EMPLOYMENT AGREEMENT OF BRAD S. RENCH
EXHIBIT
10.7
EMPLOYMENT
AGREEMENT OF XXXX X. XXXXX
EMPLOYMENT
AGREEMENT
This
Agreement is made by and between First Clover Leaf Bank, a federal savings bank
(the “Bank”), with its principal office in Edwardsville, Illinois, and Xxxx X.
Xxxxx (“Executive”) and is effective as of January 1, 2010 (the “Effective
Date”). References herein to the “Company” mean First Clover Leaf Financial
Corp., a Maryland corporation that owns 100% of the common stock of the Bank on
the Effective Date. The Company is a signatory to this Agreement for
the sole purpose of guaranteeing the Bank’s performance hereunder.
WHEREAS, the parties hereto
desire to set forth the terms of the Agreement and the continuing employment
relationship between the Bank and Executive.
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.
Executive
shall serve as the Chief Operating Officer of the Bank. In this position,
Executive shall be responsible for supporting the Chief Executive Officer in
areas of leadership, direction, development and implementation of the policies
and procedures of the Bank. Executive shall be responsible for
building and maintaining Bank relationships with the community, civic groups and
local businesses, and will represent the Bank at related
events. Executive shall stay abreast of regulations and legislation
that directly affect the Bank. Executive also agrees to serve, if appointed or
elected, as an officer and director of any subsidiary or affiliate of the
Bank.
2.
TERM AND DUTIES.
(a) The
term of this Agreement and the period of Executive’s employment hereunder will
begin as of the Effective Date and continue for a period of twelve (12) full
calendar months thereafter. Commencing on the first anniversary date
of this Agreement (the “Anniversary Date”), and continuing at each Anniversary
Date thereafter, the Agreement shall renew for an additional year such that the
remaining term shall be twelve (12) full calendar months; provided, however,
that the Board of Directors of the Bank (the “Board”) shall, at least sixty (60)
days before such Anniversary Date conduct a comprehensive performance evaluation
and review of Executive for purposes of determining whether to extend
this Agreement. The Board shall give Executive notice of
its decision whether or not to renew this Agreement at least thirty (30) days
and not more than sixty (60) days prior to the Anniversary Date, and if written
notice of non-renewal is provided to Executive within said time
frame, the term of this Agreement shall not be extended.
(b) During
the period of his employment hereunder, except for periods of absence occasioned
by illness, reasonable vacation periods, and reasonable leaves of absence
approved by the Chief Executive Officer, 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 Bank; provided, however, that,
with the approval of the Board, Executive may serve, or continue to serve, on
the
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boards of
directors of, and hold any other offices or positions in, business, social,
religious, charitable or similar organizations which, in the Board’s judgment,
will not present any conflict of interest with the Bank, or materially affect
the performance of Executive’s duties pursuant to this Agreement.
Notwithstanding the preceding sentence, no approval is required for Executive to
participate or serve in (i) outside organizations in which Executive is serving
as of the Effective Date; (ii) religious or educational organizations which
Executive or Executive’s children may attend from time to time; or (iii)
affiliates of such organizations.
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3.
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COMPENSATION,
BENEFITS AND REIMBURSEMENT.
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(a) The
compensation specified under this Agreement shall constitute the salary and
benefits paid for the duties described in Section 2(b). Beginning on
the Effective Date, the Bank shall pay Executive as compensation a salary of not
less than one hundred seventy four thousand Dollars ($174,000) per year (“Base
Salary”). Such Base Salary shall be payable bi-weekly, or with such
other frequency as officers and employees are generally paid. During
the period of this Agreement, Executive’s Base Salary shall be reviewed at least
annually. Such review shall be conducted by the Chief Executive
Officer, and the Bank may increase, but not decrease (except a decrease that is
generally applicable to all employees) Executive’s Base Salary (with any
increase in Base Salary to become “Base Salary” for purposes of this
Agreement). In addition to the Base Salary, the Bank shall provide
Executive at no cost to Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Bank. Base Salary
shall include any amounts of compensation deferred by Executive under qualified
and nonqualified plans maintained by the Bank.
(b) Executive
will 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
insurance plans, medical coverage or any other employee benefit plan or
arrangement made available by the Bank or the Company 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 will be entitled to participate in any
incentive compensation and bonus plans offered by the Bank or the Company in
which Executive is eligible to participate. Nothing paid to Executive
under any such plan or arrangement will be deemed to be in lieu of other
compensation to which Executive is entitled under this Agreement.
(c) In
addition to the Base Salary, the Bank shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by Executive performing
his obligations under this Agreement and may provide such additional
compensation in such form and such amounts as the Chief Executive Officer may
from time to time determine. The Bank shall reimburse Executive for
his ordinary and necessary business expenses, including, without limitation,
fees for memberships in such clubs and organizations as Executive and the Chief
Executive Officer shall mutually agree are necessary and appropriate for
business purposes, and travel and entertainment expenses, incurred in connection
with the performance of his duties under this Agreement.
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4.
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PAYMENTS
TO EXECUTIVE UPON AN EVENT OF
TERMINATION.
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(a) Upon
the occurrence of an Event of Termination (as herein defined) during Executive’s
term of employment under this Agreement, the provisions of this Section 4
shall apply. As
used in this Agreement, an “Event of Termination” shall mean and include any of
the following:
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(i)
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the
termination by the Bank of Executive’s full-time employment hereunder for
any reason other than termination governed by Section 5 (Termination
for Cause) or termination governed by Section 6 (termination due to
Disability or death); or
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(ii)
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Executive’s
resignation from the Bank’s employ for any of the following
reasons:
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(A)
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the
failure to appoint or reappoint Executive to the position set forth under
Section 1;
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(B)
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a
material change in Executive’s functions, duties, or responsibilities with
the Bank, 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;
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(C)
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a
relocation of Executive’s principal place of employment by more than
thirty (30) miles from its location at the Effective Date of this
Agreement;
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(D)
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a
material reduction in the benefits and perquisites to Executive from those
being provided as of the later of the Effective Date or any subsequent
Anniversary Date of this Agreement, other than an employee-wide reduction
in pay or benefits;
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(E)
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a
liquidation or dissolution of the Company or the Bank;
or
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(F)
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a
material breach of this Agreement by the
Bank.
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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 thirty (30) days prior written
Notice of Termination, as defined in Section 9(a), given within ninety (90)
days after the event giving rise to said right to
elect. Notwithstanding the preceding sentence, in the event of a
continuing breach of this Agreement by the Bank, Executive, after giving due
notice within the prescribed time frame of an initial event specified above,
shall not waive any of his rights under this Agreement and this Section solely
by virtue of the fact that Executive has submitted his resignation, provided
Executive has remained in the employment of the Bank and is engaged in good
faith discussions to resolve any occurrence of an event described in clauses
(A), (B), (C), (D) or (F) above. The Bank shall have at least
thirty (30) days to remedy any condition set forth in clause (ii)(A) through
(F), provided, however, that the Bank shall be entitled to waive such period and
make an immediate payment hereunder.
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(iii) (A)
Executive’s involuntary termination by the Bank or the Company (or any successor
thereto) on the effective date of, or at any time following, a Change in
Control, or (B) Executive’s resignation from the employment with the Bank
or the Company (or any successor thereto) following a Change in Control as a
result of any event described in Section 4(a)(ii)(A), (B), (C), (D), or (F)
above. For these purposes, a “Change in Control” shall mean a change
in control of the Bank or the Company of a nature that: (i) would be required to
be reported in response to Item 5.01 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 1934 (the “Exchange Act”); or (ii) without limitation such
a Change in Control shall be deemed to have occurred at such time as (a) any
“person” (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of Company’s outstanding securities
except for any securities purchased by the Bank’s employee stock ownership plan
or trust; or (b) individuals who constitute the Board of Directors of the
Company 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 a majority of the directors of the Board, shall be, for
purposes of this clause (b), considered as though he or 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 Company or similar
transaction in which the Bank or Company is not the surviving institution
occurs.
(b) Upon
the occurrence of an Event of Termination under Sections 4(a) (i) or (ii),
on the Date of Termination, as defined in Section 9(b), the Bank 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, as severance
pay or liquidated damages, or both, an amount equal to the sum of: (i) his
earned but unpaid salary as of the date of his termination of employment with
the Bank; (ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company’s officers and
employees; (iii) the remaining payments that Executive would have earned, in
accordance with Sections 3(a) and 3(b), if he had continued his employment
with the Bank
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for
twelve (12) full months following such Event of Termination, and had earned the
maximum bonus or incentive award in each calendar year that ends during such
term; and (iv) the annual contributions or payments that would have been
made on Executive’s behalf to any employee benefit plans of the Bank as if
Executive had continued his employment with the Bank for twelve (12) full months
following such Event of Termination, based on contributions or payments made (on
an annualized basis) at the Date of Termination. Any payments
hereunder shall be made in a lump sum within thirty (30) days after the Date of
Termination. Notwithstanding the foregoing, in the event Executive is
a Specified Employee (within the meaning of Treasury Regulations §1.409A-1(i)),
then, to the extent necessary to avoid penalties under Code Section 409A, no
payment shall be made to Executive prior to the first day of the seventh month
following the Date of Termination in excess of the “permitted amount” under Code
Section 409A. For these purposes, the “permitted amount” shall be an
amount that does not exceed two times the lesser of: (i) the sum of Executive’s
annualized compensation based upon the annual rate of pay for services provided
to the Bank for the calendar year preceding the year in which occurs the Date of
Termination or (ii) the maximum amount that may be taken into account under a
tax-qualified plan pursuant to Code Section 401(a)(17) for the calendar year in
which occurs the Date of Termination. Payment of the “permitted
amount” shall be made within thirty (30) days following the Date of
Termination. Any payment in excess of the permitted amount shall be
made to Executive on the first day of the seventh month following the Date of
Termination. Such payments shall not be reduced in the event
Executive obtains other employment following termination of
employment.
(c) Upon
the occurrence of an Event of Termination under Section 4(a)(iii), on the
Date of Termination, as defined in Section 9(b), the Bank 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, as severance
pay or liquidated damages, or both, an amount equal to the sum of: (i) his
earned but unpaid salary as of the date of his termination of employment with
the Bank; (ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company’s officers and
employees; (iii) the remaining payments that Executive would have earned, in
accordance with Sections 3(a) and 3(b), if he had continued his employment
with the Bank for an eighteen (18) month period following such Event of
Termination, and had earned the maximum bonus or incentive award in each
calendar year that ends during such term; and (iv) the annual contributions
or payments that would have been made on Executive’s behalf to any employee
benefit plans of the Bank or the Company as if Executive had continued his
employment with the Bank for an eighteen (18) month period following such Event
of Termination, based on contributions or payments made (on an annualized basis)
at the Date of Termination. Any payments hereunder shall be made in a
lump sum within thirty (30) days after the Date of
Termination. Notwithstanding the foregoing, in the event Executive is
a Specified Employee (within the meaning of Treasury Regulations §1.409A-1(i)),
then, to the extent necessary to avoid penalties under Code Section 409A, no
payment shall be made to Executive prior to the first day of the seventh month
following the Date of Termination in excess of the “permitted amount” under Code
Section 409A. For these purposes, the “permitted amount” shall be an
amount that does not exceed two times the lesser of: (i) the sum of Executive’s
annualized compensation based upon the annual rate of pay for services provided
to the Bank for the calendar year preceding the year in which occurs the Date of
Termination or (ii) the maximum amount that may be taken into account under a
tax-qualified plan pursuant to Code Section 401(a)(17) for the calendar year in
which occurs the Date of Termination. Payment of the “permitted
amount” shall be made within thirty (30) days following the Date of
Termination. Any payment in excess of the permitted amount shall be
made to Executive on the first day of the seventh month following the Date of
Termination. Such payments shall not be reduced in the event
Executive obtains other employment following termination of
employment.
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(d) To
the extent required under applicable law, upon the occurrence of an Event of
Termination, the Bank will cause to be continued life insurance and non-taxable
medical coverage substantially identical to the coverage maintained by the Bank
for Executive and his family prior to Executive’s termination.
(e) Notwithstanding
anything in this Agreement to the contrary, in no event shall the aggregate
payments or benefits to be made or afforded to Executive under this Section
constitute an “excess parachute payment” under Code Section 280G or any
successor thereto, and in order to avoid such a result, Executive’s
benefits hereunder shall be reduced, if necessary, to an amount, the value of
which is one dollar ($1.00) less than an amount equal to three (3) times
Executive’s “base amount,” as determined in accordance with Code Section
280G. The allocation of the reduction required hereby shall be
determined by Executive, provided, however, that if it is determined that such
election by Executive shall be in violation of Code Section 409A, the allocation
of the required reduction shall be pro-rata.
(f) For
purposes of Section 4, Event of Termination shall be construed to require a
“Separation from Service” as defined in Code Section 409A and the Treasury
Regulations promulgated thereunder. The Bank and Executive reasonably
anticipate that the level of bona fide services Executive would perform, if any,
after termination would permanently decrease to a level that is less than 50% of
the average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding 36-month
period.
5.
TERMINATION FOR CAUSE.
(a) The
term “Termination for Cause” shall mean termination because
of Executive’s personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order,
material breach of any provision of this Agreement, or action by a state or
federal regulator against executive with respect to employment at another
financial institution.
(b) Notwithstanding
Section 5(a), neither the Company nor the Bank may terminate Executive for
Cause unless and until there shall have been delivered to him a Notice of
Termination, finding that in the good faith opinion of the Chief Executive
Officer, Executive was guilty of conduct justifying Termination for Cause and
specifying the particulars thereof in detail. 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 through the Date of Termination, any unvested
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 Bank, the Company or any
subsidiary or affiliate thereof, vest. At the Date of Termination,
any such unvested 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 Executive at any time subsequent to such Termination for Cause. In
the Event of Executive’s Termination for Cause, Executive shall resign
immediately as a director of the Company and the Bank, and as a director and/or
officer of any subsidiary or affiliate of the Company and/or the
Bank.
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6.
TERMINATION FOR DISABILITY OR
DEATH.
(a) The
Bank or Executive may terminate Executive’s employment after having established
Executive’s Disability. For purposes of this Agreement, “Disability”
shall be deemed to have occurred if: (i) Executive is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death, or last for a
continuous period of not less than 12 months; (ii) by reason of any medically
determinable physical or mental impairment that can be expected to result in
death, or last for continuous period of not less than 12 months, Executive is
receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Bank; or (iii)
Executive is determined to be totally disabled by the Social Security
Administration. As a condition to any benefits, the Chief Executive Officer may
require Executive to submit to such physical or mental evaluations and tests as
the Chief Executive Officer deems reasonably appropriate, at the Bank’s
expense. In the event of such Disability, Executive shall be entitled
to receive benefits under any short or long-term disability plan maintained by
the Bank. To the extent that such benefits are less than Executive’s
Base Salary, the Bank shall pay Executive an amount equal to the difference
between such disability plan benefits and the amount of Executive’s Base Salary
for the remaining term of the Agreement, following the termination of
Executive’s employment due to Disability. Accordingly, any payments
required hereunder shall commence within thirty (30) days from the Date of
Termination due to Disability and be payable in monthly
installments.
(b) In
the event of Executive’s death during the term of this Agreement, his estate,
legal representatives or named beneficiary or beneficiaries (as directed by
Executive in writing) shall be paid Executive’s Base Salary, at the rate in
effect at the time of Executive’s death for the remainder of the then-current
term, which payments shall commence within thirty days following the date of
Executive’s death.
7.
TERMINATION UPON
RETIREMENT
Termination of Executive’s employment
based on “Retirement” shall mean termination of Executive’s employment on or
after age 65 unless extended by the Board or in accordance with any retirement
policy established by the Bank or the Company with Executive’s consent with
respect to him. Upon termination of Executive’s employment based on
Retirement, no amounts or benefits shall be due Executive under this Agreement,
and Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.
8. RESIGNATION
FROM BOARDS OF DIRECTORS
In the event of termination of
Executive’s employment for any reason other than upon a Change in Control,
Executive shall resign as a director of the Company and the Bank, and/or as a
director and/or officer of any subsidiary or affiliate of the Company and/or the
Bank.
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9.
NOTICE.
(a) Any
notice required hereunder shall be in writing and hand-delivered to the other
party. Hand delivery to the Bank may be made to the Chief Executive
Officer. Any termination by the Bank 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 (A) if Executive’s employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided
that he shall not have returned to the performance of his duties on a full-time
basis during such thirty (30) day period), and (B) if his employment is
terminated for any other reason, the date specified in the Notice of
Termination.
(c) If
the party receiving a Notice of Termination desires to dispute or contest the
basis or reasons for termination, the party receiving the Notice of Termination
must notify the other party within
thirty (30) days after receiving the Notice of Termination that such a dispute
exists, and shall pursue the resolution of such dispute in good faith and with
reasonable diligence. During the pendency of any such dispute,
neither the Company nor the Bank shall be obligated to pay Executive
compensation or other payments beyond the Date of Termination.
10. SOURCE
OF PAYMENTS.
All
payments provided in this Agreement shall be timely paid in cash or check from
the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive,
and if such amounts and benefits due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.
11. EFFECT
ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This
Agreement contains the entire understanding between the parties hereto and
supersedes any prior agreement between the Bank or any predecessor of the Bank
and Executive. 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.
12. NO
ATTACHMENT; BINDING ON SUCCESSORS.
(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 effect 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
Bank and their respective successors and assigns.
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13. 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.
14. REQUIRED
PROVISIONS.
(a) The
Bank may terminate Executive’s employment at any time, but any termination by
the Bank other than Termination for Cause as defined in Section 5 hereof shall
not prejudice Executive’s right to compensation or other benefits under this
Agreement. Executive shall have no right to receive compensation or
other benefits for any period after Termination for Cause.
(b) If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) [12 U.S.C. §1818(e)(3)] or 8(g)(1) [12 U.S.C. §1818(g)(1)]
of the Federal Deposit Insurance Act (the “FDI Act”), the Bank’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 Bank may in its discretion (i) pay Executive all or part of the
compensation withheld while its contract obligations were suspended and (ii)
reinstate (in whole or in part) any of its obligations which were
suspended.
(c) If
Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) [12
U.S.C. §1818(e)(4)] or 8(g)(1) [12 U.S.C. §1818(g)(1)] of the FDI Act, all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.
(d) If
the Bank is in default as defined in Section 3(x)(1) [12 U.S.C. §1813(x)(1)] of
the FDI Act, all obligations of the Bank under this Agreement shall terminate as
of the date of default, but this paragraph shall not affect any vested rights of
the contracting parties.
(e) All
obligations under this Agreement shall be terminated, except to the extent
determined that continuation of this Agreement is necessary for the continued
operation of the Bank, (i) by the Director of the Office of Thrift Supervision
(“OTS”) or his or her designee, at the time the Federal Deposit Insurance
Corporation (“FDIC”) enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) [12 U.S.C.
§1823(c)] of the FDI Act; or (ii) by the Director or his or her designee at
the time the Director or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Director 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.
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(f) Notwithstanding
anything herein contained to the contrary, any payments to Executive by the
Company, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the FDI Act,
12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12
C.F.R. Part 359.
15. NON-COMPETITION
AND POST-TERMINATION OBLIGATIONS.
(a) All
payments and benefits to Executive under this Agreement shall be subject to
Executive’s compliance with paragraph (b), (c) and (d) of this Section
15.
(b) Executive
shall, upon reasonable notice, furnish such information and assistance to the
Bank as may reasonably be required by the Bank in connection with any litigation
in which it or any of its subsidiaries or affiliates is, or may become, a party;
provided, however, that Executive shall not be required to provide information
or assistance with respect to any litigation between Executive and the Bank or
any of its subsidiaries or affiliates.
(c) Executive
recognizes and acknowledges that the knowledge of the business activities and
plans for business activities of the Bank, the Company and affiliates thereof,
as it may exist from time to time, is a valuable, special and unique asset of
the business of the Bank, the Company and affiliates
thereof. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or considered
business activities of the Bank, Company or affiliates thereof to any person,
firm, corporation, or other entity for any reason or purpose whatsoever (except
for such disclosure as may be required to be provided to the OTS, the FDIC, or
other regulatory agency with jurisdiction over the Company, the Bank or
Executive). 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 Bank, and Executive may disclose any information regarding the
Bank which is otherwise publicly available or which Executive is otherwise
legally required to disclose. In the event of a breach or threatened
breach by Executive of the provisions of this Section 15, the Bank will be
entitled to an injunction restraining Executive from disclosing, in whole or in
part, his knowledge of the past, present, planned or considered business
activities of the Bank or the Company or any of their affiliates, or from
rendering any services to any person, firm, corporation or 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 Bank
and the Company from pursuing any other remedies available to them for such
breach or threatened breach, including the recovery of damages from
Executive.
(d) Executive
agrees that Executive will not, in any manner whatsoever, during his employment
with the Company and the Bank and for a period of two (2) years following the
termination of Executive’s employment, either as an individual or as a partner,
stockholder, director, officer, principal, employee, agent, consultant, or in
any other relationship or capacity, with any person, firm, corporation or other
business entity, either directly or indirectly, solicit or induce or aid in the
solicitation or inducement of any employees of the Company or the Bank to leave
their employment with the Company or the Bank. Executive further agrees
that Executive will not, in any manner whatsoever, during Executive’s
employment with the Company or the Bank and for a period of two (2) years
following the termination of Executive’s employment with the Company or the
Bank, either as an individual or as a partner, stockholder, director, officer,
principal, employee, agent, consultant or in any other relationship or capacity
with any person, firm, corporation or other business entity, either directly or
indirectly, solicit the business of any customers or clients of the Company or
the Bank at the time of the termination of Executive’s employment with the
Company or the Bank.
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16. 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.
17. 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.
18. GOVERNING
LAW.
This
Agreement shall be governed by the laws of the State of Illinois but only to the
extent not superseded by federal law.
19. ARBITRATION.
Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by binding arbitration, conducted before a single
arbitrator selected by the Bank and Executive sitting in a location selected by
the Bank and Executive within twenty-five (25) miles of Edwardsville, Illinois
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.
20. PAYMENT
OF LEGAL FEES.
All
reasonable 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 Bank, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in Executive’s favor, and such
reimbursement shall occur no later than sixty (60) days after the end of the
year in which the dispute is settled or resolved in Executive’s
favor.
21. INDEMNIFICATION.
(a) The
Bank 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 applicable law against
all expenses and liabilities reasonably incurred by his 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 Bank (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 (such settlements must be approved by the Board); provided, however,
the Bank shall not be required to indemnify or reimburse Executive for legal
expenses or liabilities incurred in connection with an action, suit or
proceeding arising from any illegal or fraudulent act committed by
Executive. Any such indemnification shall be made consistent with OTS
Regulations and Section 18(k) of the FDI Act, 12 U.S.C. §1828(k), and the
regulations issued thereunder in 12 C.F.R. Part 359.
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(b) Notwithstanding
the foregoing, no indemnification shall be made unless the Bank gives the OTS at
least 60 days’ notice of its intention to make such
indemnification. Such notice shall state the facts on which the
action arose, the terms of any settlement, and any disposition of the action by
a court. Such notice, a copy thereof, and a certified copy of the
resolution containing the required determination by the Board shall be sent to
the Regional Director of the OTS, who shall promptly acknowledge receipt
thereof. The notice period shall run from the date of such
receipt. No such indemnification shall be made if the OTS advises the
Bank in writing within such notice period, of its objection
thereto.
[Signatures
on next page]
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IN WITNESS WHEREOF, the
Company and the Bank have caused this Agreement to be executed by their duly
authorized representatives, and Executive has signed this Agreement, effective
as of the Effective Date. The Company has become a party to this
Agreement for the sole purpose of binding itself to the duties and obligations
set forth in Sections 10 and 21 hereof.
|
FIRST
CLOVER LEAF BANK
|
|
|
November 24,
2009
Date
|
By:/s/ Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, President and
Chief
Executive Officer
|
|
November 24,
2009
Date
|
By:/s/ Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, President and
Chief
Executive Officer
|
|
EXECUTIVE:
|
|
|
November 24,
2009
Date
|
/s/ Xxxx X.
Xxxxx
Xxxx
X. Xxxxx
|
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