EXHIBIT 10.5
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into
this 1st day of January 2000 ("Effective Date"), by and between Guaranty Federal
Savings Bank (the "Bank") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is currently employed by the Bank as President
and is experienced in the business of the Bank; and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Bank and Executive if the Bank should undergo a change
in control (as defined hereinafter in the Agreement) after the Effective Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Executive is employed in the capacity as the
President of the Bank. The Executive shall render such administrative and
management services to the Bank and Guaranty Federal Bancshares, Inc. ("Parent")
as are currently rendered and as are customarily performed by persons situated
in a similar executive capacity. The Executive's other duties shall be such as
the Board of Directors for the Bank (the "Board of Directors" or "Board") may
from time to time reasonably direct, including normal duties as an officer of
the Bank and the Parent.
2. Term of Agreement. The term of this Agreement shall be for the
period commencing on the Effective Date and ending thirty-six (36) months
thereafter ("Term").
3. Termination of Employment in Connection with or Subsequent to a
Change in Control.
(a) Notwithstanding any provision herein to the contrary, in the event
of the involuntary termination of Executive's employment under this Agreement,
absent Just Cause, in connection with, or within twenty-four (24) months after,
any Change in Control of the Bank or Parent, Executive shall be paid an amount
equal to two (2.0) times the Executives "base amount" as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986 ("Code"), and the costs
associated with maintaining coverage under the Bank's medical and dental
insurance reimbursement plans similar to that in effect on the date of
termination of employment for a period of two years thereafter. Said sum shall
be paid, at the option of Executive, either in one (1) lump sum not later than
the date of such termination of employment or in periodic payments over the next
24 months, as if Executive's employment had not been terminated. Notwithstanding
the forgoing, all sums payable hereunder shall be reduced in such manner and to
such extent so that no such payments made hereunder when aggregated with all
other payments to be made to the Executive by the Bank or the Parent shall be
deemed an "excess parachute payment" in accordance with Section 280G of the Code
and be subject to the excise tax provided at Section 4999(a) of the
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Code. The term "change in control" shall refer to (i) the sale of all, or a
material portion, of the assets of the Bank or the Parent; (ii) the merger or
recapitalization of the Bank or the Parent whereby the Bank or the Parent is not
the surviving entity; (iii) a change in control of the Bank or the Parent, as
otherwise defined or determined by the Office of Thrift Supervision or
regulations promulgated by it; or (iv) the acquisition, directly or indirectly,
of the beneficial ownership (within the meaning of that term as it is used in
Section 13(d) of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding voting securities of the Bank or the Parent by any person, trust,
entity or group. This limitation shall not apply to the purchase of shares by
underwriters in connection with a public offering of Bank or Parent stock, or
the purchase of shares of up to 25% of any class of securities of the Bank or
Parent by a tax-qualified employee stock benefit plan which is exempt from the
approval requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in
effect or as may hereafter be amended. The term "person" refers to an individual
or a corporation, partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the
contrary, Executive may voluntarily terminate his employment within 24 months
following a change in control of the Bank or Parent, and Executive shall
thereupon be entitled to receive the payment described in Section 3(a) of this
Agreement, upon the occurrence, or within 120 days thereafter, of any of the
following events, which have not been consented to in advance by the Executive
in writing: (i) if Executive would be required to move his personal residence or
perform his principal executive functions more than thirty-five (35) miles from
the Executive's primary office as of the signing of this Agreement; (ii) if in
the organizational structure of the Bank, Executive would be required to report
to a person or persons other than the Board of Directors of the Bank; (iii) if
the Bank should fail to maintain Executive's base compensation in effect as of
the date of the Change in Control and the existing employee benefits plans,
including material fringe benefit, stock option and retirement plans; (iv) if
Executive would be assigned duties and responsibilities other than those
normally associated with his position as referenced at Section 1, herein; (v) if
Executive's responsibilities or authority have in any way been materially
diminished or reduced; or (vi) if Executive would not be reelected to the Board
of Directors of the Bank or the Parent.
4. Other Changes in Employment Status.
Except as provided for at Section 3, herein, the Board of Directors may
terminate the Executive's employment at any time with or without Just Cause
within its sole discretion. This Agreement shall not be deemed to give Executive
any right to be retained in the employment or service of the Bank, or to
interfere with the right of the Bank to terminate the employment of the
Executive at any time. The Executive shall have no right to receive compensation
or other benefits for any period after termination for Just Cause. Termination
for "Just Cause" shall include termination because of the Executive's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated
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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 the Agreement.
5. Regulatory Exclusions.
(a) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the contracting parties shall not be affected.
(b) If the Bank is in default (as defined in Section 3(x)(1) of FDIA)
all obligations under this Agreement shall terminate as of the date of default,
but this paragraph shall not affect any vested rights of the contracting
parties.
(c) 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 ("Director of OTS"), or his or her designee, at the time that 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) of FDIA; or (ii) by the Director of the OTS, or his or her
designee, at the time that the Director of the OTS, 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 of the OTS 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.
(d) If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), the
Bank's obligations under the 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 within its discretion (i) pay the 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.
(e) Notwithstanding anything herein to the contrary, any payments made
to the Executive pursuant to the Agreement, or otherwise, shall be subject to
and conditioned upon compliance with 12 USC ss.1828(k) and any regulations
promulgated thereunder.
6. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank or Parent.
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(b) The Executive shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written consent of the
Bank.
7. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
8. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of Missouri, except to the extent that Federal law shall be
deemed to apply.
9. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
10. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extent that the parties may otherwise reach a mutual
settlement of such issue. Further, the settlement of the dispute to be approved
by the Board of the Bank may include a provision for the reimbursement by the
Bank to the Executive for all reasonable costs and expenses, including
reasonable attorneys' fees, arising from such dispute, proceedings or actions,
or the Board of the Bank or the Parent may authorize such reimbursement of such
reasonable costs and expenses by separate action upon a written action and
determination of the Board following settlement of the dispute. Such
reimbursement shall be paid within ten (10) days of Executive furnishing to the
Bank or Parent evidence, which may be in the form, among other things, of a
canceled check or receipt, of any costs or expenses incurred by Executive.
11. Confidential Information. The Executive acknowledges that during
his or her employment he or she will learn and have access to confidential
information regarding the Bank and the Parent and its customers and businesses
("Confidential Information"). The Executive agrees and covenants not to disclose
or use for his or her own benefit, or the benefit of any other person or entity,
any such Confidential Information, unless or until the Bank or tthe Parent
consents to such disclosure or use or such information becomes common knowledge
in the industry or is otherwise legally in the public domain. The Executive
shall not knowingly disclose or reveal to any unauthorized person any
Confidential Information relating to the Bank, the Parent, or any subsidiaries
or affiliates, or to any of the businesses operated by them, and the Executive
confirms that such information constitutes the exclusive property of the Bank
and the Parent. The Executive shall not otherwise knowingly act or conduct
himself (a) to the material detriment of the Bank or the Parent, or its
subsidiaries, or affiliates, or (b) in a manner which is inimical or contrary to
the interests of the Bank or the Parent. Executive acknowledges and agrees that
the existence of this Agreement and its terms and conditions constitutes
Confidential Information of the Bank, and the
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Executive agrees not to disclose the Agreement or its contents without the prior
written consent of the Bank. Notwithstanding the foregoing, the Bank reserves
the right in its sole discretion to make disclosure of this Agreement as it
deems necessary or appropriate in compliance with its regulatory reporting
requirements. Notwithstanding anything herein to the contrary, failure by the
Executive to comply with the provisions of this Section may result in the
immediate termination of the Agreement within the sole discretion of the Bank,
disciplinary action against the Executive taken by the Bank, including but not
limited to the termination of employment of the Executive for breach of the
Agreement and the provisions of this Section, and other remedies that may be
available in law or in equity.
12. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto. This Agreement supercedes any
prior written Employment Agreement or Severance Agreements between the Executive
and the Bank or the Parent.
[End of Agreement]
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In addition to the change in control severance agreement with ▇▇.
▇▇▇▇▇▇▇▇▇, Guaranty Federal Savings Bank entered into identical agreements as of
the same date with the following nine employees of the bank: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇. Each agreement provides for the payment
of two times the employee's "base amount" (as defined in 26 U.S.C. Section
280G(b)(3)) in the event of a change in control.
