Exhibit 10.6
THREE YEAR
FIRST ▇▇▇▇ BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement") is made effective as of November 16,
1998, by and between First ▇▇▇▇ 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
"Institution" herein shall mean ▇▇▇▇ Federal Savings and Loan Association of
Bellevue 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 his employment hereunder, Executive agrees to
serve as President and Chief Executive Officer of the Holding Company. The
Executive shall render administrative and management services to the Holding
Company such as are customarily performed by persons in a similar executive
capacity. During said period, Executive also agrees to serve, if elected, as an
officer and director of any subsidiary of the Holding Company.
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 and shall continue
for a period of thirty-six (36) full calendar months thereafter. Commencing on
the first anniversary date of this Agreement, and continuing on each anniversary
thereafter, the term of this Agreement shall be extended by an additional year,
such that the remaining term of the Agreement shall be three years, until such
time as the board of directors of the Holding Company ("Board") or the Executive
elects not to extend the term of this Agreement further by giving written notice
to the other party in accordance with Section 8 of this Agreement. In the event
that written notice is given. this Agreement shall terminate at the end of the
remaining term of the Agreement.
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(b) During, the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the organization,
operation and management of the Holding Company and its, direct or indirect,
subsidiaries ("Subsidiaries") 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 its
Subsidiaries, or materially affect the performance of Executive's duties
pursuant to this Agreement.
(c) Notwithstanding anything herein contained to the contrary
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. However, Executive shall not perform, in any
respect, directly or indirectly, during the pendency of his temporary or
permanent suspension or termination from the Institution, duties and
responsibilities formerly performed at the Institution as part of his duties and
responsibilities as President and Chief Executive Officer of the Holding
Company.
3. COMPENSATION AND REIMBURSEMENT
(a) The Executive shall be entitled to a salary from the Holding
Company or its Subsidiaries of not less than $200,129 per year ("Base Salary").
Base Salary shall include any amounts of compensation deferred by Executive
under any qualified or unqualified plan maintained by the Holding Company and
its Subsidiaries. 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 Board or by a
Committee of the Board delegated such responsibility by the Board. The
Committee or the Board may increase Executive's Base Salary. The increased
Base Salary shall become the "Base Salary" for purposes of this Agreement. In
addition to the Base Salary provided in this Section 3(a), the Holding Company
shall also provide Executive, at no premium cost to Executive, with all such
other benefits as provided uniformly to permanent full-time employees of the
Holding Company and its Subsidiaries.
(b) The Executive shall be entitled to participate in any 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
and its Subsidiaries will not, without Executive's prior written consent, make
any changes in such plans, arrangements or perquisites which would
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materially adversely affect Executive's rights or benefits thereunder, except to
the extent that such changes are made applicable to all Holding Company and
Institution employees eligible to participate in such plans, arrangements and
perquisites on a non-discriminatory basis. Without limiting the generality of
the foregoing provisions of this Subsection (b), Executive shall be entitled to
participate in or receive benefits under any employee benefit plans including,
but not limited to, retirement plans, supplemental retirement plans, pension
plans, profit-sharing plans, health-and-accident plans, medical coverage or any
other employee benefit plan or arrangement made available by the Holding Company
and its Subsidiaries in the future to its senior executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements. Executive shall be
entitled to incentive compensation and bonuses as provided in any plan of the
Holding Company and its Subsidiaries 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 pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred in the performance of
Executive's 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.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(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 termination governed by Section 5(a) hereof, or for
Cause, as defined in Section 7 hereof, (ii) Executive's resignation from the
Holding Company's employ upon any (A) failure to reappoint Executive as
President and Chief Executive Officer, unless consented to by the Executive, (B)
a material change in Executive's function, duties, or responsibilities with the
Holding Company or its Subsidiaries, 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, unless consented
to by the Executive, (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, unless consented to by the Executive, (D) a material reduction in the
benefits and perquisites to the Executive from those being provided as of the
effective date of this Agreement, unless consented to by the Executive, (E) a
liquidation or dissolution of the Holding Company or the Institution, or (F)
breach of this Agreement by the Holding Company. Upon the occurrence of any
event described in clauses (A), (B), (C), (D) (E)
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or (F), above, Executive shall have the right to elect to terminate his
employment under this Agreement by resignation upon not less than sixty (60)
days prior written notice given within six full calendar months after the event
giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 8, the Holding Company shall be obligated to
pay Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a lump sum payment in amount
equal to the sum of (i) the amount of the remaining payments that the Executive
would have earned if he had continued his employment with the Institution during
the remaining term of this Agreement at the Executive's Base Salary at the Date
of Termination; (ii) the amount equal to the annual contributions that would
have been made on Executive's behalf to any employee benefit plans, programs,
policies or arrangements of the Institution or the Holding Company during the
remaining term of this Agreement based on contributions made (on an annualized
basis) at the Date of Termination; and (iii) the amount of the monthly cost of
operating and maintaining the automobile provided by the Holding Company or the
Institution to the Executive for the remaining term of the Agreement based on
the monthly cost at the Date of Termination. Such payments shall not be reduced
in the event the Executive obtains other employment following termination of
employment.
(c) Upon the occurrence of an Event of Termination, the Holding
Company will cause to be continued life, long term disability, medical, health
and dental coverage substantially equivalent to the coverage that is then
maintained by the Holding Company or its Subsidiaries for Executive and his
eligible dependents immediately prior to his termination as agreed to by the
insurance carrier at no premium cost to the Executive. Such coverage shall
cease upon the expiration of the remaining term of this Agreement.
5. CHANGE IN CONTROL
(a) For purposes of this Agreement, a "Change in Control" of the
Holding Company or the Institution 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 Institution or the Holding Company within the meaning
of the Home Owners' Loan Act of 1933, as amended, the Federal Deposit Insurance
Act, and the Rules and Regulations promulgated by the Office of Thrift
Supervision (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 voting securities of the Institution or the Holding
Company representing 25% or more of the Institution's or the Holding Company's
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outstanding voting securities or right to acquire such securities except for any
voting securities of the Institution purchased by the Holding Company and any
voting securities purchased by any employee benefit plan of the Holding Company
or its Subsidiaries; 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 Company's stockholders was approved by a Nominating Committee solely
composed of members which are Incumbent Board members, 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 Institution or the Holding Company or
similar transaction occurs or is effectuated in which the Institution or Holding
Company is not the resulting entity; provided, however, that such an event
listed above will be deemed to have occurred or to have been effectuated upon
the receipt of all required federal regulatory approvals not including the lapse
of any statutory waiting periods; or (D) a proxy statement shall be 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
Institution 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
Institution or the Holding Company shall be distributed; or (E) a tender offer
is made for 25% or more of the voting securities of the Institution or Holding
Company then outstanding.
(b) If a Change in Control has occurred pursuant to Section 5(a) or
the Board has determined that a Change in Control has occurred, Executive shall
be entitled to the benefits provided in paragraphs (c) and (d) of this Section 5
upon his subsequent termination of employment at any time during the term of
this Agreement due to (i) Executive's dismissal, (ii) Executive's voluntary
resignation following any demotion, loss of title, office or significant
authority or responsibility, reduction in the annual compensation or material
reduction in benefits or (iii) relocation of his 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 his death, or Termination for
Cause.
(c) Upon the Executive's entitlement to benefits pursuant to Section
5(b), the Holding Company shall pay Executive within five business days , or in
the event of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be, as severance pay, a lump sum payment equal to the
greater of: (i) the payments due for the remaining term of the Agreement; or
(ii) three (3) times Executive's average annual compensation for the five (5)
preceding taxable years. Such annual compensation shall include Base Salary,
commissions, bonuses, contributions on behalf of Executive to any pension and
profit sharing plan, severance payments, directors or committee fees and fringe
benefits paid or to be paid to the Executive
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during such years, excluding amounts received by the Executive pursuant to
Section 5(d). Such payments shall not be reduced in the event Executive obtains
other employment following termination of employment.
(d) Upon the Executive's entitlement to benefits pursuant to Section
5(b), the Company will cause to be continued life, medical and dental coverage
substantially equivalent to the coverage that is then maintained by the
Institution for Executive, as agreed to by the insurance carrier, at no premium
cost to Executive prior to his severance. Such coverage and benefits shall
cease upon the expiration of thirty-six (36) months following the Change in
Control. In addition, the Executive will receive payments provided for in
Appendix A.
6. GROSS UP PAYMENTS AND PAYMENTS AND BENEFITS AFTER CHANGE
IN CONTROL
(a) Anything in this Agreement to the contrary or any termination of
this Agreement notwithstanding, in the event that it shall be determined that
any payment or distribution or benefits made or provided by the Holding Company
or its affiliated companies to or for the benefit of the Executive whether
pursuant to this Agreement or otherwise and without regard to any additional
payments under this Section 6 would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest or penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Holding
Company shall pay Executive an additional amount or amounts (each, a "Gross Up
Payment") such that the net amount or amounts retained by Executive, after
deduction of any Excise Tax on any of the above described payments or benefits
and any Federal, state and local income tax and Excise Tax upon payment provided
for by this Section 6, shall be equal to the amount of such payments or benefits
prior to the imposition of such Excise Tax.
(b) All determinations required to be made under this Section 6,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Deloitte & Touche or such successor thereto (the
"Accounting Firm") which shall provide detailed supporting calculations both to
the Holding Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a payment, such earlier time as is
requested by the Holding Company. All fees and expenses of the Accounting Firm
shall be borne solely by the Holding Company. Any Gross-Up Payment, as
determined pursuant to this Section 6, shall be paid by the Holding Company to
the Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Holding Company and the Executive. For purposes of determining the amount
of a Gross Up Payment, Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation (including, but not limited
to, Alternative Minimum Tax) in the calendar year in which the Gross Up Payment
is payable and state and local income taxes at the
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highest marginal rate of taxation in the state and locality of Executive's
residence on the date the Gross Up Payment is payable, net of the maximum
reduction in federal income taxes which could be obtained from any available
deduction of such state and local taxes.
(c) In the event that the amount of the Excise Tax is subsequently
determined to be less than the amount taken into account in calculating a Gross
Up Payment hereunder, Executive shall repay to the Holding Company (to the
extent actually paid to Executive) at the time that the amount of such reduction
in Excise Tax is finally determined, the portion of the Gross Up Payment
attributable to such reduction (plus the portion of the Gross Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross Up Payment being repaid by Executive if such repayment
results in a reduction in, or a refund of, Excise Tax and/or federal and state
and local income tax) plus interest on the amount of such payment at the rate
provided in Section 1274(b)(2) (B) of the Code.
(d) In the event that the amount of the Excise Tax is determined to
exceed the amount taken into account in calculating a Gross Up Payment hereunder
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross Up Payment), the Holding Company shall pay
an additional Gross Up Payment in respect of such excess (plus any interest
payable with respect to such excess) at the time that the amount of such excess
is finally determined.
(e) Each Gross Up Payment shall be paid by the Holding Company on the
date on which Executive becomes entitled to the payment or benefits giving rise
to such Gross Up Payment.
7. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of a
material loss to the Holding Company or one of its Subsidiaries caused by the
Executive's intentional failure to perform stated duties, personal dishonesty,
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses), final cease and desist order or material breach of any
provision of this Agreement. 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 Subsidiaries.
Notwithstanding the foregoing, Executive shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to him 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
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thereof in detail. The Executive shall not have the right to receive
compensation or other benefits for any period after Termination for Cause except
for compensation and benefits already vested. During the period beginning on the
date of the Notice of Termination for Cause pursuant to Section 8 hereof and
through the Date of Termination, stock options and related limited rights
granted to Executive under any stock option plan shall not be exercisable nor
shall any unvested awards granted to Executive under any stock benefit plan of
the Holding Company or any subsidiary or affiliate thereof vest. At the Date of
Termination for Cause, such stock options and related limited rights and
unvested awards shall become null and void and shall not be exercisable by or
delivered to Executive at any time subsequent to such Date of Termination for
Cause.
8. 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) "Date of Termination" shall mean the same date as 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 his full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, Base Salary) and
continue Executive as a participant in all compensation, benefit and insurance
plans in which he 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.
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9. POST-TERMINATION OBLIGATIONS
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for one (1) full year
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Holding Company. 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.
10. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to Section 4 hereof, Executive agrees not to compete with the Holding Company or
its Subsidiaries for a period of one (1) year following such termination in any
city, town or county in which the Executive's normal business office is located
and the Holding Company or any of its Subsidiaries has an office or has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board. Executive agrees that during such period and within
said cities, towns and counties, Executive shall not work for or advise, consult
or otherwise serve with, directly or indirectly, any entity whose business
materially competes with the depository, lending or other business activities of
the Holding Company or its Subsidiaries. The parties hereto, recognizing that
irreparable injury will result to the Holding Company or its Subsidiaries, its
business and property in the event of Executive's breach of this Subsection
10(a) agree that in the event of any such breach by Executive, the Holding
Company or its Subsidiaries, will be entitled, in addition to any other remedies
and damages available, to an injunction to restrain the violation hereof by
Executive, Executive's partners, agents, servants, employees and all persons
acting for or under the direction of Executive. Executive represents and admits
that in the event of the termination of his employment pursuant to Section 7
hereof, Executive's experience and capabilities are such that Executive can
obtain employment in a business engaged in other lines and/or of a different
nature than the Holding Company or its Subsidiaries, and that the enforcement of
a remedy by way of injunction will not prevent Executive from earning a
livelihood. In addition, Executive shall not, for a period of one year after
the termination of this Agreement, engage any person employed by the Holding
Company or its subsidiaries in an employment or contractual relationship with
Executive, Executive's own employer or any other business concern without the
written permission of the Chief Executive Officer of the Holding Company.
Notwithstanding the foregoing, the Executive's obligations under this subsection
10(a) shall terminate upon the occurrence of either of the following events: (i)
a Change in Control or (ii) an Event of Termination. Nothing herein will be
construed as prohibiting the Holding Company or its Subsidiaries from pursuing
any other remedies available to the Holding Company or its Subsidiaries for such
breach or threatened breach, including the recovery of damages from Executive.
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(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Holding Company and
its Subsidiaries as it may exist from time to time, is a valuable, special and
unique asset of the business of the Holding Company and its Subsidiaries.
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
Holding Company and its Subsidiaries thereof to any person, firm, corporation,
or other entity for any reason or purpose whatsoever, unless expressly
authorized by the Board of Directors or required by law. 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 its
Subsidiaries 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.
11. SOURCE OF PAYMENTS
(a) All payments provided in this Agreement shall be timely paid in
cash or check from the general funds of the Holding Company subject to this
Section 11(b).
(b) 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 Employment Agreement dated November 16, 1998,
between Executive and the Institution, such compensation payments and benefits
paid by the Institution (including, but not limited to, any severance payments
made under Sections 4 and 5 of such Employment Agreement) will be subtracted
from any amount due simultaneously to Executive under similar provisions of this
Agreement. Payments pursuant to this Agreement and the Institution 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
Institution on a quarterly basis.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Holding Company
or any predecessor of the Holding Company and Executive (including, but not
limited to, the prior employment agreement dated August 15, 1996, between
Executive and the Holding Company), except that this
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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 him without reference to this Agreement.
13. 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.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Holding Company and their respective successors and assigns.
14. 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.
15. 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.
16. 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.
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17. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware,
unless otherwise specified herein.
18. 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 Institution, in accordance with the
rules of the American Arbitration Association 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 his
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 and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under this
Agreement.
19. PAYMENT OF COSTS AND LEGAL FEES
All reasonable costs and legal fees paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Holding Company, if Executive is successful
pursuant to a legal judgment, arbitration or settlement.
20. INDEMNIFICATION
The Holding Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense and shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under Delaware law against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
13
21. SUCCESSOR TO THE HOLDING COMPANY.
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Institution or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
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SIGNATURES
IN WITNESS WHEREOF, First ▇▇▇▇ 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, on the 22nd
day of February, 1999.
ATTEST: FIRST ▇▇▇▇ BANCORP, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- ----------------------------
Secretary On behalf of the Board of
Directors
WITNESS:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
--------------------------- ----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
15
APPENDIX A
-----------
Upon the Executive's entitlement to benefits pursuant to Section 5(c), the
Executive will receive the following amounts in a lump sum cash payment as soon
as practicable:
(1) An aggregate payment in the amount of $266,964, representing the
value of (a) the maximum matching contribution that the Executive would
have been eligible to receive under the ▇▇▇▇ Federal Savings and Loan
Association of Bellevue 401(k) Plan (the "401(k) Plan"), assuming that the
Executive had remained employed with the Holding Company or the Institution
and participated in the 401(k) Plan during the thirty-six month period
immediately following his Date of Termination, plus (b) the value of the
----
allocations of common stock that the Executive would have been eligible to
receive under the ▇▇▇▇ Federal Savings and Loan Association of Bellevue
Employee Stock Ownership Plan (the "ESOP"), assuming that the Executive had
remained employed with the Holding Company or the Institution and
participated in the ESOP during the thirty-six month period immediately
following his Date of Termination. For purposes of this paragraph (1), it
shall be assumed that the allocations that would have been made to the
Executive under the ESOP are equal in value to the allocation received by
the Executive for the 1997 calendar year. All amounts payable under this
paragraph (1) shall be payable exclusively by the Holding Company outside
of the 401(k) Plan and the ESOP;
(2) An additional Supplemental Retirement Benefit under the ▇▇▇▇
Federal Savings and Loan Association of Bellevue Supplemental Retirement
Plan (the "SERP") based on the benefit formula set forth in the Executive's
Supplemental Retirement Agreement and assuming that (a) the Executive had
remained employed with the Holding Company or the Institution during the
thirty-six month period following his Date of Termination and (b) the
Institution's return on assets is equal to or greater than 1.0 during such
thirty-six month period. Any amounts payable to the Executive under this
paragraph 2 shall be fully vested on his Date of Termination; and
(3) An amount equal to the value of the monthly costs of operating and
maintaining the automobile that the Holding Company or the Institution
provides to the Executive at his Date of Termination multiplied by thirty-
six.
THREE YEAR
FIRST ▇▇▇▇ BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement") is made effective as of November 16,
1998, by and between First ▇▇▇▇ 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 "Institution"
herein shall mean ▇▇▇▇ Federal Savings and Loan Association of Bellevue 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 his employment hereunder, Executive agrees to
serve as Executive Vice President and Chief Financial Officer of the Holding
Company. The Executive shall render administrative and management services to
the Holding Company such as are customarily performed by persons in a similar
executive capacity. During, said period, Executive also agrees to serve, if
elected, as an officer and director of any subsidiary of the Holding Company.
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 and shall continue
for a period of thirty-six (36) full calendar months thereafter. Commencing on
the first anniversary date of this Agreement, and continuing on each anniversary
thereafter, the term of this Agreement shall be extended by an additional year,
such that the remaining term of the Agreement shall be three years, until such
time as the board of directors of the Holding Company ("Board") or the Executive
elects not to extend the term of this Agreement further by giving written notice
to the other party in accordance with Section 8 of this Agreement. In the event
that written notice is given. this Agreement shall terminate at the end of the
remaining term of the Agreement.
2
(b) During the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the organization,
operation and management of the Holding Company and its, direct or indirect,
subsidiaries ("Subsidiaries") 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 its
Subsidiaries, or materially affect the performance of Executive's duties
pursuant to this Agreement.
(c) Notwithstanding anything herein contained to the contrary
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. However, Executive shall not perform, in any
respect, directly or indirectly, during the pendency of his temporary or
permanent suspension or termination from the Institution, duties and
responsibilities formerly performed at the Institution as part of his duties and
responsibilities as Executive Vice President and Chief Financial Officer of the
Holding Company.
3. COMPENSATION AND REIMBURSEMENT.
(a) The Executive shall be entitled to a salary from the Holding
Company or its Subsidiaries of not less than $107,090 per year ("Base Salary").
Base Salary shall include any amounts of compensation deferred by Executive
under any qualified or unqualified plan maintained by the Holding Company and
its Subsidiaries. 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 Board or by a
Committee of the Board delegated such responsibility by the Board. The
Committee or the Board may increase Executive's Base Salary. The increased Base
Salary shall become the "Base Salary" for purposes of this Agreement. In
addition to the Base Salary provided in this Section 3(a), the Holding Company
shall also provide Executive, at no premium cost to Executive, with all such
other benefits as provided uniformly to permanent full-time employees of the
Holding Company and its Subsidiaries.
(b) The Executive shall be entitled to participate in any 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
and its Subsidiaries will not, without Executive's prior
3
written consent, make any changes in such plans, arrangements or perquisites
which would materially adversely affect Executive's rights or benefits
thereunder, except to the extent that such changes are made applicable to all
Holding Company and Institution employees eligible to participate in such plans,
arrangements and perquisites on a non-discriminatory basis. Without limiting the
generality of the foregoing provisions of this Subsection (b), Executive shall
be entitled to participate in or receive benefits under any employee benefit
plans including, but not limited to, retirement plans, supplemental retirement
plans, pension plans, profit-sharing plans, health-and-accident plans, medical
coverage or any other employee benefit plan or arrangement made available by the
Holding Company and its Subsidiaries in the future to its senior executives and
key management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements. Executive
shall be entitled to incentive compensation and bonuses as provided in any plan
of the Holding Company and its Subsidiaries 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 pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred in the performance of
Executive's 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.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(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 termination governed by Section 5(a) hereof, or for
Cause, as defined in Section 7 hereof; (ii) Executive's resignation from the
Holding Company's employ upon any (A) failure to reappoint Executive as
Executive Vice President and Chief Financial Officer, unless consented to by the
Executive, (B) a material change in Executive's function, duties, or
responsibilities with the Holding Company or its Subsidiaries, 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, unless consented to by the Executive, (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, unless consented to by the
Executive, (D) a material reduction in the benefits and perquisites to the
Executive from those being provided as of the effective date of this Agreement,
unless consented to by the Executive, (E) a liquidation or dissolution of the
Holding Company or the Institution, or (F) breach of this Agreement by the
4
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 his employment under this Agreement by resignation upon not less than
sixty (60) days prior written notice given within six full calendar months after
the event giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 8, the Holding Company shall be obligated to
pay Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be a lump sum payment in an amount
equal to the sum of (i) the amount of the remaining payments that the Executive
would have earned if he had continued his employment with the Institution during
the remaining term of this Agreement at the Executive's Base Salary at the Date
of Termination; and (ii) the amount equal to the annual contributions that would
have been made on Executive's behalf to any employee benefit plans of the
Institution or the Holding Company during the remaining term of this Agreement
based on contributions made (on an annualized basis) at the Date of Termination.
Such payments shall not be reduced in the event the Executive obtains other
employment following termination of employment.
(c) Upon the occurrence of an Event of Termination, the Holding
Company will cause to be continued life, long term disability, medical, health
and dental coverage substantially equivalent to the coverage that is then
maintained by the Holding Company or its Subsidiaries for Executive and his
eligible dependents immediately prior to his termination as agreed to by the
insurance carrier at no premium cost to the Executive. Such coverage shall
cease upon the expiration of the remaining term of this Agreement.
5. CHANGE IN CONTROL
(a) For purposes of this Agreement, a "Change in Control" of the
Holding Company or the Institution shall mean an event of a nature that; (i)
would be required to be reported in response to Item l (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 Institution or the Holding Company within the meaning
of the Home Owners' Loan Act of 1933, as amended, the Federal Deposit Insurance
Act, and the Rules and Regulations promulgated by the Office of Thrift
Supervision (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 voting securities of the Institution or the Holding
Company representing 25% or more of the Institution's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting securities of the Institution purchased by the Holding Company and any
voting securities purchased by any
5
employee benefit plan of the Holding Company or its Subsidiaries; 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 Company's stockholders
was approved by a Nominating Committee solely composed of members which are
Incumbent Board members, 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 Institution or the Holding Company or similar transaction occurs
or is effectuated in which the Institution or Holding Company is not the
resulting entity; provided, however, that such an event listed above will be
deemed to have occurred or to have been effectuated upon the receipt of all
required federal regulatory approvals not including the lapse of any statutory
waiting periods; or (D) a proxy statement shall be 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
Institution 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
Institution or the Holding Company shall be distributed; or (E) a tender offer
is made for 25% or more of the voting securities of the Institution or Holding
Company then outstanding.
(b) If a Change in Control has occurred pursuant to Section 5(a) or
the Board has determined that a Change in Control has occurred, Executive shall
be entitled to the benefits provided in paragraphs (c) and (d) of this Section 5
upon his subsequent termination of employment at any time during the term of
this Agreement due to (i) Executive's dismissal, (ii) Executive's voluntary
resignation following any demotion, loss of title, office or significant
authority or responsibility, reduction in the annual compensation or material
reduction in benefits or (iii) relocation of his 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 his death, or Termination for
Cause.
(c) Upon the Executive's entitlement to benefits pursuant to Section
5(b), the Holding Company shall pay Executive within five business days, or in
the event of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be, as severance pay, a lump sum payment equal to the
greater of: (i) the payments due for the remaining term of the Agreement; or
(ii) three (3) times Executive's average annual compensation for the five (5)
preceding taxable years. Such annual compensation shall include Base Salary,
commissions, bonuses, contributions on behalf of Executive to any pension and
profit sharing plan, severance payments, directors or committee fees and fringe
benefits paid or to be paid to the Executive during such years, excluding
amounts received by the Executive pursuant to Section 5(d). Such payments
shall not be reduced in the event Executive obtains other employment following
termination of employment.
6
(d) Upon the Executive's entitlement to benefits pursuant to Section
5(b), the Company will cause to be continued life, medical and dental coverage
substantially equivalent to the coverage that is then maintained by the
Institution for Executive, as agreed to by the insurance carrier, at no premium
cost to Executive prior to his severance. Such coverage and benefits shall
cease upon the expiration of thirty-six (36) months following the Change in
Control. In addition, the Executive will receive the payments provided for in
Appendix A.
6. GROSS UP PAYMENTS AND PAYMENTS AND BENEFITS AFTER CHANGE
IN CONTROL
(a) Anything in this Agreement to the contrary or any termination of
this Agreement notwithstanding, in the event that it shall be determined that
any payment or distribution or benefits made or provided by the Holding Company
or its affiliated companies to or for the benefit of the Executive whether
pursuant to this Agreement or otherwise and without regard to any additional
payments under this Section 6 would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest or penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Holding
Company shall pay Executive an additional amount or amounts (each, a "Gross Up
Payment") such that the net amount or amounts retained by Executive, after
deduction of any Excise Tax on any of the above described payments or benefits
and any Federal, state and local income tax and Excise Tax upon payment provided
for by this Section 6, shall be equal to the amount of such payments or benefits
prior to the imposition of such Excise Tax.
(b) All determinations required to be made under this Section 6,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Deloitte & Touche or such successor thereto (the
"Accounting Firm") which shall provide detailed supporting calculations both to
the Holding Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a payment, such earlier time as is
requested by the Holding Company. All fees and expenses of the Accounting Firm
shall be borne solely by the Holding Company. Any Gross-Up Payment, as
determined pursuant to this Section 6, shall be paid by the Holding Company to
the Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Holding Company and the Executive. For purposes of determining the amount
of a Gross Up Payment, Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation (including, but not limited
to, Alternative Minimum Tax) in the calendar year in which the Gross Up Payment
is payable and state and local income taxes at the highest marginal rate of
taxation in the state and locality of Executive's residence on the date the
7
Gross Up Payment is payable, net of the maximum reduction in federal income
taxes which could be obtained from any available deduction of such state and
local taxes.
(c) In the event that the amount of the Excise Tax is subsequently
determined to be less than the amount taken into account in calculating a Gross
Up Payment hereunder, Executive shall repay to the Holding Company (to the
extent actually paid to Executive) at the time that the amount of such reduction
in Excise Tax is finally determined, the portion of the Gross Up Payment
attributable to such reduction (plus the portion of the Gross Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross Up Payment being repaid by Executive if such repayment
results in a reduction in, or a refund of, Excise Tax and/or federal and state
and local income tax) plus interest on the amount of such payment at the rate
provided in Section 1274(b)(2) (B) of the Code.
(d) In the event that the amount of the Excise Tax is determined to
exceed the amount taken into account in calculating a Gross Up Payment hereunder
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross Up Payment), the Holding Company shall pay
an additional Gross Up Payment in respect of such excess (plus any interest
payable with respect to such excess) at the time that the amount of such excess
is finally determined.
(e) Each Gross Up Payment shall be paid by the Holding Company on the
date on which Executive becomes entitled to the payment or benefits giving rise
to such Gross Up Payment.
7. TERMINATION FOR CAUSE
The term "Termination for Cause" shall mean termination because of a
material loss to the Holding Company or one of its Subsidiaries caused by the
Executive's intentional failure to perform stated duties, personal dishonesty,
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses), final cease and desist order or material breach of any
provision of this Agreement. 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 Subsidiaries.
Notwithstanding the foregoing, Executive shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to him 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
8
for any period after Termination for Cause except for compensation and benefits
already vested. During the period beginning on the date of the Notice of
Termination for Cause pursuant to Section 8 hereof and through the Date of
Termination, stock options and related limited rights granted to Executive under
any stock option plan shall not be exercisable nor shall any unvested awards
granted to Executive under any stock benefit plan of the Holding Company or any
subsidiary or affiliate thereof vest. At the Date of Termination for Cause, such
stock options and related limited rights and unvested awards shall become null
and void and shall not be exercisable by or delivered to Executive at any time
subsequent to such Date of Termination for Cause.
8. 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) "Date of Termination" shall mean the same date as 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 his full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, Base Salary) and
continue Executive as a participant in all compensation, benefit and insurance
plans in which he 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.
9. POST-TERMINATION OBLIGATIONS
9
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for one (1) full year
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Holding Company. 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.
10. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to Section 4 hereof, Executive agrees not to compete with the Holding Company or
its Subsidiaries for a period of one (1) year following such termination in any
city, town or county in which the Executive' s normal business office is located
and the Holding Company or any of its Subsidiaries has an office or has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board. Executive agrees that during such period and within
said cities, towns and counties, Executive shall not work for or advise, consult
or otherwise serve with, directly or indirectly, any entity whose business
materially competes with the depository, lending or other business activities of
the Holding Company or its Subsidiaries. The parties hereto, recognizing that
irreparable injury will result to the Holding Company or its Subsidiaries, its
business and property in the event of Executive's breach of this Subsection
10(a) agree that in the event of any such breach by Executive, the Holding
Company or its Subsidiaries, will be entitled, in addition to any other remedies
and damages available, to an injunction to restrain the violation hereof by
Executive, Executive's partners, agents, servants, employees and all persons
acting for or under the direction of Executive. Executive represents and admits
that in the event of the termination of his employment pursuant to Section 7
hereof, Executive's experience and capabilities are such that Executive can
obtain employment in a business engaged in other lines and/or of a different
nature than the Holding Company or its Subsidiaries, and that the enforcement of
a remedy by way of injunction will not prevent Executive from earning a
livelihood. In addition, Executive shall not, for a period of one year after
the termination of this Agreement, engage any person employed by the Holding
Company or its subsidiaries in an employment or contractual relationship with
Executive, Executive's own employer or any other business concern without the
written permission of the Chief Executive Officer of the Holding Company.
Notwithstanding the foregoing, the Executive's obligations under this subsection
10(a) shall terminate upon the occurrence of either of the following events: (i)
a Change in Control or (ii) an Event of Termination. Nothing herein will be
construed as prohibiting the Holding Company or its Subsidiaries from pursuing
any other remedies available to the Holding Company or its
10
Subsidiaries for such breach or threatened breach, including the recovery of
damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Holding Company and
its Subsidiaries as it may exist from time to time, is a valuable, special and
unique asset of the business of the Holding Company and its Subsidiaries.
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
Holding Company and its Subsidiaries thereof to any person, firm, corporation,
or other entity for any reason or purpose whatsoever, unless expressly
authorized by the Board of Directors or required by law. 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 its
Subsidiaries 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.
11. SOURCE OF PAYMENTS
(a) All payments provided in this Agreement shall be timely paid in
cash or check from the general funds of the Holding Company subject to this
Section 11(b).
(b) 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 Employment Agreement dated November 16, 1998,
between Executive and the Institution, such compensation payments and benefits
paid by the Institution (including, but not limited to, any severance payments
made under Sections 4 and 5 of such Employment Agreement) will be subtracted
from any amount due simultaneously to Executive under similar provisions of this
Agreement. Payments pursuant to this Agreement and the Institution 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
Institution on a quarterly basis.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Holding Company
or any predecessor of
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the Holding Company and Executive (including, but not limited to, the prior
employment agreement dated August 15, 1996, between Executive and the Holding
Company), 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 him without
reference to this Agreement.
13. 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.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Holding Company and their respective successors and assigns.
14. 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.
15. 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.
16. HEADINGS FOR REFERENCE ONLY
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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.
17. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware,
unless otherwise specified herein.
18. 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 Institution, in accordance with the
rules of the American Arbitration Association 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 his
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 and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under this
Agreement.
19. PAYMENT OF COSTS AND LEGAL FEES
All reasonable costs and legal fees paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Holding Company, if Executive is successful
pursuant to a legal judgment, arbitration or settlement.
20. INDEMNIFICATION
The Holding Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense and shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under Delaware law against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Holding Company (whether or
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not he continues to be a director or officer at the time of incurring such
expenses or liabilities), such expenses and liabilities to include, but not be
limited to, judgments, court costs and attorneys' fees and the cost of
reasonable settlements.
21. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Institution or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
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SIGNATURES
IN WITNESS WHEREOF, First ▇▇▇▇ 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, on the 22nd
day of February, 1999.
ATTEST: FIRST ▇▇▇▇ BANCORP, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- -------------------------------------
Secretary On behalf of the Board of Directors
WITNESS:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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APPENDIX A
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Upon the Executive's entitlement to benefits pursuant to Section 5(c), the
Executive will receive the following amounts in a lump sum cash payment as soon
as practicable:
(1) An aggregate payment in the amount of $263,373, representing the
value of (a) the maximum matching contribution that the Executive would
have been eligible to receive under the ▇▇▇▇ Federal Savings and Loan
Association of Bellevue 401(k) Plan (the "401(k) Plan"), assuming that the
Executive had remained employed with the Holding Company or the Institution
and participated in the 401(k) Plan during the thirty-six month period
immediately following his Date of Termination, plus (b) the value of the
----
allocations of common stock that the Executive would have been eligible to
receive under the ▇▇▇▇ Federal Savings and Loan Association of Bellevue
Employee Stock Ownership Plan (the "ESOP"), assuming that the Executive had
remained employed with the Holding Company or the Institution and
participated in the ESOP during the thirty-six month period immediately
following his Date of Termination. For purposes of this paragraph (1), it
shall be assumed that the allocations that would have been made to the
Executive under the ESOP are equal in value to the allocation received by
the Executive for the 1997 calendar year. All amounts payable under this
paragraph (1) shall be payable exclusively by the Holding Company outside
of the 401(k) Plan and the ESOP.