Exhibit 10(5)
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into and effective this 23rd day of April, 1996,
by and between Madison First Federal Savings and Loan Association (the "Bank")
and Xxxxx X. Xxxxx (the "Employee"). The parties agree, however, that the
"Effective Date" of this Agreement shall be January 1, 1996.
WHEREAS, the Employee has heretofore been employed by the Bank as its
President and has performed valuable services for the Bank; and
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Bank and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment: The Employee is employed as the President of the Bank.
The Employee shall render such administrative and management services for the
Bank as are currently rendered and as are customarily performed by persons
situated in a similar executive capacity. The Employee shall also promote, by
entertainment or otherwise, as and to the extent permitted by law, the business
of the Bank. The Employee's other duties shall be such as the Board of Directors
(the "Board") of the Bank may from time to time reasonably direct, including
normal duties as an officer of the Bank.
2. Base Compensation: The Bank agrees to pay the Employee during the
term of this Agreement a salary at the rate of $65,000.00 per annum, payable in
cash not less frequently than monthly, and shall be effective and calculated
commencing January 1, 1996. The salary shall be reviewed annually by the Board
of Directors of Madison First Federal Savings and Loan Association in February
of each year commencing February of 1997 and any adjustment in the future on
salary shall be effective on February 1st of each year.
3. Bonuses: The Employee shall participate in any year end bonus
granted to other employees by the Board. The Employee shall further participate
in an equitable manner with all other senior management employees of the Bank in
discretionary bonuses that the Board may award from time to time to the Bank's
senior management employees. No other compensation provided for in this
Agreement shall be deemed a substitute for the Employee's right to participate
in such discretionary bonuses.
4.(a) Participation in Retirement, Medical and Other Plans: During the
term of this Agreement, the Employee shall be eligible to participate in the
following benefit plans: group hospitalization, disability, health, dental, sick
leave, retirement, pension, and/or other present or future qualified plans
provided by the Bank, generally, which benefits, taken as a whole, must be at
least as favorable as those in effect on the Effective Date, unless the
continued operation of such plans would adversely affect the Bank's operating
results or financial condition in a material way, the Bank's Board of Directors
concludes that modifications to such plans are necessary to avoid such adverse
effects and such modifications apply consistently to all employees of the Bank.
(b) Employee Benefits: Expenses: The Employee shall be eligible to
participate in any fringe benefits which are or may become available to the
Bank's senior management employees, including, for example, any stock option or
incentive compensation plans, and any other benefits which are commensurate with
the responsibilities and functions to be performed by the Employee under this
Agreement. The Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which he shall incur in connection with his services under
this Agreement, upon substantiation of such expenses in accordance with the
policies of the Bank.
5. Term: The Bank hereby employs the Employee, and the Employee hereby
accepts such employment under this Agreement, for the period commencing on
January 1, 1996 and ending thirty six months thereafter (or such earlier date as
is determined in accordance with Section 9). Additionally, on each annual
anniversary date from the Effective Date, the Employee's term of employment
shall be extended for an additional one-year period beyond the then effective
expiration date, provided the Board determines in a duly adopted resolution that
the performance of the Employee has met the Board's requirements and standards,
and that this Agreement shall be extended. Only those members of the Board of
Directors who have no personal interest in this Employment Agreement shall
discuss and vote on the approval and subsequent review of this Agreement.
6. Loyalty; Noncompetition:
(a) During the period of his employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all his full business time, attention, skill, and efforts
to the faithful performance of his duties hereunder; provided, however, from
time to time, the Employee may serve on the Boards of Directors of, and hold any
other offices or positions in, companies or organizations, which will not
present any conflict of interest with the Bank or any of its subsidiaries or
affiliates, or
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unfavorably affect the performance of Employee's duties pursuant to this
Agreement, or will not violate any applicable statute or regulation. "Full
business time" is hereby defined as that amount of time usually devoted to like
companies by similarly situated executive officers. During the term of his
employment under this Agreement, the Employee shall not engage in any business
or activity contrary to the business affairs or interests of the Bank, or be
gainfully employed in any other position or job other than as provided above.
(b) Nothing contained in this Paragraph 6 shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business dissimilar from that of the Bank, or, solely as a passive or
minority investor, in any business.
(c) While Employee is employed by the Bank and for a period of three
years after termination of Employee's employment by the Bank or by the Employee
for reasons other than those set forth in Section 9 (d) hereof, the Employee
shall not directly or indirectly, engage in any bank or bank-related business
which competes with the business of the Bank as conducted during Employee's
employment by the Bank for any financial institution, including but not limited
to banks, savings and loan associations, and credit unions within a forty mile
radius of Madison, Indiana.
7. Standards: The Employee shall perform his duties under this
Agreement in accordance with such reasonable standards as the Board may
establish from time to time. The Bank will provide Employee with the working
facilities and staff customary for similar executives and necessary for him to
perform his duties.
8. Vacation, Sick Leave and Disability:
The Employee shall be entitled to twenty days vacation annually and
shall be entitled to the same sick leave and disability leave as other employees
of the Bank.
The Employee shall not receive any additional compensation from the
Bank on account of his failure to take a vacation or sick leave, and the
Employee shall not accumulate unused vacation or sick leave from one fiscal year
to the next, except in either case to the extent authorized by the Board.
In addition to the aforesaid paid vacations, the Employee shall be
entitled, without loss of pay, to absent himself voluntarily from the
performance of his employment with the Bank for such additional periods of time
and for such valid and legitimate reasons as the Board may in its discretion
determine. Further, the Board may grant to the Employee a leave or leaves of
absence, with or without pay, at such time or times and upon such terms and
conditions as such Board in its discretion may determine.
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9. Termination and Termination Pay: Subject to Section 11 hereof,
the Employee's employment hereunder may be terminated
under the following circumstances:
(a) Death. The Employee's employment under this Agreement shall
terminate upon his death during the term of this Agreement, in which event the
Employee's estate shall be entitled to receive the compensation due the Employee
through the last day of the calendar month in which his death occurred.
(b) Disability.
(1) The Bank may terminate the Employee's employment, should the Employee
become disabled, in a manner consistent with the Bank's and the Employee's
rights and obligations under the Americans With Disabilities Act or other
applicable state and federal laws concerning disability. For the purpose of this
Agreement, "Disability" means a physical or mental condition which substantially
limits the employee's ability to perform the essential functions of his
position, as established by this Agreement, and which results in the Employee
becoming eligible for long-term disability benefits under the Bank's long-term
disability plan.
(2) During any period that the Employee shall receive disability benefits
and to the extent that the Employee shall be physically and mentally able to do
so, he shall furnish such information, assistance and documents so as to assist
in the continued ongoing business of the Bank and, if able, shall make himself
available to the Bank to undertake reasonable assignments consistent with his
prior position and his physical and mental health. The Bank shall pay all
reasonable expenses incident to the performance of any assignment given to the
Employee during the disability period.
(c) Just Cause: The Board may, by written notice to the Employee,
immediately terminate his employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause. Termination for "Just Cause" shall mean
termination because of, in the good faith determination of the Board, the
Employee'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. Notwithstanding the foregoing, in the
event of termination for Just Cause there shall be delivered to the Employee a
copy of a resolution duly adopted
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by the affirmative vote of not less than a majority of the entire membership of
the Board at a meeting of the Board called and held for that purpose (after
reasonable notice to the Employee and an opportunity for the Employee, together
with the Employee's counsel, to be heard before the Board), such meeting and the
opportunity to be heard to be held prior to, or as soon as reasonably
practicable following, termination, but in no event later than 60 days following
such termination, finding that in the good faith opinion of the Board the
Employee was guilty of conduct set forth above in the second sentence of this
Subsection (c) and specifying the particulars thereof in detail. If, following
such meeting, the Employee is reinstated, he shall be entitled to receive back
pay for the period following termination and continuing through reinstatement.
(d) Without Just Cause; Constructive Discharge:
(1) The Board may, by written notice to the Employee, immediately terminate
his employment at any time for a reason other than Just Cause, in which event
the Employee shall be entitled to receive the following compensation and
benefits (unless such termination occurs within the time period set forth in
Section 11(b) hereof, in which event the benefits and compensation provided for
in Section 11 shall apply): (i) the salary provided pursuant to Section 2
hereof, up to the date of termination of the term as provided in Section 5
hereof (including any renewal term) of this Agreement (the "Expiration Date"),
plus said salary for an additional 12-month period, and (ii) at the Employee's
election, either (A) cash in an amount equal to the cost to the Employee of
obtaining all health, life, disability and other benefits (excluding stock
options) which the Employee would have been eligible to participate in through
the Expiration Date, based upon the benefit levels substantially equal to those
that the Bank provided for the Employee at the date of termination of
employment, or (B) continued participation under such Bank benefit plans through
the Expiration Date, but only to the extent the Employee continues to qualify
for participation therein. All amounts payable to the Employee shall be paid, at
the option of the Employee, either (I) in periodic payments through the
Expiration Date, or (II) in one lump sum within ten (10) days of such
termination.
(2) The Employee may voluntarily terminate his employment under this
Agreement, and the Employee shall thereupon be entitled to receive the
compensation and benefits payable under Section 9(d)(1) hereof, within ninety
(90) days following the occurrence of any of the following events, which has not
been consented to in advance by the Employee in writing (unless such voluntary
termination occurs within the time period set forth in Section 11(b) hereof, in
which event the benefits and compensation provided for in Section 11 shall
apply): (i) the requirement that the Employee move his personal residence, or
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perform his principal executive functions, more than thirty (30) miles from his
primary office; (ii) a material reduction in the Employee's base compensation,
unless part of an institution-wide reduction; (iii) the failure by the Bank to
continue to provide the Employee with compensation and benefits provided for
under this Agreement, as the same may be increased from time to time, or with
benefits substantially similar to those provided to him under any of the
employee benefit plans in which the Employee now or hereafter becomes a
participant, or the taking of any action by the Bank which would directly or
indirectly reduce any of such benefits or deprive the Employee of any material
fringe benefit enjoyed by him, unless part of an institution-wide reduction;
(iv) the assignment to the Employee of duties and responsibilities materially
different from those normally associated with his position as referenced in
Section 1; (v) a failure to elect or re-elect the Employee to the Board of
Directors of the Bank; or (vi) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting responsibilities)
in connection with his employment with the Bank.
(3) Notwithstanding the foregoing, but only to the extent required under
federal banking law, the amount payable under clause (d)(1)(i) hereof shall be
reduced to the extent that on the date of the Employee's termination of
employment, the present value of the benefits payable under clauses (d)(1)(i)
and (ii) hereof exceeds the limitation on severance benefits that is set forth
in Regulatory Bulletin 27a of the Office of Thrift Supervision, as in effect on
the Effective Date. In the event that Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), becomes applicable to payments made under this
Section 9(d), and the payments exceed the "Maximum Amount" as defined in Section
11(a)(1) hereof, the payments shall be reduced as provided by Section 11(a)(2)
of this Agreement.
(e) Termination or Suspension Under Federal Law.
(1) If the Employee 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 vested rights of the
parties shall not be affected.
(2) 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;
however, this Paragraph shall not affect the vested rights of the parties.
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(3) All obligations under this Agreement shallent or terminate, 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. Such action shall not affect any vested rights of
the parties.
(4) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) or (g)(1) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs, the Bank's obligations
under this Agreement shall be suspended as of the date of such service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Bank may in its discretion (i) pay the Employee 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.
(f) Voluntary Termination by Employee: Subject to Section 11 hereof,
the Employee may voluntarily terminate employment with the Bank during the term
of this Agreement, upon at least ninety (90) days' prior written notice to the
Board of Directors, in which case the Employee shall receive only his
compensation, vested rights and employee benefits up to the date of his
termination (unless such termination occurs pursuant to Section 9(d)(2) hereof,
in which event the benefits and compensation provided for in section 9(d) shall
apply).
10. No Mitigation: The Employee shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.
11. Change in Control:
(a) Change in Control; Involuntary Termination:
(1) Notwithstanding any provision herein to the contrary, if the Employee's
employment under this Agreement is terminated by the Bank, without the
Employee's prior written consent and for a reason other than Just Cause, in
connection with or within twelve (12) months after any Change in Control of the
Bank, the Employee shall, subject to paragraph (2) of this Section 11(a), be
paid an amount equal to the difference between
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(i) the product of 2.99 times his "base amount" as defined in Section 280G(b)(3)
of the Code and regulations promulgated thereunder (the "Maximum Amount"), and
(ii) the sum of any other parachute payments (as defined under Section
280G(b)(2) of the Code) that the Employee receives on account of the Change in
Control. Said sum shall be paid in one lump sum within ten (10) days of such
termination. This paragraph would not apply to a termination of employment due
to death, disability or voluntary termination by the Employee.
(2) In the event that the Employee and the Bank jointly determine and agree
that the total parachute payments receivable under clauses (i) and (ii) of
Section 11(a)(1) hereof exceed the Maximum Amount, notwithstanding the payment
procedure set forth in Section 11(a)(1) hereof, the Employee shall determine
which and how much, if any, of the parachute payments to which he is entitled
shall be eliminated or reduced so that the total parachute payments to be
received by the Employee do not exceed the Maximum Amount. If the Employee does
not make his determination within ten business days after receiving a written
request from the Bank, the Bank may make such determination, and shall notify
the Employee promptly thereof. Within five business days of the earlier of the
Bank's receipt of the Employee's determination pursuant to this paragraph or the
Bank's determination in lieu of a determination by the Employee, the Bank shall
pay to or distribute to or for the benefit of the Employee such amounts as are
then due the Employee under this Agreement.
(3) As a result of uncertainty in application of Section 280G of the Code
at the time of payment hereunder, it is possible that such payments will have
been made by the Bank which should not have been made ("Overpayment") or that
additional payments will not have been made by the Bank which should have been
made ("Underpayment"), in each case, consistent with the calculations required
to be made under Section 11(a)(1) hereof. In the event that the Employee, based
upon the assertion by the Internal Revenue Service against the Employee of a
deficiency which the Employee believes has a high probability of success,
determines that an Overpayment has been made, any such Overpayment paid or
distributed by the Bank to or for the benefit of Employee shall be treated for
all purposes as a loan ab initio which the Employee shall repay to the Bank
together with interest at the applicable federal rate provided for in Section
7872(f)(2)(B) of the Code; provided, however, that no such loan shall be deemed
to have been made and no amount shall be payable by the Employee to the Bank if
and to the extent such deemed loan and payment would not either reduce the
amount on which the Employee is subject to tax under Section 1 and Section 4999
of the Code or generate a refund of such taxes. In the event that the Employee
and the Bank determine, based upon controlling precedent or other substantial
authority, that an Underpayment
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has occurred, any such Underpayment shall be promptly paid by the Bank to or for
the benefit of the Employee together with interest at the applicable federal
rate provided for in Section 7872(f)(2)(B) of the Code.
(4) The term "Change in Control" shall mean any one of the following
events:
If the Bank is in the "mutual" form of organization, a "Change of
Control" shall be deemed to have occurred if:
(i) as a result of, or in connection with, any exchange offer, merger or
other business combination, sale of assets or contested election, any
combination of the foregoing transactions, or any similar transaction, the
persons who were non-employee directors of the Bank before such transaction
cease to constitute a majority of the Board of Directors of the Bank or any
successor to the Bank;
(ii) the Bank transfers substantially all of its assets to another
corporation which is not a wholly owned subsidiary of the Bank;
(iii) The Bank sells substantially all of the assets of a subsidiary or
affiliate which, at the time of such sale, is the principal employer of the
Employee; or
(iv) the Bank is merged or consolidated with another corporation and, as a
result of the merger or consolidation, less than fifty one percent (51%) of the
outstanding proxies relating to the surviving or resulting corporation are
given, in the aggregate, by the former members of the Bank.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
occur solely by reason of a transaction in which the Bank converts to the stock
form of organization.
If the Bank is in the "stock" form of organization, a "Change or Control"
shall be deemed to have occurred if:
(i) as a result of, or in connection with, any initial public offering,
tender offer or exchange offer, merger or other business combination, sale of
assets or contested election, any combination of the foregoing transactions, or
any similar transaction, the persons who were non-employee directors of the Bank
or a holding company controlling the Bank before such transaction cease to
constitute a majority of the Board of Directors of the Bank or such holding
company or any successor thereof;
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(ii) the Bank or a holding company controlling the Bank transfers
substantially all of its assets to another corporation which is not a wholly
owned subsidiary of the Bank or such holding company;
(iii) the Bank or a holding company controlling the Bank sells
substantially all of the assets of a subsidiary or affiliate which, at the time
of such sale, is the principal employer of the Employee; or
(iv) the Bank or a holding company controlling the Bank is merged or
consolidated with another corporation and, as a result of the merger or
consolidation, less than fifty one percent (51%) of the outstanding voting
securities of the surviving or resulting corporation is owned in the aggregate
by the former stockholders of the Bank or of such holding company controlling
the Bank.
Notwithstanding the foregoing, but only to the extent required under
federal banking law, the amount payable under Subsection(a) of this Section 11
shall be reduced to the extent that on the date of the Employee's termination of
employment, the amount payable under Subsection(a) of this Section 11 exceeds
the limitation on severance benefits that is set forth in Regulatory Bulletin
27a of the Office of Thrift Supervision, as in effect on the Effective Date.
(b) Change in Control; Voluntary Termination: Notwithstanding any other
provision of this Agreement to the contrary, but subject to Section 11(a)(2)
hereof, the Employee may voluntarily terminate his employment under this
Agreement within twelve (12) months following a Change in Control of the Bank,
as defined in paragraph (a)(4) of this Section 11, and the Employee shall
thereupon be entitled to receive the payment described in Section 11(a)(1) of
this Agreement, within ninety (90) days following the occurrence of any of the
following events, which has not been consented to in advance by the Employee in
writing; (i) the requirement that the Employee perform his principal executive
functions more than thirty (30) miles from his primary office as of the date of
the Change in Control; (ii) a material reduction in the Employee's base
compensation as in effect on the date of the Change in Control or as the same
may be changed by mutual agreement from time to time, unless part of an
institution-wide reduction; (iii) the failure by the Bank to continue to provide
the Employee with compensation and benefits provided for under this Agreement,
as the same may be increased from time to time, or with benefits substantially
similar to those provided to him under any employee benefit in
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which the Employee is a participant at the time of the Change in Control, or the
taking of any action which would materially reduce any of such benefits or
deprive the Employee of any material fringe benefit enjoyed by him at the time
of the Change in Control, unless part of an institution-wide reduction; (iv) the
assignment to the Employee of duties and responsibilities materially different
from those normally associated with his position as referenced at Section 1; (v)
a failure to elect or re-elect the Employee to the Board of Directors of the
Bank, if the Employee is serving on the Board on the date of the Change in
Control; or (vi) a material diminution or reduction in the Employee's
responsibilities or authority (including reporting responsibilities) in
connection with his employment with the Bank.
(c) Compliance with 12 U.S.C. Section 1828(k): Any payments made to the
Employee pursuant to this Agreement, or otherwise, are subject to and
conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any
regulations promulgated thereunder.
(d) Trust: (1) Within five business days before or after a Change in
Control as defined in Section 11(a) of this Agreement which was not approved in
advance by a resolution of a majority of the Continuing Directors of the Bank,
the Bank shall (i) deposit, or cause to be deposited, in a grantor trust (the
"Trust"), designed to conform with Revenue Procedure 93-64 (or any successor)
and having a trustee independent of the Bank, an amount equal to 2.99 times the
Employee's "base amount" as defined in Section 280G(b)(3) of the Code, and (ii)
provide the trustee of the Trust with a written direction to hold said amount
and any investment return thereon in a segregated account for the benefit of the
Employee, and to follow the procedures set forth in the next paragraph as to the
payment of such amounts from the Trust.
(2) During the twelve (12) consecutive month period following the date on
which the Bank makes the deposit referred to in the preceding paragraph, the
Employee may provide the trustee of the Trust with a written notice requesting
that the trustee pay to the Employee an amount designated in the notice as being
payable pursuant to Section 11(a) or (b). Within three business days after
receiving said notice, the trustee of the Trust shall send a copy of the notice
to the Bank via overnight and registered mail, return receipt requested. On the
tenth (10th) business day after mailing said notice to the association, the
trustee of the Trust shall pay the Employee the amount designated therein in
immediately available funds, unless prior thereto the Bank provides the trustee
with a written notice directing the trustee to withhold such payment. In the
latter event, the trustee shall submit the dispute to non-appealable binding
arbitration for a determination of the amount payable to
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the Employee pursuant to Section 11(a) or (b) hereof, and the party responsible
for the payment of the costs of such arbitration (which may include any
reasonable legal fees and expenses incurred by the Employee) shall be determined
by the arbitrator. The trustee shall choose the arbitrator to settle the
dispute, and such arbitrator shall be bound by the rules of the American
Arbitration Association in making his or her determination. The parties and the
trustee shall be bound by the results of the arbitration and, within 3 days of
the determination by the arbitrator, the trustee shall pay from the Trust the
amounts required to be paid to the Employee and/or the Bank, and in no event
shall the trustee be liable to either party for making the payments as
determined by the arbitrator.
(3) Upon the earlier of (i) any payment from the Trust to the Employee, or
(ii) the date twelve (12) months after the date on which the Bank makes the
deposit referred to in the first paragraph of this subsection (d)(1), the
trustee of the Trust shall pay to the Bank the entire balance remaining in the
segregated account maintained for the benefit of the Employee. The Employee
shall thereafter have no further interest in the Trust pursuant to this
Agreement.
(e) In the event that any dispute arises between the Employee and the
Bank as to the terms or interpretation of this Agreement, including this Section
11, whether instituted by formal legal proceedings or otherwise, including any
action that the Employee takes to enforce the terms of this Section 11 or to
defend against any action taken by the Bank, the Employee shall be reimbursed
for all costs and expenses, including reasonable attorneys' fees, arising from
such dispute, proceedings or actions, provided that the Employee shall obtain a
final judgment by a court of competent jurisdiction in favor of the Employee.
Such reimbursement shall be paid within ten (10) days of Employee's furnishing
to the Bank written evidence, which may be in the form, among other things, of a
canceled check or receipt, of any costs or expenses incurred by the Employee.
Should the Employee fail to obtain a final judgment in favor of the
Employee and a final judgment is entered in favor of the Bank, then the Bank
shall be reimbursed for all costs and expenses, including reasonable Attorneys'
fees arising from such dispute, proceedings or actions. Such reimbursement shall
be paid within ten (10) days of the Bank furnishing to the Employee written
evidence, which may be in the form, among other things, of a canceled check or
receipt, of any costs or expenses incurred by the Bank.
12. Employer will permit Employee or his personal representative(s) or heirs,
during a period of three months following Employee's termination of employment
by Employer for the reasons set forth in Subsections 9(d) or 11(a), if such
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termination follows a Change of Control, to require Employer, upon written
request, to purchase all outstanding stock options previously granted to
Employee under any stock option plan then in effect to the extent the options
are vested at a cash purchase price equal to the amount by which the aggregate
"fair market value" of the shares subject to such options exceeds the aggregate
option price for such shares. For purposes of this Agreement, the term "fair
market value" shall mean the higher of (1) the average of the highest asked
prices for shares in the over-the-counter market as reported on the NASDAQ
system or other exchange if the shares are traded on such system for the 30
business days preceding such termination, or (2) the average per share price
actually paid for the most highly priced 1% of the shares acquired in connection
with the Change of Control by any person or group acquiring such control.
13. Federal Income Tax Withholding: The Bank may withhold all federal and
state income or other taxes from any benefit payable under this Agreement as
shall be required pursuant to any law or government regulation or ruling.
14. Successors and Assigns:
(a) Bank. This Agreement shall not be assignable by the Bank, provided
that 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.
(b) Employee. Since the Bank is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Bank; provided, however, that nothing in this paragraph shall
preclude (i) the Employee from designating a beneficiary to receive any benefit
payable hereunder upon his death, or (ii) the executors, administrators, or
other legal representatives of the Employee or his estate from assigning any
rights hereunder to the person or persons entitled thereunto.
(c) Attachment. 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 exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
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15. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
16. Applicable Law. Except to the extent preempted by federal law, the laws
of the State of Indiana shall govern this Agreement in all respects, whether as
to its validity, construction, capacity, performance or otherwise.
17. 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.
18. 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.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
ATTEST: MADISON FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION
/s/ Xxxxxx X. Xxxxxxx By:/s/ Xxxx X. Xxxxxxx
--------------------- --------------------------
Secretary Chairman of the Board
WITNESS:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxx
---------------------- --------------------------
Xxxxx X. Xxxxx
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