EXHIBIT 10.7
MID-CONTINENT FEDERAL SAVINGS BANK
DIRECTORS CHANGE IN CONTROL SEVERANCE PLAN
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall, for the purpose
of the Plan and any subsequent amendment thereof, have the following meanings
unless a different meaning is plainly required by the content:
1.1 "Board" means the Board of Directors of the Savings Bank, as
constituted from time to time, and successors thereto.
1.2 "Change in Control" shall mean: (i) a change in the power to
control proxies by any person, other than the Board of Directors of the Savings
Bank, to direct more than 25% of the outstanding votes of the Savings Bank; (ii)
a change in the control of the election of a majority of the Savings Bank's
directors; or (iii) a change in the exercise of a controlling influence over the
management or policies of the Savings Bank by any person or by persons acting as
a group within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended, (the "Exchange Act"). Change in Control shall also mean: (i)
the execution of an agreement for the sale of all, or a material portion, of the
assets of the Savings Bank; (ii) the execution of an agreement for a merger or
recapitalization of the Savings Bank or any merger or recapitalization whereby
the Savings Bank is not the surviving entity; (iii) a change in control of the
Savings Bank, as otherwise defined or determined by the Office of Thrift
Supervision ("OTS") or regulations promulgated by it; or (iv) the acquisition,
directly or indirectly, of the beneficial ownership (within the meaning of that
term as it is used in Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding voting securities of the Savings Bank by any person, trust, entity
or group. The term "person" refers to an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a change
in control has occurred shall be conclusive and binding.
1.3 "Committee" means the Board or the administrative committee as
appointed by the Board pursuant to Section 6.11 herein.
1.4 "Director" means a member of the Board of Directors of the Savings
Bank as of the Effective Date.
1.5 "Effective Date" means June 26, 1997.
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1.6 "Participant" means a Director serving as a member of the Board on
or after the Effective Date. A Director's participation in the Plan shall
continue as long as he or she continues to serve as a Director subject to the
right of termination, amendment, and modification of the Plan set forth herein.
1.7 "Plan" means the Mid-Continent Federal Savings Bank Directors
Change in Control Severance Plan as set forth herein, and as may be amended from
time to time by the Board.
1.8 "Savings Bank" means Mid-Continent Federal Savings Bank, or any
successor thereto.
1.9 "Service" means all years of service as a Director of the Savings
Bank and all predecessor (or successor) entities of the Savings Bank. Years of
service as a Director need not be continuous.
1.10 "Severance Benefit Amount" means the benefit payable under the
Plan in accordance Section 2.4 herein.
1.11 "Termination Event" means the termination of service as a Director
following the date of a Change in Control of the Savings Bank or within one year
thereafter.
ARTICLE II
BENEFITS
2.1 Severance Benefits. Upon the occurrence of a Termination Event, the
Savings Bank shall pay monthly to the Participant the Severance Benefit Amount,
as described and in the amount set forth at Article II, Section 2.2. Payment of
such Severance Benefit Amount shall begin on the first business day of the month
following such Termination Event. The payments will continue to be paid monthly
until all scheduled payments are made to the Participant. Except as provided at
Article II, Section 2.2 upon a Participant's termination from service as a
Director of the Savings Bank prior to a Termination Event, the Savings Bank
shall have no financial obligations to the Participant under the Plan.
2.2 Severance Benefit Amount. The Severance Benefit Amount shall
be calculated and payable as follows:
a. A Severance Benefit Amount shall be paid for a period of
months based upon service of the Participant prior to the Termination
Event as follows:
Years of Service Maximum Number of Monthly Payments
---------------- ----------------------------------
less than 1 year 0
1 or more 18
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b. The Severance Benefit Amount shall be calculated as the
aggregate annual Board retainer and regular monthly Board fees in
effect with respect to such Director at the Termination Event, which
would normally be paid during the next twelve month period to such
Participant as a Director.
c. Benefits payable in accordance with the Plan are exclusive
of any other benefits that may be payable to a participant under any other plan
of the Bank, including but not limited to the Bank's Directors Retirement Plan.
2.3 Death of Participant. Upon the death of a Participant who is
receiving benefit payments under the Plan prior to his or her death, the
remaining monthly payments will cease immediately and all obligations of the
Savings Bank under the Plan shall cease to exist with respect to such
Participant.
2.4 Alternative Forms Of Benefit Payment. The Committee may at any time
distribute the Severance Benefit Amount with respect to all future benefits
payable pursuant to Article II of the Plan, in a lump sum payment equal to the
present value of all future benefits payable to such Participant. The interest
rate in effect for a one-year U.S. Treasury Bill on the date of the lump sum
payment shall be used for purposes of calculating the present value of amounts
payable in accordance with Section 2.4.
ARTICLE III
TRUST/NON-FUNDED STATUS OF PLAN
3.1 Trust/Non-Funded Status of Plan. Except as may be specifically
provided, nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Savings Bank and the Participant
or any other person. Any funds which may be invested under the provisions of
this Plan shall continue for all purposes to be a part of the general funds of
the Savings Bank. No person other than the Savings Bank shall by virtue of the
provisions of this Plan have any interest in such funds. The Savings Bank shall
not be under any obligation to use such funds solely to provide benefits
hereunder, and no representations have been made to any Participant that such
funds can or will be used only to provide benefits hereunder. To the extent that
any person acquires a right to receive payments from the Savings Bank under the
Plan, such rights shall be no greater than the right of any unsecured general
creditor of the Savings Bank.
ARTICLE IV
VESTING
4.1 Vesting. All benefits under this Plan are deemed non-vested and
forfeitable prior to a Termination Event. All benefits payable hereunder shall
be deemed 100% vested and non- forfeitable by the Participant upon his or her
meeting the requirements set forth at Article II upon a Termination Event. No
benefits shall be deemed payable hereunder for any period prior
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to the time that such benefits shall be deemed 100% vested and non-forfeitable.
ARTICLE V
TERMINATION
5.1 Termination. All the rights of a Participant shall terminate
immediately upon the Participant ceasing to be in the active service of the
Savings Bank prior to a Termination Event. A leave of absence approved by the
Board shall not constitute a cessation of service within the meaning of this
Section 5.1.
ARTICLE VI
GENERAL PROVISIONS
6.1 Other Benefits. Nothing in this Plan shall diminish or impair a
Participant's eligibility, participation or benefit entitlement under any other
benefit, insurance or compensation plan or agreement of the Savings Bank now or
hereinafter in effect.
6.2 No Effect on Employment or Service. This Plan shall not be deemed
to give any Participant or other person in the employ or service of the Savings
Bank any right to be retained in the employment or service of the Savings Bank,
or to interfere with the right of the Savings Bank to terminate any Participant
or such other person at any time and to treat him or her without regard to the
effect which such treatment might have upon him or her as a Participant in this
Plan.
6.3 Legally Binding. The rights, privileges, benefits and obligations
under this Plan are intended to be legal obligations of the Savings Bank and
binding upon the Savings Bank, its successors and assigns.
6.4 Modification. The Savings Bank, by action of the Board of
Directors, reserves the exclusive right to amend, modify, or terminate this
Plan. Any such termination, modification or amendment shall not terminate or
diminish any rights or benefits accrued by any Participant prior thereto without
regard to whether such rights or benefits shall be deemed vested as of such
date. The Savings Bank shall give thirty (30) days notice in writing to any
Participant prior to the effective date of any amendment, modification or
termination of this Plan.
6.5 Arbitration. Any controversy or claim arising out of or relating to
the Plan or the breach thereof shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
with such arbitration hearing to be held at the offices of the American
Arbitration Association ("AAA") nearest to the home office of the Savings Bank,
unless otherwise mutually agreed to by the Participant and the Savings Bank, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
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6.6 Limitation. No rights of any Participant are assignable by any
Participant, in whole or in part, either by voluntary or involuntary act or by
operation of law. The rights of a Participant hereunder are not subject to
anticipation, alienation, sale, transfer, assignment, pledge, hypothecation,
encumbrance or garnishment by creditors of the Participant. Further, a
Participant's rights under the Plan are not subject to the debts, contracts,
liabilities, engagements, or torts of any Participant. No Participant shall have
any right under this Plan or right against any assets held or acquired pursuant
thereto other than the rights of a general, unsecured creditor of the Savings
Bank pursuant to the unsecured promise of the Savings Bank to pay the benefits
accrued hereunder in accordance with the terms of this Plan. The Savings Bank
has no obligation under this Plan to fund or otherwise secure its obligations to
render payments hereunder to a Participant. No Participant shall have any
discretion in the use, disposition, or investment of any asset acquired or set
aside by the Savings Bank to provide benefits under this Plan.
6.7 ERISA and IRC Disclaimer. It is intended that the Plan be neither
an "employee welfare benefit plan" nor an "employee pension benefit plan" for
purposes of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Further, it is intended that the Plan will not cause the interest of
a Participant under the Plan to be includable in the gross income of such
Participant prior to the actual receipt of a payment under the Plan for purposes
of the Internal Revenue Code of 1986, as amended ("IRC").
6.8 Regulatory Matters.
(a) The Participant shall have no right to receive compensation or
other benefits in accordance with the Plan for any period after termination of
service for Just Cause. Termination for "Just Cause" shall include termination
because of the Participant'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 the Plan.
(b) Notwithstanding anything herein to the contrary, any payments made
to a Participant pursuant to the Plan shall be subject to and conditioned upon
compliance with 12 USC ss.1828(k) and any regulations promulgated thereunder.
6.9 Incompetency. If the Savings Bank shall find that any person to
whom any payment is payable under the Plan is deemed unable to care for his or
her personal affairs because of illness or accident, any payment due (unless a
prior claim therefor shall have been made by a duly appointed guardian,
committee or other legal representative) may be paid to the spouse, a child, a
parent, or a brother or sister, or to any person deemed by the Savings Bank to
have incurred expense for such person otherwise entitled to payment, in such
manner and proportions as the Board may determine in its sole discretion. Any
such payments shall constitute a complete discharge of the liabilities of the
Savings Bank under the Plan.
6.10 Construction. The Committee shall have full power and authority to
interpret, construe and administer this Plan and the Committee's interpretations
and construction thereof, and actions thereunder, shall be binding and
conclusive on all persons for all purposes.
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Directors of the Savings Bank shall not be liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this Plan unless attributable to his or her own willful, gross misconduct or
lack of good faith.
6.11 Plan Administration. The Board shall administer the Plan;
provided, however, that the Board may appoint an administrative committee (i.e.,
the Committee) to provide administrative services or perform duties required by
this Plan. The Committee shall have only the authority granted to it by the
Board.
6.12 Governing Law. This Plan shall be construed in accordance with and
governed by the laws of the State of Kansas ("State"), except to the extent that
federal law shall be deemed to apply.
6.13 Successors and Assigns. The Plan shall be binding upon any
successor or successors of the Savings Bank, and unless clearly inapplicable,
reference herein to the Savings Bank shall be deemed to include any successor or
successors of the Savings Bank.
6.14 Sole Agreement. The Plan expresses, embodies, and supersedes all
previous agreements, understandings, and commitments, whether written or oral,
between the Savings Bank and any Participants hereto with respect to the subject
matter hereof.
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