Exhibit 10(h)
ARGO BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of November 1, 1996, by and between
Argo Bancorp, Inc. (the "Holding Company"), a corporation organized under the
laws of Delaware, with its principal administrative office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Executive").
Any reference to "Bank" herein shall mean Argo Federal Savings Bank, F.S.B. a
federally chartered stock savings bank or any successor thereto.
WHEREAS, the Holding Company wishes to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Holding
Company on a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the period of her employment hereunder, Executive Vice President and
Corporate Counsel agrees to serve as the Holding Company. The Executive shall
render administrative and management services to the Holding Company and shall
have such responsibilities and authority over the management and operation of
the Holding Company as Executive had prior to the date hereof. During said
period, Executive also agrees to serve, if elected, as an officer and director
of any subsidiary of the Holding Company. Failure to reelect Executive as
Executive Vice President and Corporate Counsel of the Holding Company or failure
to reelect Executive as Senior Vice President and General Counsel of the Bank
without the consent of the Executive shall constitute a breach of this
Agreement.
2. TERMS.
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written (the "Effective
Date") and shall continue for a period of sixty (60) full calendar months
thereafter. Commencing with the Effective Date, the term of this Agreement
shall be extended for one day each day until such time as the Board of the
Holding Company or the Executive elects not to extend the term of the Agreement
further by giving written notice to the other party in accordance with Section 9
of this Agreement, in which case the term of this Agreement shall be fixed and
shall end on the fifth anniversary of the date of such written notice. The
Board will review the Agreement and the Executive's
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performance annually for purposes of determining whether to give notice not to
extend the Agreement, and the results thereof shall be included in the minutes
of the Board's meeting.
(b) During the period of her employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote such amounts of her business time,
attention, skill, and efforts reasonably required for the faithful performance
of her duties hereunder including activities and services related to the
organization, operation and management of the Holding Company and participation
in community and civic organizations; provided, however, that, with the approval
of the Board, as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors of, and
hold any other offices or positions in, companies or organizations, which, in
such Board's judgment, will not present any conflict of interest with the
Holding Company, or materially affect the performance of Executive's duties
pursuant to this Agreement.
(c) Notwithstanding anything herein contained to the contrary: (i)
Executive's employment with the Holding Company may be terminated by the Holding
Company or Executive during the term of this Agreement, subject to the terms and
conditions of this Agreement; and (ii) nothing in this Agreement shall mandate
or prohibit a continuation of Executive's employment following the expiration of
the term of this Agreement upon such terms and conditions as the Board and
Executive may mutually agree.
(d) Upon the termination of Executive's employment with the Holding
Company, the daily extensions provided pursuant to section 2(a), shall cease (if
such extensions have not previously ceased), and, if such termination is under
circumstances described in section 4(a), the term "remaining term of the
Agreement" in section 4(b) shall mean the period of time commencing from the
date of such termination and ending on the last day of the employment period
computed with reference to all extensions prior to such termination.
(e) In the event that Executive's duties and responsibilities with respect
to the Bank are temporarily or permanently terminated pursuant to the
Employment Agreement dated November 1, 1996 (or any successor agreement
thereto) between Executive and the Bank ("Bank Agreement") and the course of
conduct upon which such termination is based would not constitute grounds for
Termination for Cause under Section 8 of this Agreement then Executive shall, to
the extent practicable, assume such duties and responsibilities formerly
performed at the Bank as part of her duties and responsibilities as an Executive
Officer of the Holding Company. Nothing in this provision shall be interpreted
as restricting the Holding Company's right to remove Executive for Cause in
accordance with Section 8 of this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The Holding Company shall pay Executive as compensation under this
Agreement
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a salary of not less than $33,415.00 (including amounts attributable to duties
compensable with respect to On-Line Financial Services) per year. The
compensation specified under this Agreement, together with a portion of that
compensation that otherwise would be paid by the Bank pursuant to the Bank
Agreement ("Base Salary"), shall constitute the consideration paid for the
duties described in Section 1. Base Salary shall also include any amounts of
compensation deferred by Executive under a qualified plan maintained by the
Bank. Such Base Salary shall be payable bi-weekly. During the period of this
Agreement, Executive's Base Salary shall be reviewed at least annually; the
first such review will be made no later than one year from the date of this
Agreement. Such review shall be conducted by the Compensation Committee
designated by the Board, and the Board may increase Executive's Base Salary. An
increase shall become the "Base Salary" for purposes of this Agreement. In no
event shall Executive's annual rate of salary under this Agreement in effect at
a particular time be reduced without her prior written consent. In addition to
the Base Salary provided in this Section 3(a), the Holding Company shall also
provide Executive at no cost to Executive with all such other benefits as are
provided uniformly to permanent full-time employees of the Holding Company and
the Bank.
(b) The Holding Company will provide Executive with employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Holding Company will
not, without Executive's prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect Executive's rights or
benefits thereunder, provided, however, that the Holding Company may make such
changes to such plans, agreements or perquisites generally provided on a
nondiscriminatory basis to all employees, without the Executive's consent. The
Holding Company may acquire "Key Man" insurance on Executive upon such terms and
conditions as may be determined from time to time by the Holding Company. Upon
an Event of Termination as defined below, the Holding Company shall transfer all
"Key Man" life insurance if any is owned by the Bank or the Holding Company to
Executive. Without limiting the generality of the foregoing provisions of this
Subsection (b), Executive will be entitled to participate in and receive
benefits under any employee benefit plans ("Benefit Plans") whether tax
qualified or not, including, but not limited to, stock grants, restricted stock,
stock options (and other option derived benefits), Employee Stock Ownership
Plans ("ESOP"), or any other stock based benefit plan, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans, health-and-
accident plan, medical coverage or any other Benefit Plan or arrangement made
available by the Holding Company or the Bank in the future to its senior
executives and key management employees, with awards, grants and levels of
benefits for Executive equal to at least levels customary in the industry for
persons of like title, authority and responsibility as Executive and with levels
of Executive's past participation in the Benefit Plans of the Holding Company or
Bank subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements.
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Because the Holding Company has determined to pay a portion of Base Salary
that might otherwise be attributable to the Executive's efforts on behalf of the
Bank, in order that the Bank may continue to increase levels of capital while
making available sufficient levels of compensation as are necessary to retain
other senior executives instrumental to the continuing success of the Bank, all
Base Salary earned by the Executive from the Holding Company pursuant to this
Agreement and the Bank pursuant to the Bank Agreement shall be considered when
determining the maximum extent that the Executive can participate under any
Benefit Plan offered by either the Holding Company or the Bank. Executive will
be entitled to incentive compensation and bonuses as provided in any plan of the
Holding Company in which Executive is eligible to participate. Nothing paid to
the Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which the Executive is entitled under this Agreement.
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3 and other compensation provided for by paragraph (b) of this Section
3, the Holding Company shall provide Executive with a late model automobile
("Automobile"), or Automobile allowance in lieu thereof, and shall pay or
reimburse Executive for all business entertainment expense, travel, Automobile
maintenance, operation and insurance and any other reasonable expenses incurred
by Executive to performing his obligations under this Agreement and may provide
such additional compensation in such form and such amounts as the Board may from
time to time determine.
(d) In the event that Executive assumes additional duties and
responsibilities pursuant to Section 2(c) of this Agreement by reason of one of
the circumstances contained in Section 2(c) of this Agreement, and the Executive
receives or will receive less than the full amount of compensation and benefits
formerly entitled to him under the Bank Agreement, the Holding Company shall
assume the obligation to provide Executive with compensation and benefits in
accordance with the Bank Agreement, less any compensation and benefits received
from the Bank, subject to the terms and conditions of this Agreement including
the Termination for Cause provisions in Section 8.
(e) In addition to Executive's Base Salary as provided in paragraph (a) of
this Section 3 and any incentive compensation or discretionary bonus otherwise
paid or payable to other senior executives or to this Executive exclusively, the
Holding Company shall annually award a Fixed Incentive Award to Executive in an
amount equal to one percent (1%) of the pre-tax profit of the Holding Company
and each separately incorporated or organized subsidiary, on an unconsolidated
basis, except to the extent paid under the terms of the Bank Agreement. The
Fixed Incentive Award shall be paid to Executive or his designated beneficiary
upon the earlier of (i) the termination by the Holding Company of her employment
for other than Termination for Cause; (ii) the expiration of this Agreement;
(iii) her death or Disability; or (iv) annually, upon the anniversary of this
Agreement. In the event Executive is subject to Termination for Cause or
voluntarily terminates her employment, Executive shall forfeit all rights to the
Fixed
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Incentive Award provided under this paragraph.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
The provisions of this Section shall in all respects be subject to the
terms and conditions stated in Section 8.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following: (i) the
termination by the Holding Company of Executive's full-time employment hereunder
for any reason other than for Disability, as defined in Section 6 hereof; upon
Retirement, as defined in Section 7 hereof; or for Cause, as defined in Section
8 hereof; (ii) Executive's resignation from the Holding Company's employ, upon
any (A) failure to elect or reelect or to appoint or reappoint Executive as
Executive Vice President and Corporate Counsel, or failure to nominate or re-
nominate or elect or re-elect Executive to the Board of Directors, (B) a
material change in Executive's function, duties, or responsibilities, which
change would cause Executive's position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described in
Section 1, above, (and any such material adverse change shall be deemed a
continuing breach of this Agreement), (C) a relocation of Executive's principal
place of employment by more than 30 miles from its location at the effective
date of this Agreement, (D) failure to provide the benefits required under
Section 3(b) of this Agreement, or a material reduction in the benefits and
perquisites to the Executive from those being provided as of the effective date
of this Agreement, (E) liquidation or dissolution of the Bank or Holding
Company, or (F) material breach of this Agreement by the Holding Company. Upon
the occurrence of any event described in clauses (A), (B), (C), (D), (E) or (F)
above, Executive shall have the right to elect to terminate her employment under
this Agreement by resignation upon not less than thirty (30) days prior written
notice given within a reasonable period of time not to exceed, except in case of
a continuing breach, four calendar months after the event giving rise to said
right to elect.
(b) Upon the occurrence of an Event of Termination, the Holding Company
shall be obligated to pay Executive, or, in the event of her subsequent death,
his beneficiary or beneficiaries, or her estate, as the case may be, the
following payments and benefits:
(i) Base Salary for the remaining term of the Agreement which shall
be the highest annual Base Salary paid prior to Executive's termination of
employment with the Holding Company or Bank, and which shall be increased
annually during the remaining term of the Agreement at a rate of 4% per
year ("Adjusted Base Salary").
(ii) Bonuses, the Fixed Incentive Award and other incentive payments
for the
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remaining term of the Agreement which shall be calculated as the
highest percentage of Base Salary such bonuses and incentive payments
represented prior to Executive's termination of employment with the Holding
Company or Bank multiplied by the Adjusted Base Salary each year during the
remaining term of the Agreement ("Adjusted Bonus").
(iii) Continuation for the remaining term of the Agreement of
Executive's and her dependents' participation in any life, medical, health,
disability, dental insurance or any other "welfare plan" (as such is
defined in Section 3 (1) of the Employee Retirement Security Act of 1974 as
amended from time to time ("ERISA") in which Executive participates in on
the day prior to the effective date of this Agreement (each being a
"Welfare Plan"), subject to the same premium contributions on the part of
Executive as were required immediately prior to the Event of Termination.
(iv) A benefit equal to the product of (i) the highest annual
allocation of ESOP shares Executive had previously received under the ESOP
and (ii) the lesser of (x) the remaining number of years remaining in the
term of the Agreement or (y) the number of annual allocations scheduled to
be made under the ESOP immediately prior to the Event of Termination.
(v) A benefit equal to the (i) additional employer contributions and
(ii) net return on all contributions, to which Executive would have been
entitled during the remaining term of the Agreement under any other
qualified or non-qualified defined contribution plan offered by the Holding
Company or the Bank assuming that Executive was 100% vested, Executive made
the maximum allowable contributions or deferrals under such plans,
Executive's compensation reflected Adjusted Base Salary and Adjusted Bonus
and assuming the crediting of interest on contributions being equal to the
return provided during the five (5) year period immediately preceding the
Event of Termination.
(vi) A benefit equal to the difference between (i) the benefits under
any qualified or non-qualified pension plan (as defined in Section 3 (2)(A)
of ERISA) which she would have earned or accrued during the remaining term
of the Agreement assuming such benefit was vested and is calculated using
Adjusted Base Salary and Adjusted Bonus as appropriate in the formula for
Accrued Benefit under the plans and assuming such benefit was calculated
without making any reduction in the Accrued Benefit due to the benefit
being provided prior to the normal retirement age as set out in the pension
plan and (ii) the accrued benefit Executive is vested in at the time of the
Event of Termination.
(vii) A benefit under any non-qualified Supplemental Executive
Retirement Plan ("SERP") maintained by the Holding Company or the Bank
which Executive would have earned each year within the remaining term of
the Agreement, using compensation values which take into account Adjusted
Base Salary and Adjusted Bonus and further assuming
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that the qualified plans to which the SERP refers provide the benefits
generally provided to Executive under their terms during the five year
period immediately prior to the Event of Termination, the limitations on
compensation and benefits under the Code remained fixed at their levels as
of the time of the Event of Termination, and the ESOP continued to allocate
unallocated shares according to its loan amortization schedule in place on
the last day of the ESOP Plan Year immediately prior to the Event of
Termination up to the point at which the ESOP would be fully allocated;
(viii) The benefit (net of deferrals) which would have been earned
each year of the remaining term of the Agreement under any other non-
qualified deferred compensation arrangements offered by the Holding Company
or the Bank calculated using compensation values which take into account
Adjusted Base Salary and Adjusted Bonus and which assume a percentage of
deferred compensation equal to the highest percentage of compensation
actually deferred during the five (5) year period immediately preceding the
Event of Termination and assuming the crediting of interest on deferred
monies equal to the return provided during the five (5) year period
immediately preceding the Event of Termination;
(ix) A benefit consisting of the award, allocation or grant of stock,
restricted stock, stock options or any other stock or stock-related benefit
which would have been made to Executive under any and all stock based
qualified or non-qualified compensation plans or arrangements offered by
Holding Company or the Bank immediately prior to or during the term of the
Agreement at either (A) the highest level of award possible for Executive
under the terms of plans which provide awards based upon levels of
individual or group or institutional performance goals, or (B) if awards
are made at the discretion of the Holding Company or Bank, then at a level
consistent with awards made in the industry for persons of similar title,
authority and responsibility and Executive's past level of benefit under
such plans. Such award, allocation or grant as provided herein shall be
deemed 100% vested immediately.
(x) Any award of stock options (or option derived benefits) to
Executive which have been made under a stock option plan or the stock
option feature of a broader compensation plan which have not already vested
shall be made fully vested and further, at the election of Executive, any
stock options shall be subsequently cancelled by Executive in consideration
for a payment from the Holding Company in an amount equal to the product of
(i) the number of stock options cancelled and (ii) the difference between
(x) the fair market value (at the time of cancellation) of the stock upon
which the option was issued and (y) the exercise price of the stock option;
(xi) Any award of restricted stock or a stock grant (or award and
grant derived benefits) to Executive which have been made under a stock
grant plan or feature of a
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broader compensation plan which have not already vested shall be made fully
vested and further, at the election of Executive, any stock awarded under
such a plan shall at the election of Executive be subject to a put option
entitling Executive to sell all or some portion of such stock to the
Holding Company at the then fair market value.
(xii) For the purpose of calculating benefits to be provided during
the remaining term of the Agreement, benefits shall be provided in the
form and calculated as described above. In the event that a benefit
otherwise payable in a stock form cannot be provided in stock, such benefit
will be provided in the form of cash using the greater of the fair market
value of the stock at the time of the distribution of the benefit or the
closing price of the stock on the day prior to the time of distribution or
the last day of trading prior to the time of distribution.
(c) At the election of the Executive, which election must be made prior
to or on the Date of Termination, such payments shall be made in a lump sum or
paid monthly during the remaining term of the Agreement following the
Executive's termination. In the event that no election is made, payment to the
Executive will be made on a monthly basis during the remaining term of the
Agreement. Such payments shall not be reduced in the event the Executive
obtains other employment following termination of employment. In the event that
the Executive is receiving monthly payments pursuant to this Section 4, on an
annual basis, thereafter, between the dates of January 1 and January 31 of each
year, Executive shall elect whether, the balance of the amount payable under the
Agreement at that time shall be paid in a lump sum or on a pro rata basis. Such
election shall be irrevocable for the year for which such election is made.
5. CHANGE IN CONTROL.
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Bank or the Holding Company as set forth
below. For purposes of this Agreement, a "Change in Control" of the Bank or
Holding Company shall mean an event of a nature that: (i) would be required to
be reported in response to Item 1(a) of the Current Report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); or (ii) results in a Change in
Control of the Bank or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision ("OTS") (or its predecessor agency), as in effect on the
date hereof (provided, that in applying the definition of change in control as
set forth under the rules and regulations of the OTS, the Board shall substitute
its judgment for that of the OTS); or (iii) without limitation such a Change in
Control shall be deemed to have occurred at such time as (A) any "person" (as
the 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 Bank or the Holding Company
representing 20% or more of the Bank's or the Holding Company's
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outstanding securities except for any securities of the Bank purchased by the
Holding Company in connection with the conversion of the Bank to the stock form
and any securities purchased by any Benefit Plan of the Bank, or (B) individuals
who constitute the Board on the date hereof (the "Incumbent Board") cease for
any reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Holding Company's stockholders
was approved by the same Nominating Committee serving under an Incumbent Board,
shall be, for purposes of this clause (B), considered as though he were a member
of the Incumbent Board, or (C) a plan of reorganization, merger, consolidation,
sale of all or substantially all the assets of the Bank or the Holding Company
or similar transaction occurs in which the Bank or Holding Company is not the
resulting entity, or (D) a proxy statement is distributed soliciting proxies
from stockholders of the Holding Company, by someone other than the current
management of the Holding Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Holding Company or Bank with one
or more corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Bank or the
Holding Company shall be distributed, or (E) a tender offer is made for 20% or
more of the voting securities of the Bank or Holding Company then outstanding.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d), (e) and (f) of this Section 5 upon her subsequent
termination of employment at any time during the term of this Agreement
(regardless of whether such termination results from his dismissal or her
resignation at any time during the term of this Agreement following any
demotion, loss of title, office or significant authority or responsibility,
reduction in the annual compensation or benefits or relocation of her principal
place of employment by more than 30 miles from its location immediately prior to
the Change in Control), unless such termination is because of her death, or
Termination for Cause provided, however, that such payments shall be reduced by
any payment made under Section 4 of this Agreement.
(c) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Holding Company shall pay Executive, or in the
event of her subsequent death, his beneficiary or beneficiaries, or his estate,
as the case may be, as severance pay or liquidated damages, or both, a sum equal
to five (5) times the average of the three (3) preceding years' (i) Base Salary,
(ii) any other taxable income including but not limited to the vesting of stock
grants or restricted stock, the exercise of stock options, the distribution of
previously deferred compensation, including Fixed Incentive Award, bonuses and
any other cash or deferred compensation paid or to be paid to the Executive
during such years, and (iii) the amount of any contributions made or to be made
to any Benefit Plans whether tax qualified or non-qualified including but not
limited to defined benefit pension plans, defined contribution plans, SERP's,
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ESOP's, Welfare Plans, stock option benefits, stock grant benefits, on behalf of
the Executive, maintained by the Bank or the Holding Company during such years.
At the election of the Executive, which election must be made prior to or on the
Date of Termination following a Change in Control, such payment may be made in a
lump sum or paid in equal bi-weekly installments during the sixty (60) months
following the Executive's termination. In the event that no election is made,
payment to the Executive will be made on a bi-weekly basis during the remaining
term of the Agreement.
(d) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Holding Company will cause to be continued life,
medical, dental and disability coverage for Executive and any of her dependents
covered under such plans prior to the Change in Control, substantially identical
to the coverage maintained by the Bank or the Holding Company for Executive and
her dependants prior to her severance. Such coverage and payments shall cease
upon the expiration of sixty (60) months. If Executive or any dependant should
die during this sixty (60) month period, coverage for the remaining parties
shall continue for the remainder of the sixty (60) month period.
(e) In the event that the Executive is receiving bi-weekly payments
pursuant to Section 5(c) hereof, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, Executive shall elect whether
the balance of the amount payable under the Agreement at that time shall be paid
in a lump sum or on a pro rata basis pursuant to such section. Such election
shall be irrevocable for the year for which such election is made.
(f) Notwithstanding the preceding paragraphs of this Section 5, in the
event that:
for any taxable year in which the Executive shall be liable, as determined for
the payment of an excise tax under Section 4999 of the Code, with respect to any
payment in the nature of the compensation made by the Company or the Bank to (or
for the benefit of) Executive, the Company shall pay to the Executive an amount
determined under the following formula:
An amount equal to: (E x P) + X
WHERE:
X = E x P
--------------------------------
1 - [(FI x (1 - SLI)) + SLI + E]
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E = the rate at which the excise tax is assessed under Section 4999 of
the Code;
P = the amount with respect to which such excise tax is assessed,
determined without regard to this Section 5;
FI = the highest marginal rate of deferral income tax applicable to
Executive under the Code for the taxable year in question; and
SLI = the sum of the highest marginal rates of income, unemployment,
social security, medicare and any other payroll tax applicable to
Executive under applicable state and local laws for the taxable
year in question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise and
on which an excise tax under Section 4999 of the Code will be assessed, the
payment determined under this Section 5 shall be made to Executive on the
earlier of (i) the date the Company is required to withhold such tax, or (ii)
the date the tax is required to be paid by Executive.
Notwithstanding the foregoing, if it shall subsequently be determined in a
final judicial determination or a final administrative settlement to which
Executive is a party that the excess parachute payment as defined in Section
4999 of the Code, reduced as described above, is more than the amount determined
as "P", above (such greater amount being hereafter referred to as the
"Determinative Excess Parachute Payment") then the Company's independent
accountants shall determine the amount (the "Adjustment Amount") the Company
must pay to the Executive, in order to put the Executive (or the Company, as the
case may be) in the same position as the Executive (or the Company, as the case
may be) would have been if the amount determined as "P" above had been equal to
the Determinative Excess Parachute Payment. In determining the Adjustment
Amount, the independent accountants shall take into account any and all taxes
(including any penalties and interest) paid by or for Executive or refunded to
Executive or for Executive's benefit. As soon as practicable after the
Adjustment Amount has been so determined, the Company shall pay the Adjustment
Amount to Executive.
In each calendar year that Executive receives payments or benefits under
the Employment Agreement, Executive shall report on her income tax returns such
information as is consistent with the determination made by the independent
accountants of the Company as described above. The Company shall indemnify and
hold Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorney's fees, interest, fines and penalties)
which Executive incurs as a result of so reporting such information. Executive
shall promptly notify the Company in writing whenever the Executive receives
notice of the institution of a judicial or administrative proceeding, formal or
informal, in which the federal tax treatment under Section 4999 of the Code of
any amount paid or payable under this Supplemental
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Agreement is being reviewed or is in dispute. The Company shall assume control
at its expense over all legal and accounting matters pertaining to such federal
tax treatment (except to the extent necessary or appropriate for Executive to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable pursuant to this Agreement) and Executive shall cooperate fully with
the Company in any such proceeding. The Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Company may have
in connection therewith without prior consent to the Company.
6. TERMINATION FOR DISABILITY
(a) If, as a result of Executive's incapacity due to physical or mental
illness, such incapacity being determined by a doctor selected by the Holding
Company, she shall have been absent from her duties with the Holding Company on
a full-time basis for six (6) consecutive months, and within thirty (30) days
after written notice of potential termination is given she shall not have
returned to the full-time performance of her duties, the Holding Company may
terminate Executive's employment for "Disability."
(b) The Holding Company will pay Executive, as disability pay, a bi-weekly
payment equal to one hundred percent (100%) of Executive's bi-weekly rate of
Base Salary on the effective date of such termination. These disability
payments shall commence on the effective date of Executive's termination and
will end on the earlier of (i) the date Executive returns to the full-time
employment of the Holding Company in the same capacity as she was employed prior
to her Termination for Disability and pursuant to an employment agreement
between Executive and the Holding Company; (ii) Executive's full-time employment
by another employer; (iii) Executive attaining the normal age of retirement or
receiving benefits under any Defined Benefit Plan of the Bank or Holding
Company; (iv) Executive's death; or (v) the expiration of the term of this
Agreement. Notwithstanding any other provisions to the contrary, the Holding
Company may apply any proceeds from disability income insurance for Executive
which was paid for by the Bank or Holding Company as partial satisfaction of its
obligations under this Section.
(c) The Holding Company will cause to be continued life, medical, dental
and disability coverage substantially identical to the coverage maintained by
the Holding Company for Executive and her dependants prior to his Termination
for Disability. This coverage and payments shall cease upon the earlier of (i)
the date Executive returns to the full-time employment of the Holding Company,
in the same capacity as she was employed prior to his Termination for Disability
and pursuant to an employment agreement between Executive and the Holding
Company; (ii) Executive's full-time employment by another employer; (iii)
Executive's attaining the normal age of retirement or receiving benefits under
any Defined Benefit Plan of the Bank or Holding Company; (iv) the Executive's
death; or (v) the expiration of the term of this Agreement.
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(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period which Executive is
incapable of performing her duties hereunder by reason of temporary disability.
7. TERMINATION UPON RETIREMENT.
Termination by the Holding Company of the Executive based on "Retirement"
shall mean termination in accordance with the Holding Company's or Bank's
retirement policy or in accordance with any retirement arrangement established
with Executive's consent with respect to her. Upon termination of Executive
upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Holding Company or the Bank and other plans to which
Executive is a party, and shall be entitled to the benefits, if any, as a former
employee under the Holding Company's or the Bank's Benefit Plans and programs
and compensation plans and programs.
8. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of personal
dishonesty which results in loss to the Company or one of its affiliates,
intentional failure to perform stated duties, or willful violation of any law,
rule, regulation (other than traffic violations or similar offenses) or final
cease and desist order which results in substantial loss to the Holding Company
or one of its affiliates. For purposes of this Section, no act, or the failure
to act, on Executive's part shall be "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that the action or
omission was in the best interest of the Holding Company or its affiliates.
Notwithstanding the foregoing, Executive shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to her a
Notice of Termination which shall include a copy of a resolution duly adopted by
the affirmative vote of not less than three-fourths of the members of the Board
at a meeting of the Board called and held for that purpose (after reasonable
notice to Executive and an opportunity for him, together with counsel, to be
heard before the Board), finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying Termination for Cause and specifying
the particulars thereof in detail. The Executive shall not have the right to
receive compensation or other benefits for any period after Termination for
Cause. Any stock options and related limited rights granted to Executive under
any stock option plan, or any unvested awards granted to Executive under any RRP
of MRP of the Bank, the Holding Company or any subsidiary or affiliate thereof,
shall become null and void effective upon Executive's receipt of Notice of
Termination for Cause pursuant to Section 9 hereof, and shall not be exercisable
by or delivered to Executive at any time subsequent to such Termination for
Cause.
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9. NOTICE.
(a) Any purported termination by the Holding Company or by Executive shall
be communicated by Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated.
(b) Subject to Section 9(c), "Date of Termination" shall mean (A) if
Executive's employment is terminated for Disability, thirty (30) days after a
Notice of Termination is given (provided that she shall not have returned to the
performance of her duties on a full-time basis during such thirty (30) day
period, and (B) if her employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a Termination for
Cause, shall not be less than thirty (30) days from the date such Notice of
Termination is given).
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the occurrence of a
Change in Control and voluntary termination by the Executive in which case the
Date of Termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected)
and provided further that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Holding Company will
continue to pay Executive her full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, Base Salary) and
the Executive shall continue as a participant in all compensation, benefit and
insurance plans in which she was participating when the notice of dispute was
given, until the dispute is finally resolved in accordance with this Agreement.
Amounts paid under this Section are in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any other amounts due
under this Agreement.
(d) The Holding Company may terminate the Executive's employment at any
time, but any termination by the Holding Company, other than Termination for
Cause, shall not prejudice Executive's right to compensation or other benefits
under this Agreement or under any other benefit or compensation plans or
programs maintained by the Holding Company from time to time. Executive shall
not have the right to receive compensation or other benefits for any period
after Termination for Cause as defined in Section 8 hereinabove.
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10. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 10 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Holding Company as may reasonably be required by the Holding
Company in connection with any litigation in which it or any of its subsidiaries
or affiliates is, or may become, a party. The Holding Company will reimburse
the Executive for reasonable costs incurred by the Executive in connection with
furnishing such information and assistance to the Holding Company.
11. NON-DISCLOSURE OF HOLDING COMPANY BUSINESS
Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Holding Company and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Holding Company. Executive will not,
during or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Bank or affiliates
thereof to any person, firm, corporation, or other entity for any reason or
purpose whatsoever. Notwithstanding the foregoing, Executive may disclose any
knowledge of banking, financial and/or economic principles, concepts or ideas
which are not solely and exclusively derived from the business plans and
activities of the Holding Company. In the event of a breach or threatened
breach by the Executive of the provisions of this Section, the Holding Company
will be entitled to an injunction restraining Executive from disclosing, in
whole or in part, the knowledge of the past, present, planned or considered
business activities of the Holding Company or affiliates thereof, or from
rendering any services to any person, firm, corporation, other entity to whom
such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed. Nothing herein will be construed as prohibiting the Holding Company
from pursuing any other remedies available to the Holding Company for such
breach or threatened breach, including the recovery of damages from Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Holding Company subject to Section 13
hereof. The Holding Company may use insurance proceeds especially obtained
therefore as partial payment in the event of disability.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and
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supersedes any prior employment agreement between the Holding Company or any
predecessor of the Holding Company and Executive, except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to the
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to her without reference to this Agreement.
14. EFFECT OF ACTION UNDER BANK AGREEMENT.
Notwithstanding any provision herein to the contrary, to the extent that
payments and benefits, as provided by this Agreement, are paid to or received by
Executive under the Bank Agreement (or any successor thereto), except to the
extent that Base Salary is paid under the Bank Agreement with respect to duties
performed thereto, such compensation payments and benefits paid by the Bank will
be subtracted from any amount due simultaneously to Executive under similar
provisions of this Agreement. Payments pursuant to this Agreement and the Bank
Agreement shall be allocated in proportion to the level of activity and the time
expended on such activities by the Executive as determined by the Holding
Company and the Bank on an annual basis.
15. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
16. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
17. SUCCESSOR AND ASSIGNS.
This Agreement will inure to the benefit of and be binding upon Executive,
her legal representatives and testate or intestate distributees, and the Holding
Company, its successors and
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assigns, including any successor by purchase, merger, consolidation or otherwise
or a statutory receiver or any other person or firm or corporation to which all
or substantially all of the assets and business of the Holding Company may be
sold or otherwise transferred. Any such successor of the Holding Company shall
be deemed to have assumed this Agreement and to have become obligated hereunder
to the same extent as the Holding Company, and Executive's obligations hereunder
shall continue in favor of such successor.
18. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
19. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
20. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Delaware,
unless otherwise specified herein.
21. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of the Bank, in accordance with the rules of
the American Arbitration Bank then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of her right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of all back-pay, including salary, bonuses, Fixed
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Incentive Award and any other cash compensation, fringe benefits including those
accruing under any Benefit Plan, and any compensation and benefits including
those accruing under any Benefit Plan, due Executive under this Agreement.
22. INDEMNIFICATION AND ATTORNEYS' FEES.
(a) The Holding Company shall indemnify, hold harmless and defend
Executive against reasonable costs, including legal fees, incurred by her in
connection with her consultation with legal counsel or arising out of any
action, suit or proceeding in which she may be involved, as a result of his
efforts, in good faith, to defend or enforce the terms of this Agreement. Such
reimbursement shall be made within ten (10) days of Executive providing written
documentation of such expense.
(b) In the event any dispute or controversy arising under or in connection
with Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of all back-pay, including salary, bonuses, Fixed Incentive Award and any other
cash compensation, fringe benefits including those accruing under any Benefit
Plan, and any compensation and benefits due Executive under this Agreement.
(c) The Holding Company shall indemnify, hold harmless and defend
Executive for all acts or omissions taken or not taken by her in good faith
while performing services for the Holding Company to the same extent and upon
the same terms and conditions as other similarly situated officers and directors
of the Holding Company. If and to the extent that the Holding Company
maintains, at any time during the remaining term of this Agreement and for an
additional period of seven (7) years thereafter, an insurance policy covering
the other officers and directors of the Holding Company against law suits, the
Holding Company shall use its best efforts to cause Executive to be covered
under such policy upon the same terms and conditions as other similarly situated
officers and directors.
23. MISCELLANEOUS
Unless otherwise subject to law, all lump sum calculations shall be done
using the methods, rates and assumptions set out in Code Section 1274(d) and the
regulations and statements issued thereunder by the IRS.
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SIGNATURES
IN WITNESS WHEREOF, Argo Bancorp, Inc. has caused this Agreement to be
executed and its seal to be affixed hereunto by its duly authorized officer and
its directors, and Executive has signed this Agreement, as amended and restated
on the 1st day of November, 1996.
ATTEST: ARGO BANCORP, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------- -------------------------------------
Secretary On Behalf of the Entire Board of Directors
[SEAL]
WITNESS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- -----------------------------------------
Executive
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