Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made and entered
into as of this 8th day of September, 1997, to be effective as of September 8,
1997 ("Effective Date"), by and between LOCAL FINANCIAL CORPORATION, a Delaware
corporation ("LFC"), its wholly-owned subsidiary, LOCAL FEDERAL BANK, F.S.B., a
federal stock savings bank ("Bank"), both with address of 0000 X. X. 00xx
Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, and XXX X. XXXXXX, an individual resident
of the State of Oklahoma, with mailing address of 0000 Xxxxxx Xxxx Xxxxx, Xxxxx,
Xxxxxxxx 00000 ("Norton").
R E C I T A L S:
A. LFC is a one-bank holding company which owns all of the
issued and outstanding stock of Bank. Bank is engaged in the banking business in
the State of Oklahoma, with principal offices in Oklahoma City, Oklahoma, and
branch locations at various sites in the State of Oklahoma. Bank owns all of the
issued and outstanding stock of LOCAL AMERICA BANK, F.S.B., a federal stock
savings bank ("Local America") with principal offices in Tulsa, Oklahoma, and
branch locations at various sites in the State of Oklahoma. LFC and Bank are
desirous of employing Norton to serve as President of LFC and Bank,
respectively, for the term and subject to the other terms and conditions set
forth and described below in this Employment Agreement;
X. Xxxxxx is a highly experienced senior executive officer of
banks, and in particular, federal stock savings banks. Norton is desirous of
entering into an agreement with LFC and Bank whereby Norton will be employed by
LFC and Bank to be the President of LFC and Bank, respectively, upon the terms
and conditions provided in this Employment Agreement; and
X. Xxxxxx is willing to enter into this Employment Agreement
with LFC and Bank to serve as President of LFC and Bank, respectively, in
consideration of the payments to be made to him by Bank, and certain other
additional and valuable benefits and inducements to be granted to him by LFC and
Bank, as hereinafter set forth and in accordance with the conditions hereinafter
provided;
D. The respective Boards of Directors of the Bank and of LFC
have each specifically approved and authorized the terms and conditions of this
Agreement and the entry into this Agreement with Norton so as to obtain his
employment by LFC and the Bank and his operational management thereof; and
E. Accordingly, LFC, the Bank and Norton desire to enter into
this Agreement to set forth the terms and conditions of the employment
relationships between LFC, the Bank and Norton.
NOW, THEREFORE, in consideration of the aforementioned
recitals, the premises, the mutual covenants set forth herein and of such other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by LFC, the Bank and Norton, respectively, they each do hereby
covenant and agree as follows:
1. Employment. Norton is hereby employed as the President of
LFC and of the Bank, respectively, to manage and direct the conduct of their
banking businesses. Norton shall devote all of his business time exclusively to
LFC's and the Bank's business and shall render services to LFC and to the Bank,
respectively, as their President to the best of his ability for and on behalf of
LFC and the Bank, respectively. Norton shall comply with all laws, statutes,
ordinances, rules and regulations relating to the performance of services for
LFC and for the Bank under this Agreement. During the term of this Agreement,
Norton shall serve as the President of LFC and of the Bank, and in that capacity
shall, subject to the control of the Board of Directors of LFC and of the Bank,
respectively, generally operate the business and affairs of LFC and of the Bank.
As President of LFC and of the Bank, Norton shall exercise and perform such
other powers and duties as are usually vested in a president of a bank holding
company and/or federal savings bank, or as may be from time to time prescribed
or assigned to him by the Board of Directors of LFC, or by the Board of
Directors of the Bank, or as may be otherwise prescribed or assigned to him by
the By-Laws of LFC or of the Bank. During the term of this Agreement, Norton
shall not, at any time or place, directly or indirectly, engage in the same
business in which LFC or the Bank is engaged for any other person or entity to
any extent whatsoever, other than to the extent required by the terms and
conditions of this Agreement, or as a private investor for his own account, in a
publicly held corporation engaged in the banking business, unless his holdings
shall not exceed five percent (5%) of the issued and outstanding stock of such
publicly held corporation and, so long as such investment activities do not
interfere with the performance of Norton's duties for LFC and for the Bank
during the term of this Agreement. The designation by LFC's or the Bank's Board
of Directors of any other duties or any other titles for Norton during the term
of this Agreement shall not affect Norton's compensation as provided for in this
Agreement.
2. Term of Employment. Subject to the provisions on
termination of employment contained in Section 9 herein, the term of the
employment provided for herein of Norton by LFC and by the Bank shall be for a
period of three (3) years, beginning on the Effective Date of this Agreement and
ending on the date which is the last day prior to the third (3rd) anniversary of
the Effective Date, unless extended as provided in this Section 2, below.
Subject to the provisions on termination of employment as provided for in
Section 9, below, prior to the first anniversary of the Effective Date of this
Agreement and prior to each anniversary of that date thereafter, the Board of
Directors of LFC and the Board of Directors of the Bank, respectively, shall
consider, review (with appropriate corporate documentation thereof, and after
taking into account all relevant factors, including Norton's performance) and,
if appropriate, explicitly approve a one (1) year extension of the remaining
term of this Agreement. The term of this Agreement shall continue to so extend
each year if the Boards of Directors so approve such extension, respectively,
unless Norton gives written notice to LFC or the Bank, respectively, of Norton's
election not to extend the term, with such notice not to be less than sixty (60)
days prior to any such anniversary date. If the Board of Directors of LFC, or
the Board of Directors of Bank, respectively, elect not to extend the term, that
Board of Directors shall give written notice to Norton of such decision not less
than sixty (60) days prior to any such anniversary date. If either party hereto
gives such timely notice to the other party that the term of this Agreement will
not be extended as of any such anniversary date, then, and in such event, this
Agreement shall terminate at the conclusion of its then remaining term.
References in this Agreement to the term of this Agreement shall be deemed to
refer both to the initial term and all successive terms hereunder.
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3. Compensation.
(a) The Bank agrees to pay Norton as a guaranteed
salary throughout the term of this Agreement, unless Norton voluntarily
resigns from his employment by LFC and by Bank during the term of this
Agreement, for whatever reason, or unless this Agreement is terminated
for cause by LFC or the Bank, as set forth and described in Section 9,
below in this Agreement, an annual base salary for the services
rendered to LFC and Bank by Norton, as described above, in the amount
of Two Hundred Forty Thousand and No/100 Dollars ($240,000.00) per
year. This salary shall be payable to Norton in twelve (12) equal,
monthly installments of Twenty Thousand and No/100 Dollars ($20,000.00)
per month for each month during which services are rendered by Norton
to LFC or the Bank during the term of this Agreement. LFC and Bank
covenant and agree that the amount of salary to be paid to Norton
during the term of this Agreement cannot be decreased by LFC or Bank
during the term of this Agreement for any reason and must be paid to
Norton in all events each month during the term of this Agreement
unless Norton voluntarily resigns from his employment by Bank during
the term of this Agreement, for whatever reason, or unless Norton is
terminated for cause by the Bank for the specific reasons set forth and
described below in Section 9 of this Agreement. Accordingly, Bank
agrees that if Norton is terminated without cause, as provided below in
Section 9 of this Agreement, he shall still be entitled to receive as
liquidated damages for the termination without cause of his employment
by LFC or the Bank under this Agreement, the full amount of his
remaining guaranteed salary under this Agreement to be paid to him in
the amount of Twenty Thousand and No/100 Dollars ($20,000.00) per month
in the same manner as if he had remained employed by the Bank during
the entire term of this Agreement. Norton and the Bank hereby expressly
covenant and agree, anything in this Agreement to the contrary
notwithstanding, including, without limitation, the provisions of
Sections 3 through 6 and Section 9 of this Agreement, that any payments
made to Norton by Bank pursuant to this Agreement, or otherwise, are in
all respects expressly subject to and conditioned upon their compliance
with the provisions of 12 U.S.C. ss.1828(k) and any regulations
promulgated thereunder.
(b) Bank shall pay Norton his annual base salary on a
monthly basis on the first day of each month, subject to normal salary
deductions for the amount so owing, including, but not limited to,
Social Security, Medicare, federal and state income withholding taxes.
Norton's base annual salary may be increased in the future, from time
to time, by the actions of LFC's or Bank's Board of Directors, based
upon Norton's performance and other relevant factors and LFC's or
Bank's Board of Directors will
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review Norton's salary for the purposes of determining any appropriate
increase in the base annual salary of Norton at least annually. In
addition, LFC or Bank may, from time to time, enter into supplemental
agreements or memoranda in writing with Norton for the award and
payment to him of additional compensation or bonuses upon such terms
and conditions as LFC or Bank shall deem to be in their respective best
interests, and in the event of the execution by LFC or Bank of any such
agreement or memoranda, the right of Norton to additional compensation
or bonuses shall be determined in accordance with the applicable
provisions thereof. In the absence of any such supplemental agreements
or memoranda, neither LFC or Bank shall be obligated to pay to Norton
any additional compensation or bonus whatsoever, irrespective of the
payments of additional compensation or bonus to Norton in any past or
succeeding year, or the payment of additional compensation or bonus to
other employees of LFC or Bank at the end of the year, but may do so in
the sole discretion of LFC's or Bank's Board of Directors,
respectively, and the determination of LFC's or the Bank's Board of
Directors, respectively, in the exercise of such discretion, with
respect to the payment and amount of any additional compensation or
bonus to Norton for any fiscal year of LFC or Bank if made, shall be
final and conclusive.
4. Granting of Incentive Stock Options. As an additional
inducement to Norton to enter into this Agreement with LFC and Bank and to
render his services to LFC and Bank upon a long-term basis and as additional
compensation to him for services to be rendered under the provisions of this
Agreement, LFC, has agreed to grant to Norton certain stock options to acquire
LFC's Common Stock, contingent upon the closing of a private placement of LFC's
Common Stock under a Private Placement Memorandum on or before September 1, 1997
(the "Offering"). The stock options have been granted by LFC to Norton pursuant
to that certain Local Financial Corporation Stock Option Plan ("Plan") to be
enacted by LFC contingent upon the closing of the Offering. In order to evidence
these stock options, LFC has also prepared and will execute and enter into with
Norton, contemporaneously with this Agreement, contingent upon the closing of
the Offering, that certain Local Financial Corporation Stock Option Agreement
("Stock Option Agreement"), which will set forth the terms and conditions of the
stock options to be granted to Norton by LFC in accordance herewith and the
manner and method of exercising such options and acquiring such stock by Norton.
Attached as Exhibit "A" to this Agreement, and by this reference made a part
hereof, is an executed copy of the Stock Option Agreement, entered into by and
between LFC and Norton this same date in fulfillment of the contractual
obligations of LFC under the provisions of this Section 4 of the Agreement.
5. Norton's Additional Employment Benefits. In addition to the
annual base salary and the discretionary bonuses, provided for in Section 3
above, LFC and Bank agree to provide to Norton, or to reimburse Norton for, the
following additional employment benefits and expenses:
(a) During the term of this Agreement, Bank shall
furnish and provide to Norton, at its sole cost and expense, the
following described employee benefits, upon the same basis that Bank
accords these same benefits to its other executive employees.
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In the event Bank does not provide any of the following benefits to its
executive level employees, it shall not be required to initiate a
program solely to provide such benefits to Norton. However, if Bank
should at any time in the future provide such benefits to its
employees, any such benefits shall also be provided to Norton upon the
same basis that it is provided to such other employees of Bank, whether
or not such benefit is listed below:
(i) hospitalization, dental, accident and
major medical insurance benefits to Norton and all members of
Norton's immediate family. The opportunity to participate in
any group life insurance program on a basis comparable to the
participation provided under any plans of such kind to other
executive officers of Bank. In any case, Bank will be expected
to make contributions towards the cost of such plans for
Norton at the same rate and in the same manner as it makes for
its other employees of like status who participate therein.
(ii) The right and opportunity to
participate in and become vested under and pursuant to the
Defined Benefit Pension Plan maintained by Bank, or any other
qualified pension and profit sharing plans hereafter
maintained by Bank, upon the same basis accorded to other
full-time employees of Bank. In addition, Bank shall provide
to Norton such other fringe benefits as may be provided by
Bank to its executives, or its other employees, in accordance
with the policies heretofore or hereafter adopted by Bank.
(b) In addition to the above and foregoing fringe
benefits of employment which the Bank customarily provides to
all of its executive employees, Norton shall be entitled to
receive the following specific additional benefits in
consideration and as additional compensation to him for
entering into this Agreement and agreeing to provide the
services required herein to LFC and to the Bank:
(i) Payment of his dues for an individual
membership in his name in a golf and country club of his
choosing located in Oklahoma County, Oklahoma; provided,
however, the Bank's obligation shall be for dues and any
member assessments only, and it shall have no obligation to
pay any charges or expenses incurred by Norton as a member of
the aforesaid country club;
(ii) Throughout the term of this Agreement,
Norton shall be provided an automobile of a type and kind
comparable to that which Bank provides to its other executive
officers for use in their employment by the Bank;
(iii) A one-time payment of a moving/housing
allowance in the sum of Fifty Thousand and No/100 Dollars
($50,000.00) to be used by Norton to relocate his family from
the Miami, Oklahoma area to the Oklahoma City metropolitan
area. In this regard, Norton agrees that he will cause his
family to be relocated to the Oklahoma City metropolitan area
from the Miami, Oklahoma area as soon as feasible based upon
the marketing of his present home, and the location of a
suitable home in the Oklahoma City area.
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(c) In addition to the compensations set forth above,
Norton shall also be entitled to reimbursement by Bank for his actual
out-of-pocket expenses incurred in the conduct of Bank's business,
which shall be limited to ordinary and necessary items and such other
valid expenditures as may be determined to be appropriate expenditures
on behalf of Bank by its Board of Directors, from time to time. The
reimbursement of said expenses and the amounts and the extent to which
they shall be reimbursed shall be decided on a case-by-case basis by
the Board of Directors of Bank, as the case may be; provided, however,
the Board of Directors of Bank may, at any time, and from time to time,
establish a policy or policies for allowing certain amounts for
reimbursements of certain types of specified business expenses,
incurred by Norton. Norton shall, in every instance, wherever
practical, support any claims for reimbursement for expenses by
adequate proof of such expenditures in the form of cancelled checks,
vouchers, bills, or in any other forms satisfactory to the Board of
Directors of Bank.
(d) Norton shall be entitled to such period of
vacation with pay during any one (1) year of the term of this Agreement
as may be permitted by the Board of Directors of Bank on a case-by-case
basis, in its sole discretion, or pursuant to any policy established by
the Board of Directors of the Bank for the benefit of its executive
employees, from time to time. Norton agrees that he will take vacation
days only at such times that will not unduly interfere with or hamper
the operation of Bank's business. Norton shall not be entitled to
receive any additional compensation from the Bank on account of his
failure to take a paid vacation as authorized pursuant to this
Subsection. Norton shall also not be entitled to accumulate unused paid
vacation time from one calendar year to the next calendar year during
the term of this Agreement.
6. Disability.
(a) For purposes of this Agreement, Norton shall be
deemed to be "disabled" or have a "disability" if Norton shall have an
illness, injury or other physical or mental condition which results in
Norton's inability to perform substantially the duties he performed in
his employment capacity for LFC and Bank under this Agreement to the
extent he was performing such duties immediately prior to the
commencement of such condition.
(b) If Norton shall be disabled for not more than
ninety (90) days during any twelve (12) month period of the term of
this Agreement, then, Norton, during the continuance of such
disability, shall remain employed by Bank hereunder, shall continue to
receive his base salary and other compensation pursuant to this
Agreement and otherwise shall continue to have all of the rights and be
subject to all of Norton's obligations and duties under this Agreement,
other than the obligation and duty to render services to Bank otherwise
in accordance with this Agreement during the period of such disability.
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(c) If Norton shall be disabled for more than ninety
(90) days during any twelve (12) month period during the term of this
Agreement, but not more than one hundred twenty (120) days during any
twelve (12) month period, then, from and after the expiration of the
ninetieth (90) day of disability and during the continuance of such
disability up to and including the day immediately preceding the one
hundred twentieth (120th) day, Norton shall be deemed to have taken a
leave of absence from the Bank commencing on the ninetieth (90th) day
of such disability and, during the continuance of such disability, the
following provisions shall apply:
(i) Norton's annual base salary shall be
apportioned up to and including the ninetieth (90th) day of
such disability and from and after the ninetieth (90th) day of
such disability and up to and including the day immediately
preceding the one hundred twentieth (120th) day of such
disability, neither LFC nor Bank shall pay any salary to
Norton and Norton shall receive no salary from LFC or Bank.
(ii) Bank, in the sole discretion of its
Board of Directors, shall have the right and power to remove
Norton from the position of President of the Bank, and LFC, in
turn, in the sole discretion of LFC's Board of Directors,
shall have the right and power to remove Norton from the
position which he holds as President, or either of them may
delegate all or any portion of Norton's duties as President of
the Bank or LFC, respectively, to one or more other employees
of the Bank or LFC, respectively.
(iii) Norton shall otherwise have all of the
rights and be subject to all of Norton's obligations and
duties under this Agreement, except that Norton shall have no
obligation or duty to render services to LFC or the Bank,
respectively, otherwise in accordance with this Agreement
during such period of time; provided that Bank shall be
excused from providing any insurance coverage or benefits
which, by reason of Norton's disability, Bank shall not be
able to obtain, continue or maintain at substantially the same
cost or expense or substantially the same terms and conditions
that Bank was able to obtain, continue or maintain immediately
prior to the commencement of Norton's disability.
(d) If Norton shall be disabled for more than one
hundred twenty (120) days in any twelve (12) month period during the
term of this Agreement, the employment of Norton by LFC and Bank
hereunder shall cease and terminate pursuant to the provisions of
Section 9, below.
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(e) If LFC and the Bank and Norton are unable to
agree whether Norton is disabled within the meaning of this Section 6,
then this issue shall be submitted to arbitration in the manner
provided for in Section 13 of this Agreement below.
7. Standards. Norton shall perform all of his duties and
responsibilities under this Agreement in accordance with such reasonable
standards as are established from time to time by the Board of Directors of the
Bank or of LFC, respectively. The reasonableness of such standards shall be
measured against standards for executive performance generally prevailing in the
federal stock savings bank industry.
8. Confidential Information.
(a) Norton acknowledges that in Norton's employment
under this Agreement, Norton will be making use of, acquiring and
adding to the Bank's trade secrets and its confidential and proprietary
information of a special and unique nature and value relating to such
matters as, but not limited to, the Bank's depositor list, loan
customers, business operations, internal structure, financial affairs,
programs, software, systems, procedures, manuals, confidential reports,
lists of investors and prospective investors and sales and marketing
methods, as well as the amount, nature and type of services and methods
used and preferred by the Bank and its investors, all of which shall be
deemed to be Confidential Information for purposes of this Agreement.
Norton acknowledges that such Confidential Information has been and
will continue to be of central importance to the business of the Bank
and that disclosure of it to, or its use by, others could cause
substantial loss to the Bank. Accordingly, during the term of this
Agreement and upon and after leaving the employ of Bank for any reason
whatsoever, Norton shall not, for any purpose whatsoever, directly or
indirectly, divulge or disclose to any person or entity any of such
Confidential Information which was obtained by Norton as a result of
Norton's employment with Bank or any trade secrets of the Bank, but
shall hold all of the same confidential and inviolate.
(b) All contracts, agreements, financial books,
records, instruments and documents, a depositor list, borrower list,
investor list, memoranda, data, reports, programs, software, tapes,
rolodexes, telephone and address books, letters, research, cardex,
listings, programming and any other instruments, records or documents
relating or pertaining to the business of LFC or of the Bank
(collectively herein the "Records") shall at all times be and remain
the property of LFC and the Bank, respectively. Upon termination of
this Agreement and Norton's employment under this Agreement for any
reason whatsoever, Norton shall return to LFC or the Bank,
respectively, all Records (whether furnished by LFC or the Bank or
prepared by Norton).
(c) All inventions and other creations, whether or
not patented, or copyrightable, and all ideas, reports and other
creative works, including, without limitation, computer programs,
manuals and related materials, made or conceived in whole or in part by
Norton while employed by LFC or the Bank which relate in any manner
whatsoever to the business, existing or proposed, of LFC or the Bank or
any other business or research or developmental efforts in which LFC or
the Bank, or any of its subsidiaries or affiliates engages in during
Norton's employment by LFC and the Bank will be disclosed promptly by
Norton to LFC and the Bank and shall be the sole and exclusive property
of LFC or the Bank, as the case may be.
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9. Termination of Employment.
(a) The Board of Directors of the Bank and/or the
Board of Directors of LFC, respectively, may terminate Norton's
employment by the Bank and/or by LFC, respectively, under this
Agreement, with or without cause, at any time during the term hereof,
effective upon delivery of written notice to that effect to Norton, but
any such termination by the Bank or LFC, as the case may be, of Norton
other than termination of his employment for cause, as described below
in this Section, shall not prejudice Norton's right to receive the full
amount of the remaining compensation which would have otherwise been
paid him throughout the term of this Agreement on the same basis and at
the same times and to receive all such other fringe benefits to which
he would have otherwise been entitled to receive during the term of
this Agreement. On the other hand, Norton shall not have any right to
receive any further compensation or any other benefits to which he
would have otherwise been entitled under this Agreement after his
voluntary resignation from his employment by the Bank or LFC, for
whatever reason, or after his termination from his employment for cause
by the Bank or LFC, in accordance with the terms of this Agreement,
except for the vested rights of Norton hereunder, i.e., any and all
compensation benefits and rights which Norton was entitled to receive
prior to the effective date of such termination. Termination for cause
shall mean termination because of Norton's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties under
this Agreement, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or of a final
cease-and-desist order, or any material breach by Norton of any
provision of this Agreement. In determining the incompetence of Norton,
the acts or omissions of Norton shall be measured against standards
generally prevailing in the federal savings bank industry. Unless
Norton voluntarily resigns from his employment by the Bank during the
term of this Agreement, for whatever reason, or unless the termination
by the Bank or LFC of Norton's employment under this Agreement is for
just cause, as previously stated, the Bank shall be obligated to
continue to pay to Norton his compensation and to provide to him all
other benefits of his employment as set forth in this Agreement during
the remaining term of this Agreement after the termination of his
employment on the same basis and at the same times as set forth and
described above in this Agreement. LFC, the Bank and Norton agree that
it would be difficult to ascertain the amount of damages owing to
Norton if this Agreement is terminated without cause during the term of
this Agreement, and accordingly, that the amount to be paid by Bank to
Norton as compensation and the other benefits to be provided by Bank to
Norton during the remaining term of this Agreement as if Norton had
remained employed by LFC or the Bank in such instance, shall be deemed
to be liquidated damages for the
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termination of this Agreement by Bank or LFC without cause and not as a
forfeiture or penalty. Norton agrees the damages resulting from the
termination of his employment by LFC or the Bank without cause during
the term of this Agreement would be difficult and impractical to
ascertain and that therefor the amount of liquidated damages, as
determined in the manner set forth above in this Section, would be a
fair and reasonable amount of damages under such circumstances, and,
accordingly, Norton agrees that his sole remedy, in the event of the
termination of his employment hereunder by the Bank or LFC without
cause, shall be strictly limited to his right to receive such
liquidated damages, and that he shall not have any right to seek any
other equitable or legal remedy or other damages in such event, whether
actual, special, consequential or punitive, by reason thereof.
(b) If Norton is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a
notice served under the provisions of Section 8(e)(3) or (g)(1) of the
Federal Deposit Insurance Act [12 U.S.C. ss.1818(e)(3) and (g)(1)], the
Bank's obligations under this Agreement shall be suspended as of the
date of service of said notice pursuant to the Act unless stayed by
appropriate proceedings. If the charges in the notice are dismissed,
the Bank may, in its discretion, (i) pay Norton all or part of the
compensation which was withheld by the Bank while its obligations under
this Agreement were suspended in accordance herewith, and (ii)
reinstate (in whole or in part) any of its obligations which were so
suspended.
(c) If Norton 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) or (g)(1) of the Federal Deposit
Insurance Act [12 U.S.C. ss.1818(e)(4) or (g)(1)], all obligations of
the Bank under this Agreement shall terminate as of the effective date
of the order; provided, however, the vested rights of the Bank and
Norton under this Agreement shall not be affected thereby.
(d) If the Bank is in default (as defined in Section
3(x)(1) of the Federal Deposit Insurance Act), all obligations under
this Agreement shall terminate as of the date of such default, but this
Section 9(d) shall not affect any vested rights of the Bank or Norton
under this Agreement.
(e) All obligations under this Agreement shall be
terminated, except to the extent determined that the continuation of
this Agreement is necessary for the continued operations of the Bank:
(i) by the Director of the Federal
Deposit Insurance Corporation, or
his or her designee, at the time the
Federal Deposit Insurance
Corporation or the Resolution Trust
Corporation enters into an agreement
to provide assistance to or on
behalf of the Bank under the
authority contained in ss. 13(c) of
the Federal Deposit Insurance Act;
or
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(ii) by the Director of the Federal
Deposit Insurance Corporation, 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 Bank or Norton under the
Agreement that have already vested, however, shall not be affected by
such action.
(f) If Norton resigns voluntarily from his employment
by the Bank during the term of this Agreement, for whatever reason,
then, and in such event, all of the rights, benefits and entitlements
of Norton under this Agreement, including without limitation, his right
to receive salary payments, shall cease on the date of such voluntary
resignation, except for the rights of Norton which have vested prior to
the date of his voluntary resignation.
10. No Assignment or Succession; Death of Norton. This
Agreement is personal to Norton and to the Bank and LFC. Neither Norton nor the
Bank or LFC may assign or delegate any of his or their respective rights or
obligations under this Agreement without first obtaining the prior written
consent of all of the other parties hereto. In the event of Norton's death
during the term of this Agreement, all of the rights and entitlements of Norton
under this Agreement shall cease except for the rights of Norton which have
vested prior to the date of his death. Any and all remaining vested compensation
or benefits to which Norton is entitled under this Agreement prior to the date
of his death shall be payable by Bank to the estate of Norton or to the person
designated by Norton in his Last Will and Testament to receive such payments or
benefits. In the event the Bank is involuntarily dissolved for any reason by the
Office of Thrift Supervision ("OTS") or any other governmental entity having
authority over the Bank, this Agreement shall terminate as of the date of such
dissolution and Norton shall have no further rights except for the rights which
are vested in him prior to the effective date of such dissolution.
11. Amendments or Additions: Action by Bank's Board of
Directors. No amendments or additions to this Agreement shall be binding unless
in writing and executed by both LFC and the Bank and by Norton. The prior
approval by the affirmative vote of the majority of the full Board of Directors
of the Bank or of LFC, respectively, shall be required in order for the Bank or
LFC, respectively, to authorize and execute any amendments or additions to this
Agreement, to give any consents or waivers of the provisions of this Agreement,
or to take any other action under this Agreement, including any termination of
the employment of Norton, with or without cause, under the provisions of Section
9(a), above.
12. Reimbursement of Disallowed Expenses. If any expenses paid
by Bank for Norton or any reimbursement of expenses by Bank to Norton shall,
upon audit or other examination of the income tax returns of Bank, be determined
not to be allowable deductions from the gross income of Bank and such
determination shall be acceded to by Bank, or such determination shall be made
final by the appropriate taxing authority or a final judgment of a court of
competent jurisdiction, and no appeal shall be taken therefrom, or the
applicable period for the filing of a notice of appeal shall have expired, then,
and in such event, Norton shall rebate to Bank the dollar amount of the expenses
so disallowed by such taxing authority. Such repayment may not be waived by the
Bank.
11
13. Binding Arbitration. Unless LFC, Bank and Norton all
expressly agree otherwise in writing, all disputes relating to this Agreement,
or any breach thereof or the meaning and effect of any term and provisions
hereof, shall be submitted to binding arbitration by Bank, LFC and Norton
pursuant to the provisions of the Oklahoma Uniform Arbitration Act, 15 O.S.
ss.801, et seq. (the "Act"), and in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). In the event a
dispute arises which cannot be informally resolved by the parties hereto, a
panel of three (3) arbitrators shall be selected to settle the dispute. Within
twenty (20) days following the demand by either party for arbitration of a
dispute arising under this Agreement, LFC and Bank shall jointly appoint an
arbitrator knowledgeable and experienced in federal savings banks and Norton
shall appoint an arbitrator knowledgeable and experienced in federal savings
banks. The two (2) arbitrators so appointed shall together appoint a third
arbitrator, also knowledgeable and experienced in federal savings banks, within
twenty (20) days following the appointment of the last arbitrator selected by
LFC and the Bank and by Norton. In the event that the two (2) arbitrators
selected by LFC and the Bank and by Norton are unable to mutually select a third
arbitrator within the twenty (20) day period, the third arbitrator shall be
selected by the then presiding judge of the Oklahoma County, Oklahoma District
Court. If the presiding judge of the Oklahoma County, Oklahoma District Court is
unable or unwilling to make such selection, the parties will request that the
Chief United States District Judge of the United States District Court for the
Western District of Oklahoma make such selection. The panel of three (3)
arbitrators shall then determine a time and a place for the hearing and shall
notify the parties in writing personally or by registered mail no less than
twenty (20) days before the hearing. The arbitrators will hear the dispute in
accordance with the Act and the Rules. Each party hereto shall be entitled to be
represented by counsel and each party shall be solely responsible for the fees
of their respective counsel. A majority of arbitrators shall render a final
award within twenty (20) days following the conclusion of the hearing which
shall be final and binding upon all parties hereto. The expenses and fees of the
third arbitrator mutually selected by the first two (2) arbitrators shall be
divided equally between the parties. Each party shall be solely responsible for
the expenses and fees of the arbitrator whom it selected. The arbitrators may
include, as part of any award, for the recovery of attorney's fees by the
prevailing party. All other expenses incurred in the conduct of the arbitration
shall be divided equally between the parties. Judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
12
14. Miscellaneous Provisions.
(a) This Agreement shall be binding upon, and shall
inure to the benefit of LFC, Bank and Norton and their respective
heirs, personal and legal representatives, successors and assigns.
(b) LFC, Bank and Norton agree that the construction
and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the United States of America where
applicable and otherwise in all respects by the laws of the State of
Oklahoma.
(c) All notices required or permitted herein must be
in writing and shall be deemed to have been duly given on the date of
service and served personally or by telecopier, telex, or other similar
communication to the party or parties to whom notice is to be given, on
the next day if notice is effected by overnight mail service, or on the
third business day after mailing in the United States mail, if mailed,
to the party or parties to whom notice is to be given by registered or
certified mail, return receipt requested, postage prepaid, to the
address of such party, as set forth in the first paragraph of this
Agreement, or to such other address as any party to this Agreement may
designate to the other from time-to-time for this purpose in a manner
complying with the provisions of this section. Any communication which
is mailed by overnight mail or sent by telecopier or telex shall be
confirmed immediately, but failure to so confirm shall not affect the
effectiveness of such notice from and after the day on which such
notice is actually received.
(d) Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate
the remaining provisions hereof and any prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
(e) This Agreement contains the entire agreement and
understanding by and between LFC, the Bank and Norton with respect to
Norton's employment by LFC and the Bank, as herein described, and
supersedes all prior agreements and understandings between the parties
to this Agreement, relating to the subject matter of this Agreement. No
change or modification of this Agreement shall be valid or binding
unless the same is in writing and signed by the party intending to be
so bound. No waiver of any provision of this Agreement shall be valid
unless the same is in writing and signed by the party against whom such
waiver is sought to be enforced. Moreover, no valid waiver of any
provision of this Agreement, at any time, shall be deemed to be a
waiver of any other provision of this Agreement at such time, or will
be deemed a valid waiver of such provision at any other time.
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(f) This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
(g) Time shall be of the essence with regard to the
performance by the parties hereto of their respective obligations
hereunder.
IN WITNESS WHEREOF, LFC, the Bank and Norton have duly
executed this Agreement as of the day and year first above written to be
effective as of the date stated in the first paragraph above.
LFC: LOCAL FINANCIAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
Date: 9/8/97
BANK: LOCAL FEDERAL BANK, F.S.B.,
a federal stock savings bank
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
Date: 9/8/97
NORTON: /s/ Xxx X. Xxxxxx
----------------------------------------
Xxx X. Xxxxxx
Date: 9/8/97
14
