January 25, 1999
Mr. Lawrence T. Loeser
960 Coventry Drive
Lake Forest, IL 60045
Dear Larry:
We are extremely pleased and excited about your joining
Harrington's senior management team to lead the development and
ongoing management of the North Carolina Bank. In this letter, I
have provided the terms of our offer to you as we have discussed
over the last week.
Position: President of Harrington Bank of North Carolina reporting
to the Chief Executive Officer of Harrington Bank. Also, upon your
election by the Board of Directors of Harrington Bank, you will
become a director of Harrington Bank. This election will take
place at the first board meeting held after your start date of
employment.
Base Compensation: $150,000 per annum. This salary will be paid
over 26 bi-weekly pay periods from the start of employment.
Stock Options: 5,000 Options on HFGI Stock struck at $10 per
share. These options will have a 10 year term and will vest at a
rate of 20% per year from the date of grant, expected on
Harrington Financial Group, Inc.'s first Board or Executive
Committee Meeting held after your start date of employment. We
will embody these terms in a stock option agreement between us.
Bonus: A guaranteed first year bonus of $50,000, paid after 12
months of employment with the Bank. A partial amount of this bonus
may be paid at the Bank's discretion on an earlier date in
accordance with the Bank's regular annual compensation reviews for
senior management, normally conducted in month of December.
Mr. Lawrence T. Loeser
Page 2
January 25, 1999
Employment Understanding: In the event that Harrington terminates your
employment for reasons other than your willful misconduct or gross negligence
(or in the event you are reassigned to a position of lesser responsibility and
you decide to terminate your employment) within the first eighteen months of
your employment, Harrington Bank agrees to continue to pay your base salary (at
a rate of $411.33 per calendar day) until eighteen months have passed from your
initial date of employment with Harrington.
Any tax due by you on income related to this compensation will be borne by you.
This Employment Understanding agreement will expire eighteen months after the
date on which your employment with Harrington begins.
Benefits: Standard Harrington Bank Employee benefits available to a senior
manager (Vice President or above).
House Hunting: Harrington Bank will pay the reasonable expenses for a maximum of
three trips to North Carolina for house hunting purposes, with one of those
trips including all family members. Any tax due by you on income related to
these trips will be borne by you.
Interim Living Expenses: Harrington Bank will pay for interim lodging, meal, and
reasonable commuting expenses acceptable to the Bank from the start date of your
employment until your children's last day of school for the 1999 school year or
June 30, 1999, whichever is earlier. The tax due by you on any income related to
interim living will be borne by you.
Moving Expenses: Harrington Bank will pay for reasonable expenses to move your
household possessions and travel to North Carolina not to exceed $15,000 in
total. Any personal income tax related to reimbursement for this move will be
borne by you.
Commission on the Sale of Your Home in Illinois: Harrington will reimburse you
for the commission cost on the sale of your home not to exceed 5.25% of the
sales price, as evidenced by a broker statement and this commission will be
grossed up by your actual total tax rate not to exceed 35%. If you terminate
your employment with Harrington Bank within 18 months from your start date, you
will be responsible for reimbursing Harrington Bank for a portion of this
commission plus the gross-up amount for taxes. The amount owed Harrington Bank
will be calculated by taking the total amount of the commission plus gross-up
divided by 547 days. The resulting amount will be multiplied by the difference
between 547 and the number of calendar days from start of employment to
resignation.
Mr. Lawrence T. Loeser
Page 3
January 25, 1999
Country Club Dues: Harrington Bank will pay up to $200 per month for regular
dues for a country club or social club membership, while you are a senior
management employee of Harrington.
In order to reimburse these expenses, we will require documentation of the
charges including invoices and receipts.
I trust that this letter includes all the terms of the offer as we have
discussed and agreed. If so, please sign in the space provided below so that we
may have this record for your employee file. I look forward to your start date
anticipated in late February 1999 or early March 1999 and to working with you in
accomplishing the Bank's strategic goals.
Sincerely,
/s/ Craig J. Cerny
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Craig J. Cerny
CJC/dld
cc: HB/HFG Compensation Committee
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Harrington Bank is not bound by any contractual agreement, expressed or implied,
by enforcing the provisions of this document. Harrington Bank is an at will
employer.
I accept the terms and conditions stated herein regarding my employment with
Harrington Bank.
/s/ Lawrence T. Loeser 1/25/99
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Lawrence T. Loeser Date