall be deemed to have also been
a director at the beginning of such period;
or
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iv.
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Sale of
Assets: The Company or the Bank sells to a third party
all or substantially all of its
assets.
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Notwithstanding
anything in this Agreement to the contrary, in no event shall the
conversion of the Bank’s mutual holding company parent, Sugar Creek MHC,
from mutual to stock form, i.e., a “second step conversion,” constitute a
“Change in Control” for purposes of this
Agreement.
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b.
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Termination. If
within the period ending one year after a Change in Control, (i) the Bank
terminates Executive’s employment without Cause, or (ii) Executive
voluntarily terminates his employment With Good Reason, the Bank will,
within ten calendar days of the termination of Executive’s employment,
make a lump-sum cash payment to him equal to three times Executive’s
average taxable compensation (as reported on Form W-2) over the five (5)
most recently completed calendar years (or years of employment, annualized
for partial years of employment, if less than five), ending with the year
immediately preceding the effective date of the Change in Control. The
cash payment made under this Section 11(b) shall be made in lieu of any
payment also required under Section 10(f) of this Agreement because of
Executive’s termination of employment; however, Executive’s rights under
Section 10(f) are not otherwise affected by this Section 11. Following
termination of employment, executive will also continue to participate in
any benefit plans of the Bank that provide medical, dental and life
insurance coverage upon terms no less favorable than the most favorable
terms provided to senior executives. If the Bank cannot provide
such coverage because Executive is no longer an employee, the Bank will
provide Executive with comparable coverage on an individual basis or the
cash equivalent. The medical, dental and life insurance
coverage provided under this Section 11(b) shall cease upon the earlier
of: (i) Executive’s death; (ii) Executive’s employment by
another employer other than one of which he is the majority owner; or
(iii) thirty-six (36) months after his termination of
employment.
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c.
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The
provisions of Section 11 and Sections 13 through 25, including the defined
terms used in such sections, shall continue in effect until the later of
the expiration of this Agreement or one year following a Change in
Control.
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12. Indemnification and
Liability Insurance.
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a.
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Indemnification. The
Bank agrees to indemnify Executive (and his heirs, executors, and
administrators), and to advance expenses related to this indemnification,
to the fullest extent permitted under applicable law and regulations
against any and all expenses and liabilities that Executive reasonably
incurs in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his service as an
officer or director of the Bank or any of its subsidiaries or affiliates
(whether or not he continues to be an officer or director at the time of
incurring any such expenses or liabilities). Covered expenses
and liabilities include, but are not limited to, judgments, court costs,
and attorneys’ fees and the costs of reasonable settlements, subject to
Board approval, if the action is brought against Executive in his capacity
as an officer or director of the Bank or any of its subsidiaries.
Indemnification for expenses will not extend to matters related to
Executive’s termination for Cause. Notwithstanding anything in
this Section 12(a) to the contrary, the Bank will not be required to
provide indemnification prohibited by applicable law or
regulation. The obligations of this Section 12 will survive the
term of this Agreement by a period of six (6)
years.
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b.
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Insurance. During
the period for which the Bank must indemnify Executive, the Bank will
provide Executive (and his heirs, executors, and administrators) with
coverage under a directors’ and officers’ liability policy at the Bank’s
expense, that is at least equivalent to the coverage provided to directors
and senior executives of the Bank.
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13. Reimbursement
of Executive’s Expenses to Enforce this Agreement. The Bank will
reimburse Executive for all out-of-pocket expenses, including, without
limitation, reasonable attorneys’ fees, incurred by Executive in connection with
his successful enforcement of the Bank’s obligations under this
Agreement. Successful enforcement means the grant of an award of
money or the requirement that the Bank take some specified action: (i) as a
result of court order; or (ii) otherwise following an initial failure of the
Bank to pay money or take action promptly following receipt of a written demand
from Executive stating the reason that the Bank must make payment or take action
under this Agreement.
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14. Limitation
of Benefits Under Certain Circumstances. If the payments
and benefits pursuant to Section 11 of this Agreement, either alone or together
with other payments and benefits Executive has the right to receive from the
Bank, would constitute an excess “parachute payment” under Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), the payments and
benefits pursuant to Section 11 shall be reduced or revised, in the manner
determined by Executive, by the amount, if any, which is the minimum necessary
to result in no portion of the payments and benefits under Section 11 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 Bank’s
independent public accountants will determine any reduction in the payments and
benefits to be made pursuant to Section 11; the Bank will pay for the
accountant’s opinion. If the Bank and/or Executive do not agree with
the accountant’s opinion, the Bank will pay to Executive the maximum amount of
payments and benefits pursuant to Section 11, as selected by Executive, that the
opinion indicates have a high probability of not causing any of the payments and
benefits to be non-deductible to the Bank and subject to the excise tax imposed
under Section 4999 of the Code. The Bank may also request, and
Executive has the right to demand that the Bank request, a ruling from the IRS
as to whether the disputed payments and benefits pursuant to Section 11 have
such tax consequences. The Bank will promptly prepare and file
the request for a ruling from the IRS, but in no event will the Bank make this
filing later than thirty (30) days from the date of the accountant’s opinion
referred to above. The request will be subject to Executive’s
approval prior to filing; Executive shall not unreasonably withhold his
approval. The Bank and Executive agree to be bound by any ruling
received from the IRS and to make appropriate payments to each other to reflect
any IRS rulings, together with interest at the applicable federal rate provided
for in Section 7872(f)(2) of the Code. Nothing contained in this Agreement shall
result in a reduction of any payments or benefits to which Executive may be
entitled upon termination of employment other than pursuant to Section 11
hereof, or a reduction in the payments and benefits specified in Section 11,
below zero.
15. Injunctive
Relief. Upon a breach or
threatened breach of Section 10(g) of this Agreement or the prohibitions upon
disclosure contained in Section 9(c) of this Agreement, the parties agree that
there is no adequate remedy at law for such breach, and the Bank shall be
entitled to injunctive relief restraining Executive from such breach or
threatened breach, but such relief shall not be the exclusive remedy for a
breach of this Agreement. The parties further agree that Executive,
without limitation, may seek injunctive relief to enforce the obligations of the
Bank under this Agreement.
16. Successors and
Assigns.
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a.
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This
Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the
Bank.
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b.
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Since
the Bank is contracting for the unique and personal skills of Executive,
Executive shall not assign or delegate his rights or duties under this
Agreement without first obtaining the written consent of the
Bank.
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17. No
Mitigation. Executive shall
not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no such payment shall be
offset or reduced by the amount of any compensation or benefits provided to
Executive in any subsequent employment.
18. Notices. All notices,
requests, demands and other communications in connection with this Agreement
shall be made in writing and shall be deemed to have been given when delivered
by hand or 48 hours after mailing at any general or branch United States Post
Office, by registered or certified mail, postage prepaid, addressed to the Bank
at its principal business office and to Executive at his home address as
maintained in the records of the Bank.
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19. No Plan
Created by this Agreement. Executive and the
Bank expressly declare and agree that this Agreement was negotiated among them
and that no provision or provisions of this Agreement are intended to, or shall
be deemed to, create any plan for purposes of the Employee Retirement Income
Security Act of 1974 (“ERISA”) or any other law or regulation, and each party
expressly waives any right to assert the contrary. Any assertion in
any judicial or administrative filing, hearing, or process that an ERISA plan
was created by this Agreement shall be deemed a material breach of this
Agreement by the party making the assertion.
20. Amendments. No amendments or
additions to this Agreement shall be binding unless made in writing and signed
by all of the parties, except as herein otherwise specifically
provided.
21. Applicable
Law. Except to the
extent preempted by federal law, the laws of the State of Illinois shall govern
this Agreement in all respects, whether as to its validity, construction,
capacity, performance or otherwise.
22. Severability. The provisions of
this Agreement shall be deemed severable and the invalidity or unenforceability
of any one provision shall not affect the validity or enforceability of the
other provisions of this Agreement.
23. Headings. Headings
contained in this Agreement are for convenience of reference only.
24. Entire
Agreement. This Agreement,
together with any modifications subsequently agreed to in writing by the
parties, shall constitute the entire agreement among the parties with respect to
the foregoing subject matter, other than written agreements applicable to
specific plans, programs or arrangements described in Sections 5 and
6.
25. Required
Provisions. In the event any
of the foregoing provisions of this Agreement conflict with the terms of this
Section 25, this Section 25 shall prevail.
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a.
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The
Bank’s Board of Directors may terminate Executive’s employment at any
time, but any termination by the Bank, other than termination for Cause,
shall not prejudice Executive’s right to compensation or other benefits
under this Agreement. Executive shall not have the right to
receive compensation or other benefits for any period after termination
for Cause as defined in Section 10(d) of this
Agreement.
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b.
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If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served
under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. Section 1818(e)(3) or (g)(1), the Bank’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 Bank may, in its discretion: (i) pay Executive
all or part of the compensation withheld while its contract obligations
were suspended; and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.
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c.
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If
Executive 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 Federal Deposit Insurance Act, 12 U.S.C. Section
1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order, but vested rights
of the contracting parties shall not be
affected.
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d.
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If
the Bank is in default as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1), all obligations under
this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting
parties.
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e.
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All
obligations under this Agreement shall terminate, except to the extent
determined that continuation of the Agreement is necessary for the
continued operation of the institution: (i) by the Director of
the Office of Thrift Supervision (OTS), or his 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 Federal Deposit Insurance Act, 12 U.S.C.
Section 1823(c), or (ii) by the Director of the OTS (or his designee) at
the time the Director (or his designee) approves a supervisory merger to
resolve problems related to the operations of the Bank or when the Bank is
determined by the Director 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.
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f.
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Any
payments made to Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and FDIC Regulation 12 C.F.R. Part 359, Golden Parachute
and Indemnification Payments.
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26. Section 409A of the
Code.
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a.
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This
Agreement is intended to comply with the requirements of Section 409A of
the Code, and specifically, with the “short-term deferral exception” under
Treasury Regulation Section 1.409A-1(b)(4) and the “separation pay
exception” under Treasury Regulation Section 1.409A-1(b)(9)(iii), and
shall in all respects be administered in accordance with Section 409A of
the Code. If any payment or benefit hereunder cannot be
provided or made at the time specified herein without incurring sanctions
on Executive under Section 409A of the Code, then such payment or benefit
shall be provided in full at the earliest time thereafter when such
sanctions will not be imposed. For purposes of Section 409A of
the Code, all payments to be made upon a termination of employment under
this Agreement may only be made upon a “separation from service” (within
the meaning of such term under Section 409A of the Code), each payment
made under this Agreement shall be treated as a separate payment, the
right to a series of installment payments under this Agreement (if any) is
to be treated as a right to a series of separate payments, and if a
payment is not made by the designated payment date under this Agreement,
the payment shall be made by December 31 of the calendar year in which the
designated date occurs. To the extent that any payment provided
for hereunder would be subject to additional tax under Section 409A of the
Code, or would cause the administration of this Agreement to fail to
satisfy the requirements of Section 409A of the Code, such provision shall
be deemed null and void to the extent permitted by applicable law, and any
such amount shall be payable in accordance with b. below. In no
event shall Executive, directly or indirectly, designate the calendar year
of payment.
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10
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b.
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Notwithstanding
anything herein to the contrary, if Executive is a “specified employee”
(within the meaning of Section 409A of the Code) and it is necessary to
postpone the commencement of any payments or benefits otherwise payable
under this Agreement as a result of Executive’ separation from service
with the Bank to prevent any accelerated or additional tax under Section
409A of the Code, then the Bank will postpone the commencement of the
payment of any such payments or benefits hereunder (without any reduction
in such payments or benefits ultimately paid or provided to Executive)
that are not otherwise paid with the “short-term deferral exception” under
Treasury Regulations Section 1.409A-1(b)(4) and the “separation pay
exception” under Treasury Regulations Section 1.409A-1(b)(9)(iii), until
the first payroll date that occurs after the date that is six months
following Executive’s separation of service with the Bank. If
any payments are postponed due to such requirements, such postponed
amounts will be paid to Executive in a lump sum on the first payroll date
that occurs after the date that is six months following Executive’s
separation of service with the Bank. If Executive dies during
the postponement period prior to the payment of postponed amount, the
amounts withheld on account of Section 409(A) of the Code shall be paid to
the personal representative of Executive’s estate within sixty (60) days
after the date of Executive’s
death.
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11
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the date first written
above.
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ATTEST:
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TEMPO
BANK
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||
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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By:
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇.
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Witness
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For
the Entire Board of Directors
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||
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WITNESS:
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EXECUTIVE
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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By:
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/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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12