EXHIBIT 10.5
FIRST LINCOLN BANCSHARES INC.
EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement") is made effective as of______________, 1998 by
and between First Lincoln Bancshares Inc. (the "Holding Company"), a corporation
organized under the laws of Delaware with its principal offices at 00/xx/ xxx X
Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000 and Xxxxxxx X. Xxxxxxxxx (the "Executive").
Any reference to the "Bank" herein shall mean First Federal Lincoln Bank or any
successor thereto.
WHEREAS, the Holding Company wishes to assure itself of the services of the
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 the Executive's employment hereunder, the 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, the Executive also agrees to serve, if elected,
as President and Chief Executive Officer of any subsidiary of the Holding
Company other than First Federal Lincoln Bank-Iowa. During the term of this
Agreement, the Holding Company agrees (a) to elect the Executive to the Board of
Directors of the Bank and (b) to nominate the Executive for election to the
Board of Directors of the Holding Company and the Executive agrees to serve in
such capacity. The Executive's principal place of employment shall be 00/xx/
xxx X Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000.
2. TERMS.
(a) The period of the Executive's employment under this Agreement shall
commence as of the date first above written and shall continue for a period of
thirty-six (36) full calendar months thereafter. Commencing on the date of the
execution of this Agreement, the term of this Agreement shall be extended for
one day each day until such time as the board of directors of the Holding
Company (the "Board") or the Executive elects not to extend the term of the
Agreement by giving written notice to the other party in accordance with Section
8 of this Agreement, in which case the term of this Agreement shall be fixed and
shall end on the third anniversary of the date of such written notice.
(b) During the period of the Executive's employment hereunder, except for
periods of absence occasioned by illness, vacation periods, and leaves of
absence, the 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 (the "Subsidiaries") and participation in community, professional
and civic organizations. The 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 will not present any conflict of interest with the Holding
Company or the Subsidiaries, or materially affect the performance of the
Executive's duties pursuant to this Agreement.
(c) Notwithstanding anything herein to the contrary, the Executive's
employment with the Holding Company may be terminated by the Holding Company or
the Executive during the term of this Agreement, subject to the terms and
conditions of this Agreement. Moreover, in the event the Executive is
terminated or suspended from his position with the Bank, the Executive shall not
perform, in any respect, directly or indirectly, during the pendency of his
temporary or permanent suspension or termination from the Bank, duties and
responsibilities formerly performed at the Bank as part of his duties and
responsibilities as President and Chief Executive Officer of the Holding
Company.
3. COMPENSATION AND REIMBURSEMENT.
The Executive shall receive compensation and reimbursement under this
Agreement, as follows:
(a) The Executive shall be entitled to a salary from the Holding Company or
the Subsidiaries of $350,000 per year ("Base Salary"), payable in accordance
with the normal payroll practices of the Bank, but not less frequently than
monthly. Base Salary shall include any amounts of compensation deferred by the
Executive under any tax-qualified retirement or welfare benefit plan or any
other deferred compensation arrangement. During the period of this Agreement,
the Executive's Base Salary shall be reviewed by the Board at least annually,
with the Board making its first review no later than one year from the date of
this Agreement. The Board may increase the Executive's Base Salary at any time
during the term of this Agreement and the resulting annual salary attributable
to such increase shall become the "Base Salary" for purposes of this Agreement
from the date of such increase.
(b) Discretionary Bonuses. The Executive shall be entitled to participate
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in an equitable manner with all other executive officers of the Holding Company
in discretionary bonuses as authorized by the Board to executive employees. No
other compensation provided for in this Agreement shall be deemed a substitute
for the Executive's right to participate in such bonuses when and as declared by
the Board.
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(c) The Executive shall be entitled to receive fees for serving as a
director of the Holding Company and/or the Bank or as a member of any committee
as received by other members of the Boards of Directors of the Holding Company
and/or the Bank.
(d) The Executive shall be entitled to participate in any employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
the Executive was participating or with respect to which the Executive was
deriving a benefit immediately prior to the beginning of the term of this
Agreement, and the Holding Company and the Subsidiaries will not, without the
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites which would adversely affect the Executive's rights or benefits
thereunder, except to the extent that such changes are made applicable to all
employees participating in such plans, arrangements, or perquisites on a non-
discriminatory basis. Without limiting the generality of the foregoing
provisions of this Subsection (d), the Executive shall be entitled to
participate in and receive benefits under all plans relating to stock options,
restricted stock awards, stock purchases, pension, thrift, profit-sharing,
employee stock ownership, supplemental retirement, group life insurance, medical
and other health and welfare benefit coverage, education, cash or stock bonuses,
and other retirement or employee benefits or combinations thereof, that are now
or hereafter maintained for the benefit of the Holding Company's and
Subsidiaries' executive employees or employees generally. Further, with respect
to any plan regarding stock options, restricted stock awards, and stock
purchases, the Executive shall be entitled to receive benefits in an equitable
manner with all other executive officers, taking into consideration the
Executive's positions with the Holding Company and the Subsidiaries. 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.
(e) The Holding Company shall pay or reimburse the Executive for all
reasonable travel and other expenses incurred in the performance of the
Executive's obligations under this Agreement.
4. PAYMENTS TO THE EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) The provisions of this Section shall apply upon the occurrence of an
Event of Termination (as herein defined) during the term of this Agreement. 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 the
Executive's full-time employment hereunder for any reason other than termination
governed by Section 5(a) hereof, or Termination for Cause, as defined in Section
7 hereof; (ii) the Executive's resignation from the Holding Company's employ,
upon, any (A) failure to elect or reelect or to appoint or reappoint the
Executive as President and Chief Executive Officer, unless consented to by the
Executive, (B) material change in the Executive's functions, duties, or
responsibilities with the Holding Company or its Subsidiaries, which change
would cause the Executive's position to become one of lesser responsibility,
importance, or scope than the position described in Section 1 unless consented
to by the Executive, (C) relocation of the Executive's principal place of
employment by more than 25 miles from its location at the effective date of this
Agreement, unless consented to by the
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Executive, (D) 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) liquidation or dissolution of the
Holding Company or the Bank, or (F) breach of this Agreement by the Holding
Company. Upon the occurrence of any Event of Termination, the Executive shall
have the right to elect to terminate his employment under this Agreement by
resignation upon not less than thirty (30) days prior written notice given
within six full calendar months after the Event of Termination.
(b) Upon the occurrence of an Event of Termination, on the "Date of
Termination", as defined in Section 8, the Holding Company shall pay or provide
to the Executive, or, in the event of his death subsequent to the Event of
Termination, his beneficiary or beneficiaries, or his estate, as the case may
be, the following: (i) the Base Salary and bonuses in accordance with Sections
3(a) and 3(b), respectively, that would have been paid to the Executive for the
remaining term of this Agreement had the Event of Termination not occurred, plus
the value, as calculated by a recognized firm customarily performing such
valuations, of any stock options or related rights which, as of the Date of
Termination, have been granted to the Executive but are not exercisable by the
Executive and the value of any restricted stock or related rights which have
been granted to the Executive but in which the Executive does not have a non-
forfeitable or fully-vested interest as of the Date of Termination; and (ii) all
benefits, including health insurance, in accordance with Section 3(d), that
would have been provided to the Executive for the remaining term of this
Agreement had the Event of Termination not occurred. At the election of the
Executive, which election is to be made prior to an Event of Termination, such
payments shall be made in a lump sum. In the event that no election is made,
payment to the Executive will be made on a monthly basis in approximately equal
installments during the remaining term of the Agreement.
(c) Upon the occurrence of an Event of Termination, the Holding Company
will cause to be continued life, medical, dental and disability coverage
substantially equivalent to the coverage maintained by the Holding Company or
its Subsidiaries for the Executive prior to his termination at no premium cost
to the Executive. Such coverage shall cease upon the expiration of the
remaining term of this Agreement, unless otherwise provided for in a separate
agreement entered into by the Executive and the Bank or the Holding Company.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the Holding
Company or the Bank 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 0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in
Control of the Bank or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933, 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
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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 Bank or the Holding Company representing
20% or more of the Bank's or the Holding Company's outstanding voting securities
or right to acquire such securities except for any voting securities of the Bank
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 Bank or the Holding Company or similar transaction occurs or is
effectuated in which the Bank 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 has been distributed soliciting proxies from
stockholders of the Holding Company, by someone other than the current
management of the Holding Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Holding Company or Bank with one
or more corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Bank or the
Holding Company shall be distributed, or (E) a tender offer is made for 20% or
more of the voting securities of the Bank or Holding Company then outstanding.
(b) If a Change in Control has occurred pursuant to Section 5(a) or the
Board has determined that a Change in Control has occurred, the Executive shall
be entitled to the benefits provided in paragraphs (c) and (d), of this Section
5.
(c) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Holding Company shall pay or provide to the Executive, or in the event of
his subsequent death, his beneficiary or beneficiaries, or his estate, as the
case may be, the greater of: (i) the Base Salary and bonuses in accordance with
Sections 3(a) and 3(b), respectively, that would have been paid to the Executive
for the remaining term of this Agreement had the event described in subsection
(b) of this Section 5 not occurred, plus the value, as calculated by a
recognized firm customarily performing such valuations, of any stock options or
related rights which, as of the Date of Termination have been granted to the
Executive but are not exercisable by the Executive and the value of any
restricted stock or related rights which have been granted to the Executive but
in which the Executive does not have a non-forfeitable or fully-vested interest
as of the Date of Termination, and all benefits, including health insurance, in
accordance with Section 3(d) that would have been paid to the Executive for the
remaining term of this Agreement had the event
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described in subsection (b) of this Section 5 not occurred; or (ii) three (3)
times the Executive's Average Annual Compensation (as herein defined) for the
five (5) preceding taxable years. Such Average Annual Compensation shall include
all taxable income paid by the Holding Company or the Subsidiaries, including
but not limited to, Base Salary, commissions and bonuses, as well as
contributions on behalf of the 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. At the election of the Executive,
which election is to be made prior to a Change in Control, such payment shall be
made in a lump sum. In the event that no election is made, payment to the
Executive will be made on a monthly basis in approximately equal installments
during the remaining term of the Agreement.
(d) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Company will cause to be continued life, medical, dental and disability
coverage substantially equivalent to the coverage maintained by the Bank for the
Executive at no premium cost to the Executive prior to his severance. Such
coverage and payments shall cease upon the expiration of sixty (60) months
following the Change in Control, unless otherwise provided for in a separate
agreement entered into by the Executive and the Bank or the Holding Company.
6. CHANGE OF CONTROL RELATED PROVISIONS.
In each calendar year that the Executive is entitled to receive payments or
benefits under the provisions of this Employment Agreement, the Holding Company
shall determine if an excess parachute payment (as defined in Section 4999 of
the Internal Revenue Code of 1986, as amended, and any successor provision
thereto, (the "Code")) exists. Such determination shall be made after taking
any reductions permitted pursuant to Section 280G of the Code and the
regulations thereunder. Any amount determined to be an excess parachute payment
after taking into account such reductions shall be hereafter referred to as the
"Initial Excess Parachute Payment". As soon as practicable after a Change in
Control, the Initial Excess Parachute Payment shall be determined. Upon the
Date of Termination following a Change in Control, the Holding Company shall pay
the Executive, subject to applicable withholding requirements under applicable
state or federal law, an amount equal to:
(1) twenty (20) percent of the Initial Excess Parachute Payment (or such
other amount equal to the tax imposed under Section 4999 of the Code);
and
(2) such additional amount (tax allowance) as may be necessary to
compensate the Executive for the payment by the Executive of state and
federal income and excise taxes on the payment provided under clause
(1) and on any payments under this Clause (2). In computing such tax
allowance, the payment to be made under Clause (1) shall be multiplied
by the "gross up percentage" ("GUP"). The GUP shall be determined as
follows:
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Tax Rate
GUP = __________
1- Tax Rate
The "Tax Rate" for purposes of computing the GUP shall be the sum of
the highest marginal federal and state income and employment-related
tax rates, including any applicable excise tax rates, applicable to
the Executive in the year in which the payment under Clause (1) is
made.
(3) Notwithstanding the foregoing, if it shall subsequently be
determined in a final judicial determination or a final administrative
settlement to which the Executive is a party that the excess parachute payment
as defined in Section 4999 of the Code, reduced as described above, is more than
the Initial Excess Parachute Payment (such different amount being hereafter
referred to as the "Determinative Excess Parachute Payment") then the Holding
Company's independent accountants shall determine the amount (the "Adjustment
Amount") the Holding Company must pay to the Executive in order to put the
Executive in the same position as the Executive would have been if the Initial
Excess Parachute Payment had been equal to the Determinative Excess Parachute
Payment. In determining the Adjustment Amount, independent accountants of the
Holding Company shall take into account any and all taxes (including any
penalties and interest) paid by or for the Executive or refunded to the
Executive or for the Executive's benefit. As soon as practicable after the
Adjustment Amount has been so determined, the Holding Company shall pay the
Adjustment Amount to the Executive. In no event however, shall the Executive
make any payment under this paragraph to the Holding Company.
7. TERMINATION FOR CAUSE OR IN THE EVENT OF DEATH OR DISABILITY
(a) The term "Termination for Cause" shall mean termination because of the
Executive's personal dishonesty, willful misconduct, any breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
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. Notwithstanding the foregoing, the 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 the 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, the Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail. The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. During the period beginning on the
date of the Notice of Termination for Cause pursuant to Section 8 hereof through
the Date of Termination, stock options and related limited rights granted to the
Executive under
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any stock benefit plan of the Bank, the Holding Company or any subsidiary or
affiliate thereof, vest. At the Date of Termination, such stock options and
related limited rights and any such unvested awards shall become null and void
and shall not be exercisable by or delivered to the Executive at any time
subsequent to such Termination for Cause.
(b) The Executive's employment shall terminate automatically upon the
Executive's death during the term of this Agreement. If the Holding Company
determines in good faith that the "Disability" (as defined below) of the
Executive has occurred, it may give to the Executive written notice in
accordance with Section 8 of its intention to terminate this Agreement. In such
event, the Executive's employment with the Holding Company shall terminate
effective on the 30/th/ day after receipt of the notice by the Executive,
provided that, within 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" means a condition, resulting from bodily injury or
disease or mental impairment that renders, and for a six consecutive month
period has rendered, the Executive unable to perform his duties under this
Agreement. Disability shall be determined by a physician or group of physicians
selected by the Holding Company or its insurance carriers and acceptable to the
Executive or the Executive's legal representative. If the employment of the
Executive under this Agreement shall terminate because of death or Disability,
the Holding Company shall pay to the Executive or the Executive's estate or
representative, as the case may be, the Base Salary and discretionary bonus for
the fiscal year in which the termination occurs, prorated for the number of
weeks during which the Executive was employed by the Holding Company during such
fiscal year. In addition, the Executive or his designated beneficiary, as the
case may be, shall receive such amounts as are provided for in the disability
policy or life insurance policy provided by the Holding Company for the benefit
of the Executive; provided, further, that the Executive shall be provided with
coverage under a disability policy that will provide him with payments that
would have at least equaled those made under this Agreement for the term of the
Agreement had the Executive not incurred a Disability.
8. NOTICE.
(a) Any purported termination by the Holding Company or by the 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 the Executive's employment under
the provision so indicated.
(b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the occurrence of a
Change in Control and voluntary termination by the
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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 the 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 him 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.
(a) All payments and benefits to the Executive under this Agreement shall
be subject to the Executive's compliance with this Section 9 for one (1) full
year after the earlier of the expiration of this Agreement or termination of the
Executive's employment with the Holding Company. The 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.
(b) The Executive shall not be required to mitigate the amount of any
salary or other payment or benefit provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits after the date of termination or otherwise.
10. NON-COMPETITION AND NON-DISCLOSURE.
(a) Upon any termination of the Executive's employment hereunder pursuant
to Section 4 hereof, the 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. The Executive
agrees that during such period and within said cities, towns and counties, the
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 the Executive's breach of this Subsection
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10(a) agree that in the event of any such breach by the 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 the
Executive, the Executive's partners, agents, servants, employees and all persons
acting for or under the direction of the Executive. The Executive represents and
admits that in the event of the termination of his employment pursuant to
Section 7 hereof, the Executive's experience and capabilities are such that the
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 the Executive from
earning a livelihood. 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 the Executive.
(b) The 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. The
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,
the 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 the 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 the 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 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 the Executive under the Employment Agreement dated_______________,
1998, between the Executive and the Bank, such compensation payments and
benefits paid by the Bank will be subtracted from any amount due simultaneously
to the Executive under similar provisions of this Agreement. Payments pursuant
to this Agreement and the Executive's employment agreement entered into with the
Bank on October 27, 1993, and as amended from time to time ("Bank Agreement")
shall be
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allocated in proportion to the level of activity and the time expended on such
activities by the Executive as determined by the Holding Company and the Bank on
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 and
the Executive, except that this Agreement shall not amend, terminate, impact or
affect or operate to reduce any provision of the Bank Agreement, or other
agreement incorporated in the Bank Agreement or any benefit or compensation
inuring to the Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that the 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, the
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.
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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.
17. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Nebraska,
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 Bank, in accordance with the
Commercial Arbitration Rules of the Arbitration American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that the 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
the Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the 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 the
Executive under this Agreement.
19. PAYMENT OF LEGAL FEES.
All reasonable legal fees paid or incurred by the Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Holding Company, if the Executive is successful pursuant to
a legal judgment, arbitration or settlement.
20. INDEMNIFICATION.
(a) The Holding Company shall provide the Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense and shall indemnify the
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
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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.
(b) Any payments made to the Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R.
Part 359 and any rules or regulations promulgated thereunder.
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 Bank 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 Lincoln Bancshares Inc. has caused this Agreement
to be executed and its seal to be affixed hereunto by its duly authorized
officer and its directors, and the Executive has signed this Agreement, on the
_______ day of _________, 1998.
ATTEST: FIRST LINCOLN BANCSHARES INC.
________________________ By: ____________________________
Xxxxxxxx X. Xxxxx XxXxxx X. Xxxxxxxxxx
Secretary Chairman
For the Entire Board of Directors
[SEAL]
WITNESS:
________________________ By: ____________________________
Xxxxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxxxx
Secretary Executive
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