EXHIBIT 10.8
[EXECUTIVE]
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement") is made as of the
___ day of May, 2003, by and between Kankakee Bancorp, Inc., a Delaware
corporation (the "Company") and [Executive] ("Executive") and is joined in by
State Bank of Aviston solely for purposes of Section 15 below.
RECITALS
A. Executive is currently serving as an executive of State Bank of
Aviston, an Illinois banking corporation ("Bank") and a wholly owned Subsidiary
of Aviston Financial Corporation, an Illinois corporation ("Aviston").
B. Pursuant to the terms of that certain Agreement and Plan of Merger
of even date herewith (the "Merger Agreement") between the Employer and Aviston,
the Employer desires to acquire control of Aviston and if the Closing (as
defined in the Merger Agreement) occurs, further desires to employ the Executive
as an executive of the Employer.
C. Company recognizes that future circumstances could arise that might
lead to a Change of Control (as defined below) of Company and that this
possibility could cause Executive uncertainty with respect to continued
employment, regardless of Executive's competence or past contributions.
D. The board of directors of Company (the "Board") has determined that
if the Closing occurs, it is in the best interests of Company and its
stockholders to assure that Company and its Affiliates (as defined below) will
enjoy the continued dedication of Executive to Executive's duties and
responsibilities, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below) of Company.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:
AGREEMENTS
1. Term With Automatic Renewal Provisions. The term of this
Agreement shall commence, if at all, upon the occurrence of the Closing (the
"Effective Date") and shall continue for a period of one (1) year. This
Agreement shall automatically extend for one (1) year on each anniversary of the
Effective Date, unless terminated by either party effective as of the last day
of the then current one (1) year extension by written notice to that effect
delivered to the other not fewer than ninety (90) days prior to the anniversary
of the Effective Date; provided, however, no termination of this Agreement shall
be effective if a Change of Control occurs within twelve (12) months of such
termination. In the event of a Change of Control during the term of this
Agreement, this Agreement shall remain in effect for the one (1) year period
following the Change of Control.
2. Payment of Severance Amount. If Executive's employment by the
Company, or any Affiliate or successor of the Company, is terminated by either
the Company or Executive during the time periods set forth in subparagraphs (a)
and (b) below, then the Company shall pay Executive an amount equal to the
Severance Amount, payable in one (1) lump sum within fifteen (15) days after the
Termination Date:
(a) Termination by the Company, or any Affiliate or
successor of the Company, without Cause, within either six (6) months
prior to a Change of Control or twelve (12) months immediately
following a Change of Control; or
(b) Termination by Executive, other than as a result of
death, disability, or normal retirement pursuant to a retirement plan
to which Executive was subject prior to any Change of Control, and
following a Change in Duties, which Change in Duties and termination
shall occur within twelve (12) months immediately following a Change of
Control.
3. Definitions. All of the terms defined in this Section 3 shall
have the meanings given below throughout this Agreement.
(a) "Affiliate" shall mean any entity which owns or
controls, is owned by or is under common ownership or control with, the
Company, including without limitation, Kankakee Federal Savings Bank.
(b) "Annual Base Salary" shall, as determined on the
Termination Date, be equal to the greater of:
(i) Executive's annual salary, excluding
bonuses, benefits and special incentive
payments, on the date of the earliest event
which constitutes a Change of Control; or
(ii) Executive's annual salary, excluding
bonuses, benefits and special incentive
payments, as of the Termination Date.
(c) "Bank" shall mean Kankakee Federal Savings Bank.
(d) "Cause" shall mean the termination of Executive's
employment as a result of:
(i) fraud, misappropriation of or intentional
material damage to the property or business
of the Company (including its Affiliates),
(ii) substantial and material failure by
Executive to fulfill the duties and
responsibilities of his or her regular
position and/or comply with the Company's or
its Affiliates' policies, rules or
regulations, or
(iii) Executive's conviction of a felony.
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(e) "Change in Duties" shall mean any one or more of the
following occurring after a Change of Control:
(i) a significant change in the nature or scope
of Executive's authority or duties from
those applicable to Executive immediately
prior to the date on which a Change of
Control occurs;
(ii) a reduction in Executive's Annual Base
Salary (within the meaning of Section
3(b)(i)) from that provided to Executive
immediately prior to the date on which a
Change of Control occurs;
(iii) Executive's eligibility to participate, and
participation, in bonus, stock option,
incentive award and other compensation plans
which provide opportunities to receive
compensation are not the same or greater
than that of executives of the successor of
the Company (including its Affiliates) with
comparable duties;
(iv) executive benefits (including but not
limited to medical, dental, life insurance
and long-term disability plans) and
perquisites applicable to Executive are not
the same as or greater than that of the
executive benefits and perquisites provided
to executives of the successor of the
Company (including its Affiliates) with
comparable duties; or
(v) a change, without Executive's written
agreement, in the location of Executive's
principal place of employment with the
Company (including its Affiliates) by more
than fifty (50) miles from the location
where Executive was principally employed
immediately prior to the date on which a
Change of Control occurs.
(f) "Change of Control" shall mean the following:
(i) The consummation of the acquisition by any
person (as such term is defined in Section
13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) of
beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the ▇▇▇▇ ▇▇▇)
of twenty-five percent (25%) or more of the
combined voting power of the then
outstanding Voting Securities of the
Company;
(ii) The individuals who, as of the date hereof,
are members of the Board cease for any
reason to constitute a majority of the
Board, unless the election, or nomination
for election by the stockholders, of any new
director was approved by a vote of a
majority of the Board, and such new director
shall, for purposes of this Agreement, be
considered as a member of the Board; or
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(iii) Consummation of: (1) a merger or
consolidation to which the Company is a
party if the stockholders of the Company
immediately before such merger or
consolidation do not, as a result of such
merger or consolidation, own, directly or
indirectly, more than sixty-seven percent
(67%) of the combined voting power of the
then outstanding Voting Securities of the
entity resulting from such merger or
consolidation in substantially the same
proportion as their ownership of the
combined voting power of the Company's
Voting Securities outstanding immediately
before such merger or consolidation; or (2)
a complete liquidation or dissolution or
sale or other disposition of all or
substantially all of the assets of the
Company or the Bank.
Notwithstanding the foregoing, a Change of Control shall not
be deemed to occur solely because twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding Voting
Securities is acquired by: (1) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for
employees of the entity; or (2) any corporation which, immediately
prior to such acquisition, is owned directly or indirectly by the
stockholders in the same proportion as their ownership of stock
immediately prior to such acquisition.
(g) "Severance Amount" shall mean the amount equal to all
amounts earned or accrued through the Termination Date, including
Annual Base Salary (within the meaning of Section 3(b)(i)) and vacation
pay, plus an amount equal to three (3) times the sum of: (i)
Executive's Annual Base Salary; (ii) the average of the two (2) most
recent annual performance bonuses received by the Executive as of the
date of the Change of Control; and (iii) the average of the
contributions made by the Company to tax-qualified retirement plans for
the benefit of the Executive for the two (2) years immediately
preceding the date of the Change of Control.
(h) "Termination Date" shall mean the date of employment
termination indicated in the written notice provided by the Company or
Executive to the other.
(i) "Voting Securities" shall mean any securities which
ordinarily possess the power to vote in the election of directors
without the happening of any pre-condition or contingency.
4. Golden Parachute Payment Adjustment. If it is determined, in
the opinion of the Company's independent accountants, in consultation, if
necessary, with the Company's independent legal counsel, that any Severance
Amount payments under this Agreement, either separately or in conjunction with
any other payments, benefits and entitlements received by Executive in respect
of a Change of Control under any other plan or agreement under which Executive
participates or to which the Executive is a party, would constitute an "Excess
Parachute Payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and thereby be subject to the excise tax
imposed by Section 4999 of the Code (the "Excise Tax"), then in such event the
Company shall pay to Executive a
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"grossing-up" amount equal to the amount of such Excise Tax, plus all federal
and state income or other taxes with respect to the payment of the amount of
such Excise Tax, including all such taxes with respect to any such grossing-up
amount. If, at a later date, the Internal Revenue Service assesses a deficiency
against Executive for the Excise Tax which is greater than that which was
determined at the time such amounts were paid, then the Company shall pay to
Executive the amount of such unreimbursed Excise Tax plus any interest,
penalties and reasonable professional fees or expenses incurred by Executive as
a result of such assessment, including all such taxes with respect to any such
additional amount. The highest marginal tax rate applicable to individuals at
the time of the payment of such amounts will be used for purposes of determining
the federal and state income and other taxes with respect thereto. The Company
shall withhold from any amounts paid under this Agreement the amount of any
Excise Tax or other federal, state or local taxes then required to be withheld.
Computations of the amount of any grossing-up supplemental compensation paid
under this subparagraph shall be conclusively made by the Company's independent
accountants, in consultation, if necessary, with the Company's independent legal
counsel. If, after Executive receives any gross-up payments or other amount
pursuant to this Section 4, Executive receives any refund with respect to the
Excise Tax, Executive shall promptly pay the Company the amount of such refund
within ten (10) days of receipt by Executive.
5. Medical Benefits. If Executive's employment by the Company or
any Affiliate or successor of the Company is terminated and Executive is
entitled to a Severance Amount pursuant to Section 2 above, then to the extent
that Executive or any of Executive's dependents may be covered under the terms
of any medical plans of the Company (or any Affiliate) for active employees
immediately prior to the Termination Date, the Company will provide Executive
and those dependents with equivalent coverages for the period of three (3) years
from the Termination Date. The coverages may be procured directly by the Company
(or any Affiliate, if appropriate) apart from, and outside of the terms of the
plans themselves; provided that Executive and Executive's dependents comply with
all of the conditions of the medical plans. In consideration for these benefits,
Executive must make contributions equal to those required from time to time from
employees for equivalent coverages under the medical plans.
6. Regulatory Suspension and Termination.
(a) If Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the
Company's affairs by a notice served under Section 8(e)(3) (12 U.S.C.
Section 1818(e)(3)) or 8(g) (12 U.S.C. Section 1818(g)) of the Federal
Deposit Insurance Act, as amended, the Company's obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed,
the Company may in its discretion (i) pay Executive all or part of the
amounts withheld while the contract obligations were suspended and (ii)
reinstate (in whole or in part) any of the obligations which were
suspended.
(b) If Executive is removed and/or permanently prohibited
from participating in the conduct of the Company's affairs by an order
issued under Section 8(e) (12 U.S.C. Section 1818(e)) or 8(g) (12
U.S.C. Section 1818(g)) of the Federal Deposit Insurance Act, as
amended, all obligations of the Company under this contract shall
terminate as of the
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effective date of the order, but vested rights of the contracting
parties shall not be affected.
(c) If the Company is in default as defined in Section
3(x) (12 U.S.C. Section 1813(x)(1)) of the Federal Deposit Insurance
Act, as amended, all obligations of the Company under this contract
shall terminate as of the date of default, but this Section 6(c) shall
not affect any vested rights of the contracting parties.
(d) All obligations of the Company under this contract
shall be terminated, except to the extent determined that continuation
of the contract is necessary for the continued operation of the
institution by the Federal Deposit Insurance Corporation (the "FDIC"),
at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Company under the authority contained in Section
13(c) (12 U.S.C. Section 1823(c)) of the Federal Deposit Insurance Act,
as amended, or when the Company is determined by the FDIC to be in an
unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Any payments made to Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) (12 U.S.C. Section 1828(k)) of the
Federal Deposit Insurance Act, as amended, and any regulations
promulgated thereunder.
7. Notices. Notices and all other communications under this
Agreement shall be in writing and shall be deemed given when mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company to:
Kankakee Bancorp, Inc.
Attention: Chairman of the Board
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. ▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
If to Executive to:
[Executive]
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or to such other address as either party may furnish to the other in writing,
except that notices of changes of address shall be effective only upon receipt.
8. Applicable Law. This Agreement is entered into under, and
shall be governed for all purposes by, the laws of the state of Illinois.
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9. Severability. If a court of competent jurisdiction determines
that any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement and all other
provisions shall remain in full force and effect.
10. Withholding of Taxes. The Company may withhold from any
benefits payable under this Agreement all federal, state, city or other taxes as
may be required pursuant to any law, governmental regulation or ruling.
11. Not an Employment Agreement. Nothing in this Agreement shall
give Executive any rights (or impose any obligations) to continued employment by
the Company or any Affiliate or successor of the Company, nor shall it give the
Company any rights (or impose any obligations) for the continued performance of
duties by Executive for the Company or any Affiliate or successor of the
Company.
12. No Assignment. Executive's rights to receive payments or
benefits under this Agreement shall not be assignable or transferable whether by
pledge, creation of a security interest or otherwise, other than a transfer by
will or by the laws of descent or distribution. In the event of any attempted
assignment or transfer contrary to this Section 12, the Company shall have no
liability to pay any amount so attempted to be assigned or transferred. This
Agreement shall inure to the benefit of and be enforceable by Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
13. Successors. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns (including, without
limitation, any company into or with which the Company may merge or
consolidate). The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets or the Bank's assets
unless either (a) the person or entity acquiring the assets, or a substantial
portion of the assets, shall expressly assume by an instrument in writing all
duties and obligations of the Company under this Agreement, or (b) the Company
shall provide, through the establishment of a separate reserve, for the payment
in full of all amounts which are or may reasonably be expected to become payable
to Executive under this Agreement.
14. Legal Fees. All reasonable legal fees and related expenses
(including the costs of experts, evidence and counsel) paid or incurred by
Executive pursuant to any dispute relating to this Agreement shall be paid or
reimbursed by the Company if Executive is successful on the merits pursuant to a
legal judgment, arbitration or settlement.
15. Termination of Retention Agreement. State Bank of Aviston
joins this Agreement solely for purposes of this Section 15. State Bank of
Aviston and Executive hereby agree that that certain State Bank of Aviston
[Executive] Executive Retention Agreement between Executive and State Bank of
Aviston dated [Date] shall terminate immediately prior to the Effective Time (as
defined in the Merger Agreement).
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16. Entire Agreement Modifications. This Agreement constitutes the
entire agreement between the parties respecting the subject matter hereof, and
supercedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. This Agreement may not be amended
or modified except by written agreement signed by Executive and the Company.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first written.
KANKAKEE BANCORP, INC. [EXECUTIVE]
By:
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Its: Chairman of the Board Address:
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STATE BANK OF AVISTON,
Solely for purposes of Section 15
By:
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Its:
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