Exhibit 10.7
EMPLOYMENT CONTRACT
-------------------
This Employment Contract ("Contact") entered into this 18/th/ day of
September, 1998, by and between Security Federal Bank FSB ("Employer") and Xxxx
X. Xxxxxx, Xx. ("Xxxxxx"),
WITNESSETH that:
Whereas, Employer seeks to fill a vacancy in the position of CEO/President
with an individual experienced in banking and possessing management and
leadership skills;
Whereas, Xxxxxx possesses such experience and skills and has served in
similar capacities for other banking institutions;
Whereas, Employer and Xxxxxx believe that Xxxxxx'x efforts and skills will
contribute to the growth and prosperity of the Employer,
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by both parties, it is hereby agreed that:
1. Terms of Contract
-----------------
Effective October 5, 1998, and for a period of one (1) year from that date,
Employer will employ Xxxxxx as Chief Executive Officer and President.
Xxxxxx agrees to such term of employment. Employer and Xxxxxx further agree
that by mutual agreement Xxxxxx'x term of employment may be extended for an
additional period not to exceed a total of three (3) years for any contract
term.
Xxxxxx will perform such duties as are assigned to him by the Employer's
Board of Directors or its Executive Committee. Xxxxxx shall be obligated to
devote his full time efforts to the position of CEO/President.
Xxxxxx has disclosed to Employer that he serves as a Director of other
corporations. Employer agrees that Xxxxxx may continue such service so long
as there is no conflict with the duties and positions which he holds as an
employee of Employer. Xxxxxx shall otherwise abide by the terms and
provisions set forth in Employer's Employee Handbook regarding such outside
interests. In the event that Employer determines that Xxxxxx'x affiliation
with other corporations or business entities conflicts with his position as
CEO/President, Employer shall provide to Xxxxxx thirty (30) days written
notice of such conflict(s) and Xxxxxx shall have thirty (30) days time
thereafter to remedy such conflicts(s) or face termination.
2. Compensation
------------
Employer agrees to pay to Xxxxxx and Xxxxxx agrees to accept a salary of
$175,000.00 per year, payable in installments in accordance with the
Employer's prevailing payroll program. Additionally, Xxxxxx shall receive
all employee benefits in force from time to time for all employees of
Employer, including, but not limited to, vacation, health insurance, life
insurance, pension plan, and 401(k) and not inconsistent with the terms of
this Contract.
3. Death and Disability
--------------------
X. Xxxxxx represents that the condition of his health is such that he can
fully perform the terms of this Contract. At the request of Employer,
Xxxxxx may at any time be required to submit to such physical examinations
as Employer may direct. All expenses incurred for any such physical
examination shall be paid by Employer.
B. In the event of Xxxxxx'x death prior to the expiration of this
Contract, Employer shall pay to Xxxxxx'x estate the amount of Xxxxxx'x
salary and vacation having accrued up to Xxxxxx'x date of death. Employer
shall than have no further obligations to Xxxxxx, to Xxxxxx'x estate, or to
Xxxxxx'x heirs.
C. In the event of Xxxxxx'x disability, as herein after defined, and
prior to the expiration of this Contract, Employer shall pay Xxxxxx the
amount of Xxxxxx'x salary and vacation having accrued up to the date of
Xxxxxx'x disability. Employer shall than have no further salary obligations
to Xxxxxx, to Xxxxxx'x estate, or to Xxxxxx'x heirs.
D. As used herein, the term "disability" means any continuing physical or
mental condition which shall incapacitate Xxxxxx from performing his duties
hereunder and which condition shall not be removed within ninety (90) days
from the date Employer's Board of Directors determines that such a
disability exists and provides written notice of that determination to
Xxxxxx. If any controversy or disagreement shall arise as to the existence
or duration of such disability, Xxxxxx shall be examined by a physician to
be mutually selected by Employer and Xxxxxx'x spouse. The decision of the
physician shall be conclusive and binding on all parties. In the event that
Employer and Xxxxxx'x spouse cannot agree on the selection of the examining
physician, the examining physician shall be designated by the Executive
Committee of Employer's Board of Directors from those physicians
recommended by the Chief of Staff of Community Hospital, Munster, Indiana.
4. Miscellaneous
-------------
During the term of this Contract Xxxxxx shall be provided, at Employer's
expense, a cellular telephone and pager. Additionally, Employer shall
reimburse to Xxxxxx business expenses incurred in the performance of
Xxxxxx'x duties, upon presentation to Employer by Xxxxxx of itemized
accounts and receipts.
2
5. Termination of Contract
-----------------------
A. This Contract may be terminated at any time by Employer's Board of
Directors. Any such termination, except for cause, shall not prejudice
Xxxxxx'x right to compensation or other benefits under the Contract. Xxxxxx
shall have no right to receive compensation or other benefits for any
period after termination for cause.
B. This Contract may be terminated by Employer for misfeasance,
malfeasance or nonfeasance on the part of Xxxxxx as an Employee of Employer
of for Xxxxxx'x failure to comply with any provision of this Contract.
Termination for cause shall include termination based upon 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 a final cease-and-desist order. In such
event, written notice of such termination from Employer's Board of
Directors of Executive Board Committee to Xxxxxx shall relieve Employer of
all obligations under this Contract.
C. If Xxxxxx is suspended and/or temporarily prohibited from
participating in the conduct of the Employer's affairs by a notice served
pursuant to applicable sections of the Federal Deposit Insurance Act, the
Employer's obligations under this Contract shall be suspended as of the
date of service unless stayed by appropriate proceedings. If the charges in
the notice are dismissed, Employer may in its discretion pay to Xxxxxx all
or part of the compensation withheld while its Contract obligations were
suspended and reinstate (in whole or in part) any of its obligations which
were suspended.
D. If Xxxxxx is removed and/or permanently prohibited from participating
in the conduct of the Employer's affairs by an order issued under any
section of the Federal Deposit Insurance Act, all obligations of the
Employer under this Contract shall terminate as of the effective date of
the order, but Xxxxxx'x vested rights, if any, shall not be affected.
E. If Employer is in default pursuant to applicable federal regulations,
all obligations under this Contract shall terminate as of the date of
default except with respect to any vested rights.
F. This Contract shall be subject to all other provisions of OTS
Regulations Section 563.39 whether specifically enumerated herein or not.
G. At all times, both during and after his employment with Employer,
Xxxxxx will hold Employer's proprietary information in confidence.
Proprietary information shall include, but not be limited to, Employer's
databases, marketing and sales plans, product development, business and
financial plans or forecast, non-public financial information, agreements,
and customer and employee lists.
3
H. Any payments made to Xxxxxx pursuant to this Contract, or otherwise,
are subject to or conditioned upon compliance with 12 USC(S) 1828(k) and
any regulations promulgated thereunder.
6. Notice
------
All notices, demands, elections, and other communications required
hereunder shall be in writing and shall be deemed to have been served upon
or delivered to a party when personally served or delivered to such party
or when deposited in the United States Mail, postage prepaid, and addressed
to such party as follows:
A. If to Employer:
Security Federal Bank FSB
Office of the Secretary
0000 Xxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxx 00000-0000
B. If to Xxxxxx:
Xxxx X. Xxxxxx, Xx.
0000 Xxxx 000xx Xxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
7. Governing Law
-------------
This Contract shall be governed by, construed and enforced in accordance
with the laws of the state of Indiana.
8. Binding Effect
--------------
The terms and provisions of this Contract shall be binding upon and inure
to the benefit of both Employer (or any successor corporation, association
or entity resulting from a merger or consolidation in which Employer's
assets are sold or transferred, or to any corporation, subsidiary or
association affiliated with Employer which assumes this Contract), and,
upon Xxxxxx, his heirs, assigns, and personal representative.
9. Entire Agreement
----------------
This Contract constitutes the entire agreement between Employer and Xxxxxx
and may not be changed or modified except in writing, signed by the parties
hereto.
4
IN WITNESS WHEREOF, Employer and Xxxxxx have executed this Contract on the
date above written.
SECURITY FEDERAL BANK, FSB
BY: /s/ Xxxx Xxxx Xxxxxxxxxxx /s/ Xxxx X. Xxxxxx
-------------------------------- -----------------------------
XXXX XXXX XXXXXXXXXXX XXXX X. XXXXXX, XX.
Co-Chair, Board of Directors
Member, Executive Committee
/s/ Xxxx Xxxxxxxx
--------------------------------
XXXX XXXXXXXX
Member, Executive Committee
/s/ Xxxxxx Xxxxx
---------------------------------
XXXXXX XXXXX
Member, Executive Committee
ATTEST:
/s/ D. Xxxx Xxxxx
---------------------------------
D. XXXX XXXXX, Secretary
Senior Executive Vice-President
5
