EXHIBIT 10.7
EMPLOYMENT AGREEMENT OF XXXXXXX X. XXXXXXXX
EMPLOYMENT AGREEMENT
This Agreement is made by and between First Clover Leaf Bank, a federal
savings bank (the "Bank"), with its principal office in Edwardsville, Illinois,
and Xxxxxxx XxXxxxxx ("Executive") and is effective as of the effective date
(the "Effective Date") of the "Merger," as that term is defined in that certain
Agreement and Plan of Reorganization dated as of February 3, 2006 by and between
First Federal Financial Services, MHC, First Federal Financial Services, Inc.,
First Clover Leaf Financial Corp., Clover Leaf Bank ("CLB") and Clover Leaf
Financial Corp. ("CLFC") (the "Merger Agreement"). References herein to the
"Company" mean First Clover Leaf Financial Corp., a Maryland corporation that
owns 100% of the common stock of the Bank on the Effective Date. The Company is
a signatory to this Agreement for the sole purpose of guaranteeing the Bank's
performance hereunder.
WHEREAS, Executive has served as an officer of CLB, which was merged with
and into the Bank as of the Effective Date pursuant to the Merger Agreement; and
WHEREAS, the Bank wishes to assure itself of the services of Executive as
an officer of the Bank following the Merger for the period provided in this
Agreement; and
WHEREAS, Executive agrees that this Agreement supersedes, replaces and
terminates her Change in Control Agreement dated as of December 31, 2003 with
CLB and CLFC.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
Executive shall serve as the Senior Vice President - Chief Financial
Officer of the Bank. In this position, Executive shall be responsible for
overseeing the financial functions of the Bank, and establishing and
implementing the financial plans and policies of the Bank, in addition to
directing and overseeing the Bank's operational policies and daily processing,
as it relates to all electronic banking services, item processing and
credit/debit card fraud protection, in each case pursuant to direction from the
Chief Executive Officer. Executive also agrees to serve, if appointed or
elected, as an officer and director of any subsidiary or affiliate of the Bank.
2. TERM AND DUTIES.
(a) The term of this Agreement and the period of Executive's employment
hereunder will begin as of the Effective Date and continue for a period of
twelve (12) full calendar months thereafter. Commencing on the first anniversary
date of this Agreement (the "Anniversary Date"), and continuing at each
Anniversary Date thereafter, the Agreement shall renew for an additional year
such that the remaining term shall be twelve (12) full calendar months;
provided, however, that the Board shall at least sixty (60) days before such
Anniversary Date conduct a comprehensive performance evaluation and review of
the Executive for purposes of determining whether to extend this Agreement. The
Board shall give the 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 the Executive within said time frame, the term of
this Agreement shall not be extended.
(b) During the period of her employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence approved by the Chief Executive Officer, Executive shall
devote substantially all her business time, attention, skill, and efforts to the
faithful performance of her 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, in
the Board's judgment, will not present any conflict of interest with the Bank,
or materially affect the performance of Executive's duties pursuant to this
Agreement. Notwithstanding the preceding sentence, no approval is required for
the Executive to participate or serve in (i) outside organizations in which the
Executive is serving as of the Effective Date; (ii) religious or educational
organizations which Executive or Executive's children may attend from time to
time; or (iii) affiliates of such organizations.
3. COMPENSATION, BENEFITS AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b). Beginning on
the Effective Date, the Bank shall pay Executive as compensation a salary of not
less than $91,000 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 the Chief
Executive Officer, and the Bank may increase, but not decrease (except a
decrease that is generally applicable to all employees) Executive's Base Salary
(with any increase in Base Salary to become "Base Salary" for purposes of this
Agreement). In addition to the Base Salary, the Bank shall provide Executive at
no cost to Executive with all such other benefits as are provided uniformly to
permanent full-time employees of the Bank. Base Salary shall include any amounts
of compensation deferred by Executive under qualified and nonqualified plans
maintained by the Bank.
(b) Executive will be entitled to participate in or receive benefits
under any employee benefit plans including, but not limited to, retirement
plans, supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident insurance plans, medical coverage or any other employee
benefit plan or arrangement made available by the Bank or the Company in the
future to its senior executives and key management employees, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Executive will be entitled to participate in any
incentive compensation and bonus plans offered by the Bank or the Company in
which Executive is eligible to participate. Nothing paid to Executive under any
such plan or arrangement will be deemed to be in lieu of other compensation to
which Executive is entitled under this Agreement.
(c) In addition to the Base Salary, the Bank shall pay or reimburse
Executive for all reasonable travel and other reasonable expenses incurred by
Executive performing her
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obligations under this Agreement and may provide such additional compensation in
such form and such amounts as the Chief Executive Officer may from time to time
determine. The Bank shall reimburse Executive for her ordinary and necessary
business expenses, including, without limitation, fees for memberships in such
clubs and organizations as Executive and the Chief Executive Officer shall
mutually agree are necessary and appropriate for business purposes, and travel
and entertainment expenses, incurred in connection with the performance of her
duties under this Agreement.
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 termination by the Bank of Executive's full-time
employment hereunder for any reason other than termination
governed by Section 5 (Termination for Cause) or termination
governed by Section 6 (termination due to Disability or
death); or
(ii) Executive's 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;
(C) a relocation of Executive's principal place of
employment by more than thirty (30) miles from its
location at the Effective Date of this Agreement;
(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 Company or the Bank;
or
(F) a material breach of this Agreement by the Bank.
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 her employment under this
Agreement by resignation upon not less than thirty
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(30) days prior written Notice of Termination, as defined in
Section 9(a), given within ninety (90) days after the event
giving rise to said right to elect. Notwithstanding the
preceding sentence, in the event of a continuing breach of
this Agreement by the Bank, Executive, after giving due notice
within the prescribed time frame of an initial event specified
above, shall not waive any of her rights under this Agreement
and this Section solely by virtue of the fact that Executive
has submitted her 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 the
Company (or any successor thereto) on the effective date of,
or at any time following, a Change in Control, or (B)
Executive's resignation from the employment with the Bank or
the Company (or any successor thereto) following a Change in
Control as a result of any event described in Section
4(a)(ii)(A), (B), (C), (D), or (F) above. For these purposes,
a "Change in Control" shall mean a change in control of the
Bank or the Company of a nature that: (i) would be required to
be reported in response to Item 5.01 of the current report on
Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 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 Company representing 25% or
more of the combined voting power of Company's outstanding
securities except for any securities purchased by the Bank's
employee stock ownership plan or trust; or (b) individuals who
constitute the Board of Directors of the Company on the date
hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least a majority of the
directors of the Board, shall be, for purposes of this clause
(b), considered as though he or she were a member of the
Incumbent Board; or (c) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of
the Bank or the Company or similar transaction in which the
Bank or Company is not the surviving institution occurs.
(b) Upon the occurrence of an Event of Termination under Sections 4(a) (i)
or (ii), on the Date of Termination, as defined in Section 9(b), the Bank shall
be obligated to pay Executive, or, in the event of her subsequent death, her
beneficiary or beneficiaries, or her estate, as the case may be, as severance
pay or liquidated damages, or both, an amount equal to the sum of: (i) her
earned but unpaid salary as of the date of her termination of employment with
the Bank; (ii) the benefits, if any, to which she is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company's officers and
employees; (iii) the remaining payments that Executive would have
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earned, in accordance with Sections 3(a) and 3(b), if she had continued her
employment with the Bank for twelve (12) full months following such Event of
Termination, and had earned the maximum bonus or incentive award in each
calendar year that ends during such term; and (iv) the annual contributions or
payments that would have been made on Executive's behalf to any employee benefit
plans of the Bank as if Executive had continued her employment with the Bank for
twelve (12) full months following such Event of Termination, based on
contributions or payments made (on an annualized basis) at the Date of
Termination. Any payments hereunder shall be made in a lump sum within thirty
(30) days after the Date of Termination, or in the event that Section 409A of
the Internal Revenue Code of 1986, as amended ("Code") applies, no later than
the first day of the seventh month following the Date of Termination. Such
payments shall not be reduced in the event Executive obtains other employment
following termination of employment.
(c) Upon the occurrence of an Event of Termination under Section
4(a)(iii), on the Date of Termination, as defined in Section 9(b), the Bank
shall be obligated to pay Executive, or, in the event of her subsequent death,
her beneficiary or beneficiaries, or her estate, as the case may be, as
severance pay or liquidated damages, or both, an amount equal to the sum of: (i)
her earned but unpaid salary as of the date of her termination of employment
with the Bank; (ii) the benefits, if any, to which she is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank or Company's officers and
employees; (iii) the remaining payments that Executive would have earned, in
accordance with Sections 3(a) and 3(b), if she had continued her employment with
the Bank for an eighteen (18) month period following such Event of Termination,
and had earned the maximum bonus or incentive award in each calendar year that
ends during such term; and (iv) the annual contributions or payments that would
have been made on Executive's behalf to any employee benefit plans of the Bank
or the Company as if Executive had continued her employment with the Bank for an
eighteen (18) month period following such Event of Termination, based on
contributions or payments made (on an annualized basis) at the Date of
Termination. Any payments hereunder shall be made in a lump sum within thirty
(30) days after the Date of Termination, or in the event that Section 409A of
the Code applies, no later than the first day of the seventh month following the
Date of Termination. Such payments shall not be reduced in the event Executive
obtains other employment following termination of employment.
(d) To the extent required under applicable law, upon the occurrence of an
Event of Termination, the Bank will cause to be continued life, medical and
disability coverage substantially identical to the coverage maintained by the
Bank for Executive and her family prior to Executive's termination.
(e) Notwithstanding anything in this Agreement to the contrary, in no
event shall the aggregate payments or benefits to be made or afforded to
Executive under this Section constitute an "excess parachute payment" under
Section 280G of the 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.
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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), neither the Company nor the Bank may
terminate Executive for Just Cause unless and until there shall have been
delivered to her a Notice of Termination, finding that in the good faith opinion
of the Chief Executive Officer, Executive was guilty of 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 through the Date of
Termination, any unvested stock options and related limited rights granted to
Executive under any stock option plan shall not be exercisable nor shall any
unvested awards granted to Executive under any stock benefit plan of the Bank,
the Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination, any such unvested stock options and related limited rights and any
such unvested awards shall become null and void and shall not be exercisable by
or delivered to Executive at any time subsequent to such Termination for Just
Cause. In the Event of Executive's Termination for Just Cause, the Executive
shall resign immediately as a director of the Company and the Bank, and as a
director and/or officer of any subsidiary or affiliate of the Company and/or the
Bank.
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 her 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 Company or the Bank (or, if the Company or
the Bank has no such plan in effect, that impairs Executive's ability to
substantially perform her duties under this Agreement for a period of one
hundred eighty (180) consecutive days). The Chief Executive Officer shall
determine in good faith, based upon competent medical advice and other factors
that the Chief Financial Officer reasonably believes 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 Chief Executive Officer may require Executive
to submit to such physical or mental evaluations and tests as the Chief
Financial Officer deems reasonably appropriate, at the Bank's expense. 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
receive benefits under any disability program sponsored by the Company or the
Bank, provided that such benefit is not less than the benefit provided in the
following sentence of this Section 6(a). In the event the Company or the Bank
does not sponsor any disability programs, the Executive shall continue to
receive her Base Salary at the rate in effect on the Date of Termination for the
remainder of the then-current term.
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(b) In the event of Executive's death during the term of this Agreement,
her estate, legal representatives or named beneficiary or beneficiaries (as
directed by Executive in writing) shall be paid Executive's Base Salary, at the
rate in effect at the time of Executive's death for the remainder of the
then-current term.
7. TERMINATION UPON RETIREMENT
Termination of Executive's employment based on "Retirement" shall mean
termination of Executive's employment on or after age 65 unless extended by the
Board or in accordance with any retirement policy established by the Bank or the
Company with Executive's consent with respect to her. Upon termination of
Executive's employment based on Retirement, no amounts or benefits shall be due
Executive under this Agreement, and Executive shall be entitled to all benefits
under any retirement plan of the Bank and other plans to which Executive is a
party.
8. RESIGNATION FROM BOARDS OF DIRECTORS
In the event of termination of Executive's employment for any reason other
than upon a Change in Control, Executive shall resign as a director of the
Company and the Bank, and/or as a director and/or officer of any subsidiary or
affiliate of the Company and/or the Bank.
9. NOTICE.
(a) Any notice required hereunder shall be in writing and hand-delivered
to the other party. Hand delivery to the Bank may be made to the Chief Executive
Officer. Any termination by the Bank or by Executive shall be communicated by
Notice of Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
(b) "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that she shall not have returned to the performance of her
duties on a full-time basis during such thirty (30) day period), and (B) if her
employment is terminated for any other reason, the date specified in the Notice
of Termination.
(c) If the party receiving a Notice of Termination desires to dispute or
contest the basis or reasons for termination, the party receiving the Notice of
Termination must notify the other party within thirty (30) days after receiving
the Notice of Termination that such a dispute exists, and shall pursue the
resolution of such dispute in good faith and with reasonable diligence. During
the pendency of any such dispute, neither the Company nor the Bank shall be
obligated to pay Executive compensation or other payments beyond the Date of
Termination.
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10. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive,
and if such amounts and benefits due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.
11. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Bank or any predecessor of
the Bank and Executive, including, without limitation, that certain Change in
Control Agreement dated as of December 31, 2003 with CLB and CLFC. No provision
of this Agreement shall be interpreted to mean that Executive is subject to
receiving fewer benefits than those available to her without reference to this
Agreement.
12. NO ATTACHMENT; BINDING ON SUCCESSORS.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.
13. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
14. REQUIRED PROVISIONS.
(a) The Bank may terminate Executive's employment at any time, but any
termination by the Bank other than Termination for 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.
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(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 Section 1818(e)(3)] or 8(g)(1) [12 USC Section
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 Section 1818(e)(4)] or 8(g)(1) [12 USC Section
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
Section 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
Section 1823(c)] of the FDI Act; or (ii) by the Director or his or her designee
at the time the Director or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Director to be in an unsafe or unsound condition. Any rights of the
parties that have already vested, however, shall not be affected by such action.
(f) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the FDI Act, 12 U.S.C. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.
15. NON-COMPETITION AND POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b), (c) and (d) of this
Section 15.
(b) Executive shall, upon reasonable notice, furnish such information
and assistance to the Bank as may reasonably be required by the Bank in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party; provided, however, that Executive shall
not be required to provide information or assistance with respect to any
litigation between 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, the Company
and affiliates thereof, as it may exist from time to time, is a valuable,
special and unique asset of the business of the Bank,
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the Company and affiliates thereof. Executive will not, during or after the term
of her employment, disclose any knowledge of the past, present, planned or
considered business activities of the Bank, Company or affiliates thereof to any
person, firm, corporation, or other entity for any reason or purpose whatsoever
(except for such disclosure as may be required to be provided to the Office of
Thrift Supervision ("OTS"), the Federal Deposit Insurance Corporation ("FDIC"),
or other regulatory agency with jurisdiction over the Company, the Bank or
Executive). Notwithstanding the foregoing, Executive may disclose any knowledge
of banking, financial and/or economic principles, concepts or ideas which are
not solely and exclusively derived from the business plans and activities of the
Bank, and Executive may disclose any information regarding the Bank which is
otherwise publicly available or which Executive is otherwise legally required to
disclose. In the event of a breach or threatened breach by Executive of the
provisions of this Section 15, the Bank will be entitled to an injunction
restraining Executive from disclosing, in whole or in part, her knowledge of the
past, present, planned or considered business activities of the Bank or the
Company or any of their affiliates, or from rendering any services to any
person, firm, corporation or other entity to whom such knowledge, in whole or in
part, has been disclosed or is threatened to be disclosed. Nothing herein will
be construed as prohibiting the Bank and the Company from pursuing any other
remedies available to them for such breach or threatened breach, including the
recovery of damages from Executive.
(d) Executive agrees that Executive will not, in any manner whatsoever,
during her employment with the Company and the Bank and for a period of two (2)
years following the termination of Executive's employment, either as an
individual or as a partner, stockholder, director, officer, principal, employee,
agent, consultant, or in any other relationship or capacity, with any person,
firm, corporation or other business entity, either directly or indirectly,
solicit or induce or aid in the solicitation or inducement of any employees of
the Company or the Bank to leave their employment with the Company or the Bank.
Executive further agrees that the Executive will not, in any manner whatsoever,
during Executive's employment with the Company or the Bank and for a period of
two (2) years following the termination of Executive's employment with the
Company or the Bank, either as an individual or as a partner, stockholder,
director, officer, principal, employee, agent, consultant or in any other
relationship or capacity with any person, firm, corporation or other business
entity, either directly or indirectly, solicit the business of any customers or
clients of the Company or the Bank at the time of the termination of Executive's
employment with the Company or the Bank.
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 Illinois but
only to the extent not superseded by federal law.
19. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, conducted before
a single arbitrator selected by the Bank and Executive sitting in a location
selected by the Bank and Executive within twenty-five (25) miles of
Edwardsville, Illinois in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction.
20. PAYMENT OF LEGAL FEES.
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in Executive's favor.
21. INDEMNIFICATION.
(a) The Bank shall provide Executive (including her heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
her heirs, executors and administrators) to the fullest extent permitted under
applicable law against all expenses and liabilities reasonably incurred by her
in connection with or arising out of any action, suit or proceeding in which she
may be involved by reason of her having been a director or officer of the Bank
(whether or not she 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. Section 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.
[Signatures on next page]
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IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to
be executed by their duly authorized representatives, and Executive has signed
this Agreement, effective as of the Effective Date. The Company has become a
party to this Agreement for the sole purpose of binding itself to the duties and
obligations set forth in Sections 10 and 21 hereof.
ATTEST: FIRST CLOVER LEAF BANK
/s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------ ------------------------
Corporate Secretary President and
Chief Executive Officer
ATTEST: FIRST CLOVER LEAF FINANCIAL CORP.
/s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------ ------------------------
Corporate Secretary President and
Chief Executive Officer
WITNESS: EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxxxx /s/ Xxxxxxx XxXxxxxx
------------------------ ---------------------------
Corporate Secretary Xxxxxxx XxXxxxxx
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