Exhibit 10.6
CITIZENS FIRST SAVINGS BANK
FORM OF
CHANGE IN CONTROL AGREEMENT
This AGREEMENT is made effective as of ____________________, ___, 2001, by
and among Citizens First Savings Bank (the "Bank"), a state chartered savings
institution, with its principal administrative offices at 525 Water Street, Port
Huron, Michigan 48060, _____________________ ("Executive"), and Citizens First
Bancorp, Inc. (the "Holding Company"), a corporation organized under the laws of
the State of Delaware, which is the stock holding company of the Bank.
WHEREAS, the Bank recognizes the substantial contribution Executive has
made to the Bank and wishes to protect Executive's position with the Bank for
the period provided in this Agreement; and
WHEREAS, Executive has agreed to serve in the employ of the Bank.
NOW, THEREFORE, in consideration of the contribution and responsibilities
of Executive, and upon the other terms and conditions hereinafter provided, the
parties hereto agree as follows:
1. TERM OF AGREEMENT.
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The period of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue for a period of ________ (___) full
calendar months thereafter. Commencing on the first anniversary date of this
Agreement, and continuing on each anniversary thereafter, the Board of Directors
(the "Board") may act to extend the term of this Agreement for an additional
year, such that the remaining term of this Agreement would be __________ years,
unless Executive elects not to extend the term of this Agreement by giving
written notice to the Bank, in which case the term of this Agreement will expire
on the ________ anniversary of this Agreement.
2. CHANGE IN CONTROL.
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(a) Upon the occurrence of a Change in Control of the Bank or the Holding
Company (as herein defined) followed at any time during the term of this
Agreement by the termination of Executive's employment in accordance with the
terms of this Agreement, other than Termination for Cause, as defined in Section
2(c) of this Agreement, the provisions of Section 3 of this Agreement shall
apply. Upon the occurrence of a Change in Control, Executive shall have the
right to elect to voluntarily terminate [his/her] employment at any time during
the term of this Agreement following any demotion, loss of title, office or
significant authority, material reduction in [his/her] annual compensation or
benefits, or relocation of [his/her] principal place of employment by more than
__ (__) miles from its location immediately prior to the Change in Control;
provided, however, Executive may consent in writing to any such demotion, loss,
reduction or relocation. The effect of any written consent of Executive under
this Section 2 (a) shall be strictly limited to the terms specified in such
written consent.
(b) For purposes of this Agreement, a "Change in Control" of the Bank or
Holding Company shall mean an event of a nature that: (i) would be required to
be reported in response to Item 1(a) 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 1934 (the "Exchange Act"); or (ii) results in a Change in
Control of the Bank or the Holding Company within the meaning of the Bank Change
in Control Act and the Rules and Regulations promulgated by the Federal Deposit
Insurance Corporation ("FDIC") at 12 C.F.R. (S) 303.4(a) with respect to the
Bank and the Rules and Regulations promulgated by the Office of Thrift
Supervision ("OTS") (or its predecessor agency), with respect to the Holding
Company, as in effect on the date hereof; or (iii) 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 Bank or the Holding
Company representing ____% or more of the Bank's or the Holding Company's
outstanding securities except for any securities of the Bank purchased by the
Holding Company in connection with the conversion of the Bank to the stock form
and any securities purchased by any tax-qualified employee benefit plan of the
Bank; or (B) individuals who constitute the Board of Directors 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 ___ (_/_) of the
directors comprising the Incumbent Board, or whose nomination for election by
the Holding Company's stockholders was approved by the same Nominating Committee
serving under an Incumbent Board, shall be, for purposes of this clause (B),
considered as 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 Holding Company or similar transaction occurs in which the Bank or
Holding Company is not the resulting entity; or (D) solicitations of
shareholders of the Holding Company, by someone other than the current
management of the Holding Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Holding Company or Bank or
similar transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the plan or
transaction are exchanged for or converted into cash or property or securities
not issued by the Bank or the Holding Company shall be distributed; or (E) a
tender offer is made for __% or more of the voting securities of the Bank or the
Holding Company.
(c) Executive shall not have the right to receive termination benefits
pursuant to Section 3 of this Agreement upon Termination for Cause. The term
"Termination for Cause" shall mean termination because of: 1) Executive's
personal dishonesty, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule, regulation (other than traffic violations or similar
offenses), final cease and desist order or material breach of any provision of
this Agreement which results in a material loss to the Bank or the Holding
Company, or 2) Executive's conviction of a crime or act involving moral
turpitude or a final judgement rendered against Executive based upon actions of
Executive which involve moral turpitude. For the purposes of this Section, no
act, or the failure to act, on Executive's part shall be "willful" unless done,
or omitted to be done, not in good faith and without reasonable belief that the
action or omission was in the best interests of the Bank or its affiliates.
Notwithstanding the
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foregoing, Executive shall not be deemed to have been Terminated for Cause
unless and until there shall have been delivered to her a Notice of Termination
which shall include a copy of a resolution duly adopted by the affirmative vote
of not less than a majority of the members of the Board at a meeting of the
Board called and held for that purpose (after reasonable notice to Executive and
an opportunity for him, together with counsel, to be heard before the Board),
finding that in the good faith opinion of the Board, Executive was guilty of
conduct justifying Termination for 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 Cause. During the period beginning
on the date of the Notice of Termination for Cause pursuant to Section 4 of this
Agreement through the Date of Termination, stock options granted to Executive
under any stock option plan shall not be exercisable nor shall any unvested
stock awards granted to Executive under any stock-based incentive plan of the
Bank, the Holding Company or any subsidiary or affiliate thereof vest. At the
Date of Termination, such stock options and such unvested stock awards shall
become null and void and shall not be exercisable by or delivered to Executive
at any time subsequent to such Date of Termination for Cause.
3. TERMINATION BENEFITS.
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(a) Upon the occurrence of a Change in Control, followed at any time
during the term of this Agreement by the involuntary termination of Executive's
employment (other than for Termination for Cause), or voluntary termination
during the term of this Agreement following any demotion, loss of title, office
or significant authority, material reduction in [his/her] annual compensation or
benefits, or relocation of [his/her] principal place of employment by more than
_________ (__) miles from its location immediately prior to the Change in
Control (unless Executive so consents), the Bank shall be obligated to pay
Executive, or in the event of [his/her] subsequent death, [his/her] beneficiary
or beneficiaries, or [his/her] estate, as the case may be, a sum equal to
_________ (__) times Executive's average annual compensation for the ______
most recent taxable years that Executive has been employed by the Bank or such
lesser number of years in the event that Executive shall have been employed by
the Bank for less than ____ years. For this purpose, such annual compensation
shall include base salary and any other taxable income, including but not
limited to amounts related to the granting, vesting or exercise of restricted
stock or stock option awards, commissions, bonuses, pension and profit sharing
plan contributions or benefits (whether or not taxable), severance payments,
retirement benefits, and fringe benefits paid or to be paid to Executive or paid
for Executive's benefit during any such year. At the election of Executive
which election is to be made prior to a Change in Control, such payment shall be
made in a lump sum or on an annual basis in approximately equal installments
over a ____ (__) year period.
(b) Upon the occurrence of a Change in Control of the Bank or the Holding
Company followed at any time during the term of this Agreement by Executive's
voluntary or involuntary termination of employment in accordance with paragraph
(a) of this Section 3, other than for Termination for Cause, the Bank shall
cause to be continued life, medical and disability coverage substantially
identical to the coverage maintained by the Bank or the Holding Company for
Executive prior to [his/her] severance, except to the extent such coverage may
be changed in its
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application to all Bank or Holding Company employees on a nondiscriminatory
basis. Such coverage and payments shall cease upon the expiration of __________
(__) full calendar months from the Date of Termination.
(c) Notwithstanding the provisions of this Section 3, in no event shall
the aggregate payments or benefits to be made or afforded to Executive under
said paragraphs (the "Termination Benefits") constitute an "excess parachute
payment" under Section 280G of the Internal Revenue Code of 1986, as amended, or
any successor thereto, and in order to avoid such a result, Termination Benefits
will be reduced, if necessary, to an amount (the "Non-Triggering 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 said Section
280G. The allocation of the reduction required hereby among the Termination
Benefits shall be determined by Executive.
4. NOTICE OF TERMINATION.
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(a) Any purported termination by the Bank or by Executive in connection
with a Change in Control shall be communicated by a Notice of Termination to the
other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which indicates 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 the date specified in the Notice of
Termination (which, in the instance of Termination for Cause, shall not be less
than _______ (___) days from the date such Notice of Termination is given);
provided, however, that if a dispute regarding the Executive's termination
exists, the "Date of Termination" shall be determined in accordance with Section
4(c) of this Agreement.
(c) If, within _____ (_) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected) and
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute in connection with a Change in
Control, in the event that the Executive is terminated for reasons other than
Termination for Cause, the Bank will continue to pay Executive the payments and
benefits due under this Agreement in effect when the notice giving rise to the
dispute was given (including, but not limited to [his/her] annual salary) until
the earlier of: (1) the resolution of the dispute in accordance with this
Agreement; or (2) the expiration of the remaining term of this Agreement as
determined as of the Date of Termination.
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5. SOURCE OF PAYMENTS.
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It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the Bank.
Further, the Holding Company guarantees such payments 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 Holding Company.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.
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This Agreement contains the entire understanding between the parties hereto
and supersedes any prior agreement between the Bank and Executive, except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to [him/her] without reference to this
Agreement.
Nothing in this Agreement shall confer upon Executive the right to continue
in the employ of the Bank or shall impose on the Bank any obligation to employ
or retain Executive in its employ for any period.
7. NO ATTACHMENT.
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(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 affect 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, the Bank and their respective successors and assigns.
8. MODIFICATION AND WAIVER.
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(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 or as to any act other than that
specifically waived.
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9. REQUIRED REGULATORY PROVISIONS.
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Any payments made to Executive pursuant to this Agreement, or otherwise,
are subject to and conditioned upon compliance with 12 U.S.C. (S)1828(k) and any
rules and regulations promulgated thereunder, including 12 C.F.R. Part 359.
10. SEVERABILITY.
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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.
11. HEADINGS FOR REFERENCE ONLY.
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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.
12. GOVERNING LAW.
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The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Michigan.
13. ARBITRATION.
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Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by Executive within ___ (__)
miles from the location of the Bank's main office, 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; provided, however,
that Executive shall be entitled to seek specific performance of [his/her] right
to be paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
14. PAYMENT OF COSTS AND LEGAL FEES.
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All reasonable costs and 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 if Executive is successful with respect to such
dispute or question of interpretation pursuant to a legal judgment, arbitration
or settlement.
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15. INDEMNIFICATION.
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The Bank shall provide Executive (including [his/her] heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense and shall indemnify Executive (and
[his/her] heirs, executors and administrators) to the fullest extent permitted
under Michigan law against all expenses and liabilities reasonably incurred by
[him/her] in connection with or arising out of any action, suit or proceeding in
which [he/she] may be involved by reason of having been a director or officer
of the Bank (whether or not [he/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 to be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
16. SUCCESSOR TO THE BANK.
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The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank, to expressly and
unconditionally assume and agree to perform the Bank's obligations under this
Agreement in the same manner and to the same extent that the Bank would be
required to perform such obligations if no such succession or assignment had
taken place.
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SIGNATURES
IN WITNESS WHEREOF, Citizens First Savings Bank and Citizens First Bancorp,
Inc. have caused this Agreement to be executed by their duly authorized
officers, and Executive has signed this Agreement, on the ______ day of
____________, 2001.
ATTEST: CITIZENS FIRST SAVINGS BANK
______________________________ By: _________________________________
SEAL
ATTEST: CITIZENS FIRST BANCORP, INC.
(Guarantor)
______________________________ By: _________________________________
SEAL
WITNESS: EXECUTIVE
______________________________ _________________________________
[Executive]
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