AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement ("Agreement") is
made and entered into on January 31, 2006 by and between First Federal Savings
and Loan Association of Edwardsville (the "Association"), a federally chartered
stock savings association, with its principal place of business at 000 Xx. Xxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, and Xxxxxxxx Xxxxx (the "Executive").
WHEREAS, the Executive is currently employed as the President and Chief
Executive Officer of the Association pursuant to an Executive Employment
Agreement dated June 29, 2004 (the "2004 Agreement");
WHEREAS, the Executive desires to continue his active role as a management
employee of the Association from the date of this Agreement through September
30, 2006 and to provide consulting services to, and continue to receive his
regular salary from, the Association from October 1, 2006 through December 31,
2006; and
WHEREAS, the Executive and the Association desire to amend and restate the
2004 Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual promises set forth in this
Agreement, the parties hereby agree as follows:
1. TERM AND TERMINATION.
(a) The term of this Agreement shall be from the date of this Agreement
through December 31, 2006 or, if earlier, the date of termination of this
Agreement pursuant to the succeeding paragraphs of this Section (the "Term").
The "Active Employment Term" means the period from the date of this Agreement
through September 30, 2006 or the end of the Term, whichever is earlier. The
"Consulting Term" means the portion of the Term after September 30, 2006.
Notwithstanding the foregoing, the Active Employment Term may, at the sole
discretion of the Board of Directors of the Association (the "Board"), be
extended for an additional three months and the Consulting Term may begin after
the expiration of the extended Active Employment Term, so that the term of this
agreement ends on March 31, 2007.
(b) This Agreement shall terminate upon the Executive's death. In the event
of Executive's death during the Term of the Agreement, his estate, legal
representatives, or named beneficiaries (as may be directed by the Executive in
writing) shall be paid Executive's salary at the rate in effect at the time of
Executive's death for a period of six (6) months from the date of the
Executive's death or until the date upon which this Agreement was to terminate
pursuant to Section 2, whichever is earlier, and the Association will continue
to provide medical and other benefits previously provided to Executive's family
during such period at the expense of the Association.
(c) This Agreement shall terminate upon the Executive's disability. For
this purpose, "disability" means the Executive's becoming materially
incapacitated from fully performing Executive's duties under this Agreement
(taking into account reasonable accommodation by the Association to the extent
required by law) by reason of any illness, injury, or any other condition for
any period of time in excess of the paid and unpaid leave to which he may then
be entitled pursuant to the Association's policies as may be in effect from time
to time or by law. Provided, nothing in this paragraph shall limit the
Executive's rights under the Family Medical Leave Act, the Americans with
Disabilities Act, or any other applicable statute.
(d) The Association may terminate this Agreement upon written notice to the
Executive for "Cause." "Cause" means the Executive's personal dishonesty,
incompetence, willful misconduct, any breach of fiduciary duty involving
personal profit, intentional or negligent failure to perform his duties, willful
violation of any law, rule, or regulation (other than minor traffic violations
or similar offenses) or final cease-and-desist order, or material breach of any
provision of this Agreement. In determining incompetence, the acts or omissions
shall be measured against standards generally prevailing in the savings
institution industry. Executive shall not have the right to receive compensation
or other benefits for any period after Termination for Cause. Any stock option
granted to Executive under any stock option plan of the Association, First
Federal Financial Services, Inc. (the "Company"), or any subsidiary or affiliate
of the Association or the Company, shall become null and void effective upon the
termination of this Agreement by the Association for Cause.
2. POSITION AND RESPONSIBILITIES.
(a) Executive will serve as Chief Executive Officer ("CEO") of the
Association, or in such other capacity as the Board may from time to time
reasonably designate, during the Active Employment Term. The Executive shall
cease to be an officer of the Association at the end of the Active Employment
Term.
(b) During the Consulting Term, the Executive shall provide such
consultation and advice as the Board or the Association's officers may from time
to time reasonably request, with such consultation and advice to be rendered by
the Executive at such time or times as are reasonably convenient for him and the
Association, and in no case shall the Executive be required to provide such
services for more than 10 hours per week.
(c) Executive shall be deemed a management employee of the Association
through the end of the Term of this Agreement for purposes of any bonus or
incentive plan then in effect for the Association's management employees.
(d) Notwithstanding anything else in this Agreement, the Association may at
any time during the Term suspend or terminate all of the Executive's duties and
responsibilities and limit or eliminate his powers and duties on behalf of the
Association, but this shall not affect the Association's obligations to pay
Executive his salary hereunder through the termination of this Agreement, except
as may be required under Section 9 of this Agreement.
(e) The Executive shall, both during and after the Term, upon reasonable
notice, furnish such information and assistance to the Association as may
reasonably be required by the Association in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party. In
3
consideration for Executive's assistance if after the Term, the Association
shall compensate Executive at an hourly rate as reasonably determined by the
Board.
3. COMPENSATION AND BENEFITS.
(a) The Association shall pay Executive as compensation for all services to
be required of him a salary equal to $96,036.00 per year through the end of the
Term, which salary shall be pro rated for any part of a year during which this
Agreement is in effect. Such salary shall be payable in accordance with the
Association's regular periodic payroll periods for the payment of its management
employees now in effect or as the Association may reasonably adopt from time to
time.
(b) The Association will provide Executive with employee benefits and allow
him to participate in such retirement, medical, and other benefit plans as are
provided to the Association's management employees generally from time to time
during the Term, subject to the requirements of any such benefit plan or
insurance policy (such as minimum hours of employment required for
participation).
4. OUTSIDE ACTIVITIES.
The Executive may during the term of this Agreement serve as a member of
the board of directors of business, community, and charitable organizations,
subject to the approval of the Board, provided that in each case such service
shall not materially interfere with the performance of his duties under this
Agreement or present any conflict of interest. Such service to and participation
in outside organizations shall be presumed for these purposes to be for the
benefit of the Association, and the Association shall reimburse the Executive
his reasonable expenses associated therewith.
5. WORKING FACILITIES AND EXPENSES.
The Executive's principal place of employment during the Active Employment
Term shall be at the Association's principal offices, and during such period the
Association shall provide the Executive, at his principal place of employment,
with a private office, stenographic services and other support services and
facilities suitable to his position with the Association and necessary or
appropriate in connection with the performance of his duties under this
Agreement. The Association shall reimburse the Executive for his ordinary and
necessary business expenses incurred in connection with the performance of his
duties under this Agreement, including, but not limited to, fees for memberships
in such clubs and organizations that Executive and the Board mutually agree are
necessary and appropriate to further the business of the Association, and travel
and reasonable entertainment expenses. Reimbursement of such expenses shall be
made upon presentation to the Association of an itemized account of the expenses
in such form as the Association may reasonably require.
6. NOTICES.
All notices and communications required or permitted under this Agreement
shall be given, if to the Association, at its principal place of business, and
if to the Executive, at his home address, which he shall provide to Association
and update as necessary, or to any other address either party may specify to the
3
other by written notice pursuant to this Section. Notices shall be deemed given
three (3) business days after placed in the United States mail with postage
prepaid, or when actually received if given in any other manner.
7. NON-COMPETITION.
(a) Executive agrees that he will not Compete (as defined below) anywhere
within the Non-Compete Area (as defined below) at any time during the
Non-Compete Period (as defined below).
(b) For purposes of this Agreement, "Compete," "Competes with,"
"Competing," and similar terms mean to work for or advise, consult with, assist,
or otherwise serve, directly or indirectly, whether as an employee, independent
contractor, director, consultant, owner, or otherwise, any commercial bank, home
savings bank, savings and loan association, credit union, other financial
institution, or other entity whose business materially competes with the
depository, lending, or other business activities of the Association, the
Company, or any other affiliate (but as to affiliates other than the Association
or the Company, only those that are existing and constitute affiliates while
Executive is employed by the Association, the Company, or another affiliate,
whether such employment is pursuant to this Agreement or otherwise).
(c) The "Non-Compete Area" means all of St. Clair County and Madison County
in Illinois. For purposes of this Agreement, Executive's activities during the
Non-Compete Period shall be deemed to be within the Non-Compete Area if (i)
Executive is employed by, consults with, or otherwise assists or serves any
bank, home savings bank, credit union, savings and loan association, or other
financial institution that has an office within Madison or St. Clair Counties in
Illinois, regardless of the location of Executive's principal office, if any,
provided for him by such entity, or (ii) Executive would be deemed to be
Competing in the Non-Compete Area without regard to this sentence. Provided,
however, clause (i) of the preceding sentence shall not apply if Executive is
employed in a state other than Illinois or Missouri. Executive acknowledges and
agrees that the scope of the restriction on Competing as set forth in this
paragraph is reasonable because of the clarity and reduction of the chance of
ambiguity it provides and in view of the ease with which banking business may be
transacted electronically and by other means that would otherwise allow the
spirit and intent of the provisions of this Section 7 to be frustrated.
(d) The "Non-Compete Period" means the time period from the Effective Date
until one (1) year after the later of the termination of this Agreement, or if
Executive is employed by the Association, Company, or another affiliate at any
time after the termination of this Agreement, the termination of Executive's
employment by such affiliate, regardless of the reason for termination and
regardless of whether termination is initiated by Executive or by the
Association, Company, or other affiliate.
(e) Executive agrees that he will not, at any time during the Non-Compete
Period: (i) induce or attempt to induce any person to leave the employ of the
Association, Company, or any other affiliate; or (ii) induce or attempt to
induce any customer or potential customer not to transact business with the
Association, Company, or any other affiliate or to transact business with any
entity that Competes with the Association, Company, or any Affiliate.
4
(f) The restrictions on Executive's activities shall cease to apply and
Executive shall be permitted to Compete without restriction if Executive's
employment is terminated other than for Cause, including the Association giving
Executive a Non-Renewal Notice. The aforementioned restrictions on Executive's
activities shall apply and Executive shall not be permitted to Compete if
Executive gives Association a Non-Renewal Notice or terminates his employment in
breach of this Agreement.
8. CONFIDENTIAL INFORMATION.
(a) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Association, as may
exist from time to time, are valuable, special, and unique assets of the
Association. Executive acknowledges that the business of the Association is
highly competitive and that the Association has provided and will provide
Executive with access to Confidential Information (as defined below) relating to
the business of the Association, the Company, and other Affiliates. Executive
agrees that he will not, during or after Executive's employment has terminated
with the Association, make any disclosure of Confidential Information except (i)
as necessary in the performance of his duties on behalf of the Association or
another Affiliate, (ii) as may be required to be provided to any federal or
state banking agency with jurisdiction over the Association or Executive, or
(iii) as may be required by any court order or lawfully issued subpoena.
Executive also agrees to preserve and protect the confidentiality of each third
party's confidential information (such as, for example, confidential information
of a customer of the Association obtained by Executive in the course of his
employment) to the same extent, and on the same basis, as the Confidential
Information.
(b) For purposes of this Agreement, "Confidential Information" means and
includes the confidential or proprietary information, business and marketing
plans, and trade secrets that have been or are hereafter developed or used by
the Association, the Company, or any other Affiliate and which cannot be
obtained readily by third parties from outside sources. Confidential Information
includes, by way of example and without limitation, the following information
regarding: (i) plans for additional branches, possible locations of future
branches, and the plans for the marketing of business at those branches; (ii)
customers (including, but not limited to, the name, title, and position of the
customer's key personnel with respect to business (of the type conducted with
Association or any other Affiliate, and the specific needs, preferences,
concerns, corporate "personality," and other information about any customer that
is or would be useful in obtaining and maintaining the customer's repeat
business and goodwill); (iii) employees and applicants for employment
(including, but not limited to, educational background, particular skills and
abilities, work history, compensation data, work preferences, home telephone
number, address, current availability, and other information that is useful in
attracting and assessing qualified employee applicants); and (iv) marketing,
financial, and industry information that is not generally known to the public
(including, but not limited to, strategies, financial information, methods, and
proposals).
(c) The provisions of this Section 8 may be enforced by an action for a
temporary restraining order, preliminary injunction, and permanent injunction,
in addition to all other remedies available to the Association in equity or at
law.
5
(d) The terms of this Section 8 shall survive the termination of this
Agreement and the termination of Executive's employment.
9. REGULATORY PROVISIONS.
(a) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) (12 USC ss.1818(e)(3)) or 8(g) (12 USC ss.1818(g))
of the Federal Deposit Insurance Act, as amended by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, the Association's obligations
under this Agreement shall be suspended as of the date of service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the
Association may in its discretion (i) pay the Executive all or part of the
compensation withheld while their contract obligations were suspended and (ii)
reinstate (in whole or in part) any of the obligations which were suspended.
(b) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order issued
under Section 8(e) 12 ss.1818(e)) or 8(g) (12 USC ss.1818(g)) of the Federal
Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, all obligations of the Association under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(c) If the Association is in default as defined in Section 3(x) (12 USC ss.
1813(x)(1)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Association under this Agreement shall terminate as of the date of default,
but this paragraph shall not affect any vested rights of the contracting
parties.
(d) All obligations of the Association under this Agreement shall be
terminated, except to the extent determined that continuation of the Agreement
is necessary for the continued operation of the Association, (i) by the Federal
Deposit Insurance Corporation ("FDIC"), at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Association under the
authority contained in Section 13(c) (12 USC ss.1813(c)) of the Federal Deposit
Insurance Act, as amended by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989; or (ii) when the Association is determined by the FDIC
to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Notwithstanding anything herein contained to the contrary, any payments
to the Executive by the Association, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the
regulations promulgated thereunder in 12 C.F.R. Part 359.
10. 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 the execution,
attachment, levy, or similar process or assignment by operation of law, any
6
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 Association and their respective successors and assigns,
provided that Executive may not assign any of his rights or obligations
hereunder except the right to receive money.
11. ENTIRE AGREEMENT; MODIFICATION; WAIVER.
(a) This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supercedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof, including the 2004 Agreement.
(b) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(c) 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 executed by the party charged
with such 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.
12. RELEASE OF CLAIMS.
(a) The Executive on behalf of himself, his heirs, executors, trustees,
administrators, successors, and assigns, past and present, and anyone claiming
through or under them, hereby releases and forever discharges the Association,
the Company, and all of their related, affiliated, subsidiary, and predecessor
companies, and their past and present shareholders, directors, officers,
employees, agents, and assigns (collectively, the "Association Affiliates"), of
and from any and all claims, charges, demands, damages, and suits of every kind
and nature whatsoever, whether by common law or by statute, foreseen or
unforeseen, known or unknown, which the Executive has or may have against any of
them as of the date of this Agreement, including, but not limited to, those
arising out of the Executive's employment by the Association; any breach of an
express or implied contract of employment between the Executive and the
Association; any claim of unjust or tortious discharge (including any claim of
fraud, negligence, or intentional infliction of emotional distress); any claims
of violations arising under the Civil Rights Act of 1964, 42 U.S.C. ss.2000e et
seq., the Age Discrimination in Employment Act, 29 U.S.C. ss.621 U seq., the
Fair Labor Standards Act of 1938, 29 U.S.C. ss.201 et seq., the Rehabilitation
Act of 1973, 29 U.S.C. ss.701 et seq., and any and all other federal, state, or
local statutes, laws, and ordinances.
(b) The Executive further agrees that he will not file suit or otherwise
submit any other charge, claim, complaint, or action of any nature whatsoever to
any governmental agency, court, organization, or judicial forum (nor will he
permit any person, group of persons, or organization to take such action on his
behalf) against the Association or any of the Association Affiliates arising out
of any actions or non-actions that have occurred on the part of the Association
7
or any of the Association Affiliates at any time prior to the date of or in
connection with this Agreement.
(c) Nothing herein shall limit the Executive's rights against the
Association for any breach of this Agreement after the date hereof.
13. SURVIVAL OF OBLIGATIONS.
Every term of this Agreement that provides for a party to perform or
refrain from performing any act after the end of the Term shall survive the
termination of this Agreement. Those terms include, but are not limited to, the
provisions of Sections 2(e), 7, 8, and 12.
14. 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 fullest extent be consistent
with law continue in full force and effect.
15. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning of interpretation of
any of the provisions of this Agreement.
16. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Illinois but
only to the extent not superceded by federal law, and provided that any
arbitration proceeding shall be governed by the Federal Arbitration Act.
17. ARBITRATION.
(a) Any dispute arising under or in connection with this Agreement or
Executive's employment by Association or the Company shall be resolved pursuant
to arbitration, provided that nothing herein shall prevent either party from
seeking a temporary restraining order, preliminary injunction, permanent
injunction, or other equitable relief for breach or threatened breach by the
other party of any of the terms of this Agreement. All other disputes, including
all disputes for money damages, shall be resolved by arbitration.
(b) The arbitration shall be conducted before an arbitrator selected by
agreement of the parties, and if the parties fail to agree on an arbitrator
within 10 days of any party informing another that a dispute exists and
therewith making a demand for arbitration, by the American Arbitration
Association ("AAA") in accordance with its rules for selecting an arbitrator.
8
(c) The arbitration shall be conducted at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxxxx, Xxxxxxxx, or such other place in Madison County, Illinois as
Association may designate.
(d) The arbitration shall be conducted in accordance with the AAA's then
effective arbitration rules. The arbitrator shall have all of the powers, both
in law and in equity that would be available to a court having jurisdiction over
the parties and over the subject matter of the dispute, but not the power to
award punitive damages. Such powers shall include, but shall not be limited to,
the power to require specific performance. Judgment upon an award in arbitration
may be entered in any court. The parties agree that the determination of any
dispute that may arise is essential and agree to seek speedy processing of any
dispute by the arbitrator.
18. INDEMNIFICATION.
During the term of this Agreement and for a period of (1) year thereafter,
the Association shall provide Executive at its expense (including his heirs,
executors, and administrators) with coverage under the same standard directors
and officers liability insurance policy provided to its directors and officers,
if any, and shall indemnify Executive (and his heirs, executors, and
administrators) to the fullest extent permitted under federal 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 Association (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
limited to, judgment, court costs and attorney's fees and the cost of reasonable
settlements (such settlements must be approved by the Board). If such action,
suit, or proceeding is brought against Executive in his capacity as an officer
or director of the Association, however, such indemnification shall not extend
to matters as to which Executive is finally adjudged to be liable for willful
misconduct in the performance of his duties.
19. SUCCESSOR TO THE ASSOCIATION.
The Association shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business assets of the Association or the Company,
expressly and unconditionally to assume and agree to perform the Association's
obligations under this Agreement, in the same manner and to the same extent that
the Association would be required to perform if no such succession or assignment
had taken place.
20. EXECUTIVE'S POWER TO REVOKE; TIME TO CONSIDER.
(a) This instrument constitutes an irrevocable offer by the Association
during the 21 days after its execution by the Association and delivery to the
Executive. The Executive's execution of this Agreement and delivery of it to the
Association at anytime within 21 days thereafter shall make this Agreement
effective and binding on both parties, subject to the terms of paragraph (b) of
this Section.
(b) The parties further agree and understand that the Executive may revoke
his acceptance of this Agreement (other than the provisions of Sections 7, 8,
11, 12, 13, 17, 18, 19, and this Section 21) at any time within seven (7) days
9
after signing it. The Executive's notice of revocation must be in writing and
received by an officer (other than the Executive) of the Association at the
Association's principal place of business within seven (7) days after the
Executive signs this Agreement. If the Executive so revokes this Agreement
within seven (7) days of signing it, the Executive's employment by the
Association shall immediately terminate and the parties shall have no further
obligations to each other whatsoever, except as provided in Sections 7, 8, 11,
12, 13, 17, 18, 19, and this Section 21 of this Agreement. If the Executive does
not revoke this Agreement within seven (7) days after signing it, this
Agreement's effectiveness shall become final and binding on both parties on the
8th day after the Executive signs it.
(c) The Executive acknowledges that he is voluntarily entering into this
Agreement after advice from independent counsel and understands all of its terms
and effects, including that after it becomes final he will not have any right to
bring any claim against the Association with respect to his employment or for
any other reason.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
ATTEST: FIRST FEDERAL SAVINGS AND
LOAN ASSOCIATION OF
EDWARDSVILLE
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ -----------------------------------
Secretary Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board
EXECUTIVE:
/s/ Xxxxxxxx Xxxxx
---------------------------------------
Xxxxxxxx Xxxxx
