EMPLOYMENT AGREEMENT
This Agreement ("Agreement") by and between Ben Franklin Bank of Illinois,
a federal savings bank (the "Bank"), with its principal office in Arlington
Heights, Illinois, and Xxxx Xxxxxx ("Executive"), which was originally effective
as of March 1, 2007, is hereby amended and restated effective as of
January 28, 2008, as set forth below.
WHEREAS, in order to induce Executive to remain in the employ of the Bank
and to provide further incentive to achieve the financial and performance
objectives of the Bank, the parties desire to enter into this Agreement upon the
terms and conditions hereof; and
WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code") provides that certain severance payments and other benefits to Executive
hereunder must comply with its terms and the Treasury regulations promulgated
thereunder (the "Treasury Regulations"), or subject the Executive to additional
taxes and penalties; and
WHEREAS, the Bank and Executive now placeStatewish to amend and restate the
Agreement in the manner set forth herein in order to conform the Agreement to
Code Section 409A, and for certain other purposes.
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.
The Executive agrees to serve as the Vice President and Chief Financial
Officer of the Bank and as such, the Executive shall be responsible for
overseeing the accounting, financial and regulatory reporting functions of the
Bank, in each case under the direction of the Chief Executive Officer. Failure
to reappoint Executive as Vice President and Chief Financial Officer of the Bank
without the consent of Executive during the term of this Agreement (except for
any termination for Just Cause or Retirement, as defined herein) shall
constitute a breach of this Agreement.
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 will continue for a period of
thirty-six (36) full calendar months thereafter. On the first day of March each
year (the "Anniversary Date"), this Agreement shall renew for an additional year
such that the remaining term shall be thirty-six (36) full calendar months
provided, however, that 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 and the remaining term shall be twenty-four (24) months from such
Anniversary Date.
(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 Board, 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
boards of directors of, and hold any other offices or positions in, business,
social, religious, charitable or similar organizations which will not present
any conflict of interest with the Bank or materially affect the performance of
Executive's duties pursuant to this Agreement.
3. COMPENSATION, BENEFITS AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties describe in Section 2. The Bank shall
pay Executive as compensation a salary of not less than $116,134 per year ("Base
Salary"). Such Base Salary shall be payable biweekly, 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 a committee designated by the Board, 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). Base Salary
shall not include any director's fees that the Executive is entitled to receive
as a director of the Bank or any affiliate of the Bank. Such director's fees
shall be separately paid to the Executive.
(b) Executive will be entitled to participate in and 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 currently or in the
future to its senior executives and key management employees. Executive will be
entitled to participate in any incentive compensation and bonus plans offered by
the Bank 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 provided for by paragraph (a) of this
Section 3, 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 Board 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 Board 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. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(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:
(i) the involuntary 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 for Disability or death) or
termination governed by Section 7 (Termination Upon Retirement),
provided that such termination of employment constitutes a
"Separation from Service" within the meaning of Section 4(e)
hereof; or
(ii) Executive's voluntary resignation from the Bank's employ for any
of the following reasons:
(A) the failure to appoint or reappoint Executive to the
position set forth under Section 1;
(B) 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, above;
(C) a relocation of Executive's principal place of employment by
more than forty-five (45) miles from its location at the
Effective Date of this Agreement;
(D) 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;
(E) a liquidation or dissolution of the Bank; or
(F) a material breach of this Agreement by the Bank or the
Holding Company.
Upon the occurrence of any event described in clauses (A), (B),
(C), (D), (E) or (F), above, Executive shall have the right to
elect to terminate 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. The Bank will have thirty (30) days to cure the conditions
giving rise to the Event of Termination, provided that the Bank
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may elect to waive such thirty (30) day period. 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.
(iii) (A) Executive's involuntary termination by the Bank (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 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, its holding company as of the date hereof (the
"Holding 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 0000 (xxx "Xxxxxxxx
Xxx"); 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 Holding Company or Bank representing 25% or
more of the combined voting power of the Holding Company's or
Bank'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 Bank or
the Holding 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 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 in which the
Bank or Holding Company is not the surviving institution occurs;
provided, however, that, to the extent necessary to comply with
Code Section 409A, "Change in Control" shall instead have the
meaning set forth in Code Section 409A and the regulations and
other guidance published thereunder; and provided further that a
Change in Control shall not be deemed to have occurred solely as
a result of the conversion of the Holding Company's mutual
holding company parent to stock form or a reorganization used to
effect such a conversion.
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(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'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 the remainder of the term of this Agreement (but in any event, such term
shall not exceed thirty-six (36) months), 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 the remainder of the term of this Agreement (but in
any event, such term shall not exceed thirty-six (36) months), 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, except as otherwise provided herein.
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 Holding Company's
officers and employees; (iii) the remaining payments that Executive would have
earned, in accordance with Sections 3 (a) and (b), if he had continued his
employment with the Bank for a thirty-six (36) month period following his
termination of employment, 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 a thirty-six (36) month period following his
termination of employment, 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, except
as otherwise provided herein. Such payments shall not be reduced in the event
Executive obtains other employment following termination of employment.
(d) Upon the occurrence of an Event of Termination under Section 4(a)(i),
(ii) or (iii), the Bank will cause to be continued, at the Bank's expense,
non-taxable medical coverage substantially identical to the coverage maintained
by the Bank for Executive and his family prior to Executive's termination. Such
coverage shall continue at the Bank's expense for the remainder of the term of
this Agreement following the Date of Termination.
(e) For purposes of this Agreement, a "Separation from Service" shall have
occurred if the Bank and Executive reasonably anticipate that no further
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services will be performed by the Executive after the date of the Event of
Termination (whether as an employee or as an independent contractor) or the
level of further services performed will not exceed 49% of the average level of
bona fide services in the 36 months immediately preceding the Event of
Termination. For all purposes hereunder, the definition of "Separation from
Service" shall be interpreted consistent with Treasury Regulation Section
1.409A-1(h)(ii). If Executive is a Specified Employee, as defined in Code
Section 409A and any payment to be made under subparagraph (b) or (c) of this
Section 4 shall be determined to be subject to Code Section 409A, then if
required by Code Section 409A, such payment or a portion of such payment (to the
minimum extent possible) shall be delayed and shall be paid on the first day of
the seventh month following Executive's Separation from Service.
(f) 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 Section 280G
of the Internal Revenue Code of 1986, as amended, ("Code") 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 Section 280G. The allocation of the reduction
required hereby shall be determined by Executive.
(g) In the event the Executive resigns for any reason other than an Event
of Termination (as described in Section 4), Termination for Just Cause (as
described in Section 5), Termination for Disability or Death (as described in
Section 6) or Termination Upon Retirement (as described in Section 7), all
obligations of the Bank hereunder shall immediately cease upon the date of such
resignation.
(h) Notwithstanding the foregoing, to the extent required by regulations or
interpretations of the Office of Thrift Supervision, all severance payments
under the Agreement shall not exceed three (3) times the Executive's average
annual compensation (as defined in such regulations or interpretations) over the
most recent five (5) taxable years.
5. TERMINATION FOR JUST CAUSE.
(a) The term "Termination for Just Cause" shall mean termination because of
the 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, or material
breach of any provision of this Agreement.
(b) Notwithstanding Section 5(a), the Bank may not terminate Executive for
Just 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 a majority of the entire membership of the
Board at a meeting of the Board called and held for that purpose, finding that
in the good faith opinion of the Board, Executive had engaged in or committed
the conduct justifying Termination for Just 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 Just Cause. During the
period beginning on the date of the Notice of Termination for Just Cause
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pursuant to Section 5 hereof through the Date of Termination, any unvested stock
options and related rights granted to Executive under any stock option plan of
the Bank or the Holding Company (or any affiliate) shall not be exercisable nor
shall any unvested awards granted to Executive under any stock benefit plan of
the Bank or Holding Company (or affiliate thereof) vest. At the Date of
Termination, any such unvested stock options and related 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 Just
Cause. In the Event of Executive's Termination for Just Cause, Executive shall
resign immediately as a director of the Bank and as a director and/or officer of
any affiliate of the Bank.
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"
means a physical or mental infirmity that impairs Executive's ability to
substantially perform his duties under this Agreement and that results in
Executive's becoming eligible for long-term disability benefits under a
long-term disability plan of the Bank (or, if the Bank has no such plan in
effect, that impairs Executive's ability to substantially perform his duties
under this Agreement for a period of one hundred eighty (180) consecutive days).
The Board shall determine in good faith, based upon competent medical advice and
other factors that they reasonably believe to be relevant, whether or not
Executive is and continues to be disabled for purposes of this Agreement. As a
condition to any benefits, the Board may require Executive to submit to such
physical or mental evaluations and tests as it deems reasonably appropriate, at
the Bank's expense.
(b) In the event of such Disability, Executive's obligation to perform
services under this Agreement will terminate. In the event of such termination,
Executive shall be entitled to receive benefits under any disability program
sponsored by the Bank.
(c) 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, as
defined in Section 3, at the rate in effect at the time of Executive's death for
a period of one (1) year from 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 at age 65, unless extended by the Board.
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 Executive's termination of employment for any reason other
than upon a Change in Control, Executive shall, if applicable, resign as a
director of the Bank, and as a director and/or officer of any affiliate of the
Bank including the Holding Company.
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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 shall be made to the Chairman or the
Secretary of the Board of Directors. 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 pursuant
to Section 19 of this Agreement. During the pendency of any such dispute, the
Bank shall not 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.
11. 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 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 or as otherwise provided in this Agreement,
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.
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(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
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 Board other than Termination for Just 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 USC ss.1818(e)(3)] or 8(g)(1) [12 USC ss.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 USC ss.1818(e)(4)] or 8(g)(1) [12 USC ss.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 USC
ss.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 OTS or his or her
designee, at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) [12 USC
ss.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
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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.
(f) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Bank, 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 the
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 and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank 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 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 Office of Thrift Supervision ("OTS"), the Federal Deposit Insurance
Corporation ("FDIC"), or other regulatory agency with jurisdiction over 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 any of its 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 from pursuing any other remedies available to
them for such breach or threatened breach, including the recovery of damages
from Executive.
(d) Upon any termination of Executive's employment hereunder for any reason
other than (i) pursuant to Section 4(a)(iii); (ii) pursuant to Section 6; or
(iii) any termination of Executive's employment hereunder as a result of the
expiration of Executive's employment term following a notice of non-renewal
pursuant to Section 2, Executive agrees not to compete in the banking and
lending business with the Bank and any of its affiliates for a period of one (1)
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year following such termination in any city or town in which the Bank has an
office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said cities and towns, 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 Bank. The parties hereto, recognizing that
irreparable injury will result to the Bank, its business and property in the
event of Executive's breach of this Section 15(d) agree that in the event of any
such breach by Executive, the Bank will be entitled, in addition to any other
remedies and damages available, to an injunction to restrain the violation
hereof by Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive represents and
admits that Executive's experience and capabilities are such that Executive can
obtain employment in a business engaged in other lines and/or of a different
nature than the Bank, and that the enforcement of a remedy by way of injunction
will not prevent Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Bank from pursuing any other remedies available to
them for such breach or threatened breach, including the recovery of damages
from Executive.
(e) Upon any termination of Executive's employment hereunder for any reason
other than (i) pursuant to Section 4(a)(iii); (ii) pursuant to Section 6; or
(iii) any termination of Executive's employment hereunder as a result of the
expiration of Executive's employment term following a notice of non-renewal
pursuant to Section 2, Executive agrees that Executive will not, in any manner
whatsoever, for a period of one (1) year following the termination of
Executive's employment with 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 directory or indirectly, solicit or induce or aid in the
solicitation or inducement of any employees of the Bank to leave their
employment with the Bank. Executive further agrees that the Executive will not,
in any manner whatsoever, for a period of one (1) year following the termination
of Executive's employment with 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 Bank at the time of termination of Executive's
employment with the Bank.
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.
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18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of
StateplaceIllinois 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 Arlington
Heights, 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. To the
extent necessary to avoid taxes and penalties under Code Section 409A, such
reimbursement shall be paid within two and one-half placeStatemonths following
the resolution of any such dispute.
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) for the term of this Agreement and for
a period of six years thereafter to the fullest extent permitted under
applicable 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 performance of services as 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 Federal Deposit
Insurance Act, 12 U.S.C. ss.1828(k), and the regulations issued thereunder in 12
C.F.R. Part 359.
(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.
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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed by
its duly authorized representative, and Executive has signed this Agreement,
effective as of the day and date first above written.
ATTEST: BEN FRANKLIN BANK OF ILLINOIS
/s/ Xxxxxxxxx Xxxxxxxx By: /s/ C. Xxxxxx Xxxxxxx
----------------------------- -----------------------------------
Corporate Secretary Chairman of the Board
WITNESS: EXECUTIVE:
/s/ Xxxxxxxx Xxxxx /s/ Xxxx Xxxxxx
----------------------------- ---------------------------------------
Xxxx Xxxxxx
