EXHIBIT 10(f)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of October 1, 2001, by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"), Klamath
Falls, Oregon; KLAMATH FIRST BANCORP, INC. (the "Company"), an Oregon
corporation; and
M. Isabel Castellanos (the "Executive").
WHEREAS, the Association wishes to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.
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.
During the period of his employment hereunder, Executive agrees to serve as
Senior Vice President of the Association. During said period, Executive also
agrees to serve, if elected, as an officer of the Company or any subsidiary or
affiliate of the Company or the Association.
2. TERMS AND DUTIES.
(a) The term of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue for a period of
twenty-four (24) full calendar months thereafter. Commencing on the
first anniversary date, and continuing at each anniversary date
thereafter, the Board of Directors of the Association (the "Board")
may extend the Agreement for an additional year. Prior to the
extension of the Agreement as provided herein, the Board of Directors
of the Association will conduct a formal performance evaluation of the
Executive for purposes of determining whether to extend the Agreement,
and the results thereof shall be included in the minutes of the
Board's meeting.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all
his business time, attention, skill, and efforts to the faithful
performance of his duties hereunder including activities and services
related to the organization, operation and management of the
Association; provided, however, that, with the approval of the Board,
as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors
of, and hold any other offices or positions in, companies or
organizations, which, in such Board's judgment, will not present any
conflict of interest with the Association, or materially affect the
performance of Executive's duties pursuant to this Agreement.
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3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Sections 1 and 2.
The Association shall pay Executive as compensation a salary of $
95,000 per year ("Base Salary"). Such Base Salary shall be payable in
accordance with the customary payroll practices of the Association.
During the period of this Agreement, Executive's Base Salary shall be
reviewed at least annually; the first such review will be made no
later than one year from the date of this Agreement. Such review shall
be conducted by a Committee designated by the Board, and the Board may
increase Executive's Base Salary. In addition to the Base Salary
provided in this Section 3(a), the Association shall provide Executive
at no cost to Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Association.
(b) The Association will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in
which Executive was participating or otherwise deriving benefit from
immediately prior to the beginning of the term of this Agreement, and
the Association will not, without Executive's prior written consent,
make any changes in such plans, arrangements or perquisites which
would adversely affect Executive's rights or benefits thereunder.
Without limiting the generality of the foregoing provisions of this
Subsection (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 plan, medical
coverage or any other employee benefit plan or arrangement made
available by the Association 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 incentive compensation
and bonuses as provided in any plan, or pursuant to any arrangement of
the Association, in which Executive is eligible to participate.
Nothing paid to the Executive under any such plan or arrangement will
be deemed to be in lieu of other compensation to which the Executive
is entitled under this Agreement, except as provided under Section
5(e).
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Association shall pay or reimburse Executive for all
reasonable travel and other obligations under this Agreement and may
provide such additional compensation in such form and such amounts as
the Board may from time to time determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the
provisions of this Section shall apply. As used in this Agreement, an
"Event of Termination" shall mean and include any one or more of the
following: (i) the termination by the Association of Executive's
full-time employment hereunder for any reason other than a Change in
Control, as defined in Section 5(a) hereof; disability, as defined in
Section 6(a) hereof; death; retirement, as defined in Section 7
hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
resignation from the Association's employ, upon (A) unless consented
to by the Executive, a material change in Executive's function,
duties, or responsibilities, which change would cause Executive's
position to become one of lesser responsibility, importance, or scope
from the position and attributes thereof described in Sections 1 and
2, above, (any such material change shall be deemed a continuing
breach of this Agreement), (B) a relocation of Executive's principal
place of employment by more than 35 miles from its location at the
effective date of this Agreement, or a material reduction in the
benefits and perquisites to Executive from those being provided as of
the effective date of this Agreement, (C) the liquidation or
dissolution of the Association, or (D) any breach of this Agreement by
the Association. Upon the occurrence of any event described in clauses
(A), (B), (C), or (D), above, Executive shall have the right to elect
to terminate his employment under this Agreement by resignation upon
not less than sixty (60) days prior written notice given within a
reasonable period of time not to exceed, except in case of a
continuing breach, four calendar months after the event giving rise to
said right to elect.
(b) Upon the occurrence of an Event of Termination, the Association shall
pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to the
payments due to the Executive for the remaining term of the Agreement,
including Base Salary, bonuses, and any other cash or deferred
compensation paid or to be paid (including the value of employer
contributions that would have been made on the Executive's behalf over
the remaining term of the agreement to any tax-qualified retirement
plan sponsored by the Association as of the Date of Termination), to
the Executive for the term of the Agreement provided, however, that if
the Association is not in compliance with its minimum capital
requirements or if such payments would cause the Association's capital
to be reduced below its minimum capital requirements, such payments
shall be deferred until such time as the Association is in capital
compliance. All payments made pursuant to this Section 4(b) shall be
paid in substantially equal monthly installments over the remaining
term of this Agreement following the Executive's termination;
provided, however, that if the remaining term of the Agreement is less
than one (1) year (determined as of the Executive's Date of
Termination), such payments and benefits shall be paid to the
Executive in a lump sum within 30 days of the Date of Termination.
(c) Upon the occurrence of an Event of Termination, the Association will
cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Association
for Executive prior to his termination. Such coverage shall cease upon
the expiration of the remaining term of this Agreement.
5. CHANGE IN CONTROL.
(a) No benefit shall be paid under this Section 5 unless there shall have
occurred a Change in Control of the Company or the Association. For
purposes of this Agreement, a "Change in Control" of the Company or
the Association shall be deemed to occur if and when (a) an offeror
other than the Company purchases shares of the common stock of the
Company or the Association pursuant to a tender or exchange offer for
such shares, (b) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
or the Association representing 25% or more of the combined voting
power of the Company's then outstanding securities, (c) the membership
of the board of directors of the Company or the Association changes as
the result of a contested election, such that individuals who were
directors at the beginning of any twenty-four month period (whether
commencing before or after the effective date of this Agreement) do
not constitute a majority of the Board at the end of such period, or
(d) shareholders of the Company or the Association approve a merger,
consolidation, sale or disposition of all or substantially all of the
Company's or the Association's assets, or a plan of partial or
complete liquidation.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board of the Association or the
Company has determined that a Change in Control has occurred,
Executive shall be entitled to the benefits provided in paragraphs
(c), (d) and (e) of this Section 5 upon his subsequent involuntary
termination of employment at any time during the term of this
Agreement (or voluntary termination following a Change of Control
following any demotion, loss of title, office or significant
authority, reduction in his annual compensation or benefits, or
relocation of his principal place of employment by more than 35 miles
from its location immediately prior to the Change in Control), unless
such termination is because of his death, retirement as provided in
Section 7, termination for Cause, or termination for Disability.
(c) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association shall pay Executive, or in
the event of his subsequent death, his beneficiary or beneficiaries,
or his estate, as the case may be, as severance pay or liquidated
damages, or both, a sum equal to 2.99 times the Executive's "base
amount," within the meaning of section 280G(b)(3) of the Internal
Revenue Code of 1986 ("Code"), as amended. Such payment shall be made
in a lump sum paid within ten (10) days of the Executive's Date of
Termination.
(d) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association will cause to be continued
life, medical, dental and disability coverage substantially identical
to the coverage maintained by the Association for Executive prior to
his severance. In addition, Executive shall be entitled to receive the
value of employer contributions that would have been made on the
Executive's behalf over the remaining term of the agreement to any
tax-qualified retirement plan sponsored by the Association as of the
Date of Termination. Such coverage and payments shall cease upon the
expiration of thirty-six (36) months.
(e) Upon the occurrence of a Change in Control, the Executive shall be
entitled to receive benefits due him under, or contributed by the
Company or the Association on his behalf, pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other
employee benefit plan maintained by the Association or the Company on
the Executive's behalf to the extent that such benefits are not
otherwise paid to the Executive upon a Change in Control.
(f) Notwithstanding the preceding paragraphs of this Section 5, in the
event that the aggregate payments or benefits to be made or afforded
to the Executive under this Section would be deemed to include an
"excess parachute payment" under section 280G of the Code, such
payments or benefits shall be payable or provided to Executive over
the minimum period necessary to reduce the present value of such
payments or benefits to an amount which is one dollar ($1.00) less
than three (3) times the Executive's "base amount" under section
280G(b)(3) of the Code.
6. TERMINATION FOR DISABILITY.
(a) If the Executive shall become disabled as defined in the Association's
then current disability plan (or, if no such plan is then in effect,
if the Executive is permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code as determined by a physician
designated by the Board), the Association may terminate Executive's
employment for "Disability."
(b) Upon the Executive's termination of employment for Disability, the
Association will pay Executive, as disability pay, a bi-weekly payment
equal to three-quarters (3/4) of Executive's bi-weekly rate of Base
Salary on the effective date of such termination. These disability
payments shall commence on the effective date of Executive's
termination and will end on the earlier of (i) the date Executive
returns to the full-time employment of the Association in the same
capacity as he was employed prior to his termination for Disability
and pursuant to an employment agreement between Executive and the
Association; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive's
death; or (v) the expiration of the term of this Agreement. The
disability pay shall be reduced by the amount, if any, paid to the
Executive under any plan of the Association providing disability
benefits to the Executive.
(c) The Association will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained
by the Association for Executive prior to his termination for
Disability. This coverage and payments shall cease upon the earlier of
(i) the date Executive returns to the full-time employment of the
Association, in the same capacity as he was employed prior to his
termination for Disability and pursuant to an employment agreement
between Executive and the Association; (ii) Executive's full-time
employment by another employer; (iii) Executive's attaining the age of
65; or (iv) the Executive's death; or (v) the expiration of the term
of this Agreement.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during
which Executive is incapable of performing his duties hereunder by
reason of temporary disability.
7. TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.
Termination by the Association of Executive based on "Retirement" shall
mean retirement at age 65 or in accordance with any retirement arrangement
established with Executive's consent with respect to him. Upon termination
of Executive upon Retirement, Executive shall be entitled to all benefits
under any retirement plan of the Association or the Company and other plans
to which Executive is a party. Upon the death of the Executive during the
term of this Agreement, the Association shall pay to Executive's estate the
compensation due to the Executive through the last day of the calendar
month in which his death occurred.
8. TERMINATION FOR CAUSE.
For purposes of this Agreement, "Termination for Cause" shall include
termination because of the Executive's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
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. In addition,
"Termination for Cause" shall include termination because of continuing or
repeated problems with the Executive's performance or conduct, the
Executive's inattention to duties, the refusal of the Executive to comply
with the Association's or the Company's instructions, policies or rules or
other conduct of the Executive which reflects adversely on the
Association's or the Company 's reputation or operation. For 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 interest of
the Association or its affiliates. Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to him a copy of a resolution duly adopted
by the affirmative vote of not less than three-fourths 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 reasons thereof. The Executive
shall not have the right to receive compensation or other benefits for any
period after termination for Cause. Any stock options granted to Executive
under any stock option plan or any unvested awards granted under any other
stock benefit plan of the Association, the Company, or any subsidiary or
affiliate thereof, shall become null and void effective upon Executive's
receipt of Notice of Termination for Cause pursuant to Section 9 hereof,
and shall not be exercisable by Executive at any time subsequent to such
Termination for Cause.
9. REQUIRED PROVISIONS.
(a) The Association may terminate Executive's employment at any time, but
any termination by the Association, other than Termination for Cause,
shall not prejudice Executive's right to compensation or other
benefits under this Agreement. Executive shall not have the right to
receive compensation or other benefits for any period after
Termination for Cause as defined in Section 8 herein.
(b) If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. 1818(e)(3) and (g)(1)), the
Association's obligations under the Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Association 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 that were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(4) or (g)(1)), all obligations of the Association under the
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 Association is in default (as defined in Section 3(x)(1) of the
FDIA), all obligations under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested rights
of the parties.
(e) All obligations under this Agreement shall be terminated (except to
the extent determined that continuation of the Agreement is necessary
for the continued operation of the Association): (i) by the Director
of the Office of Thrift Supervision (the "Director") or his or her
designee at the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide
assistance to or on behalf of the Association under the authority
contained in Section 13(c) of the FDIA or (ii) by the Director, or his
or her designee at the time the Director or such designee approves a
supervisory merger to resolve problems related to operation of the
Association or when the Association 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) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12
U.S.C. section 1828(k) and any regulations promulgated thereunder.
10. NOTICE.
(a) Any purported termination by the Association 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 he shall not have returned to the
performance of his duties on a full-time basis during such thirty (30)
day period), and (B) if his employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a Termination for Cause, shall not be less than thirty (30)
days from the date such Notice of Termination is given).
(c) If, within thirty (30) 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, except upon
the occurrence of a Change in Control and voluntary termination by the
Executive in which case the Date of Termination shall be the date
specified in the Notice, 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 there from 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, the Association will continue to pay
Executive his full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, Base Salary)
and continue him as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice of
dispute was given, until the dispute is finally resolved in accordance
with this Agreement. Amounts paid under this Section are in addition
to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
11. NON-COMPETITION.
(a) Upon any termination of Executive's employment hereunder pursuant to
an Event of Termination as provided in Section 4 hereof, Executive
agrees not to compete with the Association and/or the Company for a
period of one (1) year following such termination in any city, town or
county in which the Association and/or the Company has an office or
has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination.
Executive agrees that during such period and within said cities, towns
and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other
business activities of the Association and/or the Company. The parties
hereto, recognizing that irreparable injury will result to the
Association and/or the Company, its business and property in the event
of Executive's breach of this Subsection 11(a) agree that in the event
of any such breach by Executive, the Association and/or the Company
will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by
Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive
represents and admits that in the event of the termination of his
employment pursuant to Section 8 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the
Association and/or the Company, and that the enforcement of a remedy
by way of injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the
Association and/or the Company from pursuing any other remedies
available to the Association and/or the Company for such breach or
threatened breach, including the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the
Association and affiliates thereof, as it may exist from time to time,
is a valuable, special and unique asset of the business of the
Association. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or
considered business activities of the Association or affiliates
thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. 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 Association. In
the event of a breach or threatened breach by the Executive of the
provisions of this Section, the Association will be entitled to an
injunction restraining Executive from disclosing, in whole or in part,
the knowledge of the past, present, planned or considered business
activities of the Association or affiliates thereof, or from rendering
any services to any person, firm, corporation, 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 Association from pursuing any other remedies available
to the Association for such breach or threatened breach, including the
recovery of damages from Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Company, however,
guarantees all payments and the provision of all amounts and benefits due
hereunder to Executive and, if such payments are not timely paid or
provided by the Association, such amounts and benefits shall be paid or
provided by the Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Association or
any predecessor of the Association and Executive, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to the 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 without reference to
this Agreement.
14. NO ATTACHMENT.
(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 Association, the Company and their respective
successors and assigns.
15. 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.
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.
18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Oregon, unless
otherwise specified herein; provided, however, that in the event of a
conflict between the terms of this Agreement and any applicable federal or
state law or regulation, the provisions of such law or regulation shall
prevail.
19. ARBITRATION.
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 the employee
within one hundred (100) miles from the location of the Association, 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 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.
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 Association, if successful pursuant to a legal
judgment, arbitration or settlement.
21. INDEMNIFICATION.
The Association shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the
fullest extent permitted under law against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action,
suite or proceeding in which he may be involved by reason of his having
been a director or officer of the Association (whether or not he continues
to be a directors or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited
to, judgment, court costs and attorneys' fees and the cost of reasonable
settlements.
22. SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.
The Association and the Company 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
Association or the Company, expressly and unconditionally to assume and
agree to perform the Association's or the Company's obligations under this
Agreement, in the same manner and to the same extent that the Association
or the Company would be required to perform if no such succession or
assignment had taken place.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their seal to be affixed hereunto by a duly authorized officer
or director, and Executive has signed this Agreement, all on the
day of , 20 .
ATTEST: KLAMATH FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION
BY:
[SEAL]
ATTEST: KLAMATH FIRST BANCORP, INC.
BY: ________________________
[SEAL]
WITNESS:
___________________________
M. Isabel Castellanos
EXHIBIT 10(g)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of January 2, 2002, by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"), Klamath
Falls, Oregon; KLAMATH FIRST BANCORP, INC. (the "Company"), an Oregon
corporation; and Walt Dodrill (the "Executive").
WHEREAS, the Association wishes to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.
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.
During the period of his employment hereunder, Executive agrees to serve as
Senior Vice President of the Association. During said period, Executive also
agrees to serve, if elected, as an officer of the Company or any subsidiary or
affiliate of the Company or the Association.
2. TERMS AND DUTIES.
(a) The term of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue for a period of
twenty-four (24) full calendar months thereafter. Commencing on the
first anniversary date, and continuing at each anniversary date
thereafter, the Board of Directors of the Association (the "Board")
may extend the Agreement for an additional year. Prior to the
extension of the Agreement as provided herein, the Board of Directors
of the Association will conduct a formal performance evaluation of the
Executive for purposes of determining whether to extend the Agreement,
and the results thereof shall be included in the minutes of the
Board's meeting.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all
his business time, attention, skill, and efforts to the faithful
performance of his duties hereunder including activities and services
related to the organization, operation and management of the
Association; provided, however, that, with the approval of the Board,
as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors
of, and hold any other offices or positions in, companies or
organizations, which, in such Board's judgment, will not present any
conflict of interest with the Association, or materially affect the
performance of Executive's duties pursuant to this Agreement.
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3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Sections 1 and 2.
The Association shall pay Executive as compensation a salary of $
110,000 per year ("Base Salary"). Such Base Salary shall be payable in
accordance with the customary payroll practices of the Association.
During the period of this Agreement, Executive's Base Salary shall be
reviewed at least annually; the first such review will be made no
later than one year from the date of this Agreement. Such review shall
be conducted by a Committee designated by the Board, and the Board may
increase Executive's Base Salary. In addition to the Base Salary
provided in this Section 3(a), the Association shall provide Executive
at no cost to Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Association.
(b) The Association will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in
which Executive was participating or otherwise deriving benefit from
immediately prior to the beginning of the term of this Agreement, and
the Association will not, without Executive's prior written consent,
make any changes in such plans, arrangements or perquisites which
would adversely affect Executive's rights or benefits thereunder.
Without limiting the generality of the foregoing provisions of this
Subsection (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 plan, medical
coverage or any other employee benefit plan or arrangement made
available by the Association 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 incentive compensation
and bonuses as provided in any plan, or pursuant to any arrangement of
the Association, in which Executive is eligible to participate.
Nothing paid to the Executive under any such plan or arrangement will
be deemed to be in lieu of other compensation to which the Executive
is entitled under this Agreement, except as provided under Section
5(e).
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Association shall pay or reimburse Executive for all
reasonable travel and other obligations under this Agreement and may
provide such additional compensation in such form and such amounts as
the Board may from time to time determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the
provisions of this Section shall apply. As used in this Agreement, an
"Event of Termination" shall mean and include any one or more of the
following: (i) the termination by the Association of Executive's
full-time employment hereunder for any reason other than a Change in
Control, as defined in Section 5(a) hereof; disability, as defined in
Section 6(a) hereof; death; retirement, as defined in Section 7
hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
resignation from the Association's employ, upon (A) unless consented
to by the Executive, a material change in Executive's function,
duties, or responsibilities, which change would cause Executive's
position to become one of lesser responsibility, importance, or scope
from the position and attributes thereof described in Sections 1 and
2, above, (any such material change shall be deemed a continuing
breach of this Agreement), (B) a relocation of Executive's principal
place of employment by more than 35 miles from its location at the
effective date of this Agreement, or a material reduction in the
benefits and perquisites to Executive from those being provided as of
the effective date of this Agreement, (C) the liquidation or
dissolution of the Association, or (D) any breach of this Agreement by
the Association. Upon the occurrence of any event described in clauses
(A), (B), (C), or (D), above, Executive shall have the right to elect
to terminate his employment under this Agreement by resignation upon
not less than sixty (60) days prior written notice given within a
reasonable period of time not to exceed, except in case of a
continuing breach, four calendar months after the event giving rise to
said right to elect.
(b) Upon the occurrence of an Event of Termination, the Association shall
pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to the
payments due to the Executive for the remaining term of the Agreement,
including Base Salary, bonuses, and any other cash or deferred
compensation paid or to be paid (including the value of employer
contributions that would have been made on the Executive's behalf over
the remaining term of the agreement to any tax-qualified retirement
plan sponsored by the Association as of the Date of Termination), to
the Executive for the term of the Agreement provided, however, that if
the Association is not in compliance with its minimum capital
requirements or if such payments would cause the Association's capital
to be reduced below its minimum capital requirements, such payments
shall be deferred until such time as the Association is in capital
compliance. All payments made pursuant to this Section 4(b) shall be
paid in substantially equal monthly installments over the remaining
term of this Agreement following the Executive's termination;
provided, however, that if the remaining term of the Agreement is less
than one (1) year (determined as of the Executive's Date of
Termination), such payments and benefits shall be paid to the
Executive in a lump sum within 30 days of the Date of Termination.
(c) Upon the occurrence of an Event of Termination, the Association will
cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Association
for Executive prior to his termination. Such coverage shall cease upon
the expiration of the remaining term of this Agreement.
5. CHANGE IN CONTROL.
(a) No benefit shall be paid under this Section 5 unless there shall have
occurred a Change in Control of the Company or the Association. For
purposes of this Agreement, a "Change in Control" of the Company or
the Association shall be deemed to occur if and when (a) an offeror
other than the Company purchases shares of the common stock of the
Company or the Association pursuant to a tender or exchange offer for
such shares, (b) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
or the Association representing 25% or more of the combined voting
power of the Company's then outstanding securities, (c) the membership
of the board of directors of the Company or the Association changes as
the result of a contested election, such that individuals who were
directors at the beginning of any twenty-four month period (whether
commencing before or after the date of adoption of this Plan) do not
constitute a majority of the Board at the end of such period, or (d)
shareholders of the Company or the Association approve a merger,
consolidation, sale or disposition of all or substantially all of the
Company's or the Association's assets, or a plan of partial or
complete liquidation.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board of the Association or the
Company has determined that a Change in Control has occurred,
Executive shall be entitled to the benefits provided in paragraphs
(c), (d) and (e) of this Section 5 upon his subsequent involuntary
termination of employment at any time during the term of this
Agreement (or voluntary termination following a Change of Control
following any demotion, loss of title, office or significant
authority, reduction in his annual compensation or benefits, or
relocation of his principal place of employment by more than 35 miles
from its location immediately prior to the Change in Control), unless
such termination is because of his death, retirement as provided in
Section 7, termination for Cause, or termination for Disability.
(c) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association shall pay Executive, or in
the event of his subsequent death, his beneficiary or beneficiaries,
or his estate, as the case may be, as severance pay or liquidated
damages, or both, a sum equal to 2.99 times the Executive's "base
amount," within the meaning of section 280G(b)(3) of the Internal
Revenue Code of 1986 ("Code"), as amended. Such payment shall be made
in a lump sum paid within ten (10) days of the Executive's Date of
Termination.
(d) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association will cause to be continued
life, medical, dental and disability coverage substantially identical
to the coverage maintained by the Association for Executive prior to
his severance. In addition, Executive shall be entitled to receive the
value of employer contributions that would have been made on the
Executive's behalf over the remaining term of the agreement to any
tax-qualified retirement plan sponsored by the Association as of the
Date of Termination. Such coverage and payments shall cease upon the
expiration of twenty-four (24) months.
(e) Upon the occurrence of a Change in Control, the Executive shall be
entitled to receive benefits due him under, or contributed by the
Company or the Association on his behalf, pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other
employee benefit plan maintained by the Association or the Company on
the Executive's behalf to the extent that such benefits are not
otherwise paid to the Executive upon a Change in Control.
(f) Notwithstanding the preceding paragraphs of this Section 5, in the
event that the aggregate payments or benefits to be made or afforded
to the Executive under this Section would be deemed to include an
"excess parachute payment" under section 280G of the Code, such
payments or benefits shall be payable or provided to Executive over
the minimum period necessary to reduce the present value of such
payments or benefits to an amount which is one dollar ($1.00) less
than three (3) times the Executive's "base amount" under section
280G(b)(3) of the Code.
6. TERMINATION FOR DISABILITY.
(a) If the Executive shall become disabled as defined in the Association's
then current disability plan (or, if no such plan is then in effect,
if the Executive is permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code as determined by a physician
designated by the Board), the Association may terminate Executive's
employment for "Disability."
(b) Upon the Executive's termination of employment for Disability, the
Association will pay Executive, as disability pay, a bi-weekly payment
equal to three-quarters (3/4) of Executive's bi-weekly rate of Base
Salary on the effective date of such termination. These disability
payments shall commence on the effective date of Executive's
termination and will end on the earlier of (i) the date Executive
returns to the full-time employment of the Association in the same
capacity as he was employed prior to his termination for Disability
and pursuant to an employment agreement between Executive and the
Association; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive's
death; or (v) the expiration of the term of this Agreement. The
disability pay shall be reduced by the amount, if any, paid to the
Executive under any plan of the Association providing disability
benefits to the Executive.
(c) The Association will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained
by the Association for Executive prior to his termination for
Disability. This coverage and payments shall cease upon the earlier of
(i) the date Executive returns to the full-time employment of the
Association, in the same capacity as he was employed prior to his
termination for Disability and pursuant to an employment agreement
between Executive and the Association; (ii) Executive's full-time
employment by another employer; (iii) Executive's attaining the age of
65; or (iv) the Executive's death; or (v) the expiration of the term
of this Agreement.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during
which Executive is incapable of performing his duties hereunder by
reason of temporary disability.
7. TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.
Termination by the Association of Executive based on "Retirement" shall
mean retirement at age 65 or in accordance with any retirement arrangement
established with Executive's consent with respect to him. Upon termination
of Executive upon Retirement, Executive shall be entitled to all benefits
under any retirement plan of the Association or the Company and other plans
to which Executive is a party. Upon the death of the Executive during the
term of this Agreement, the Association shall pay to Executive's estate the
compensation due to the Executive through the last day of the calendar
month in which his death occurred.
8. TERMINATION FOR CAUSE.
For purposes of this Agreement, "Termination for Cause" shall include
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. For 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 interest of the Association or its affiliates. Notwithstanding
the foregoing, Executive shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than
three-fourths 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 reasons
thereof. The Executive shall not have the right to receive compensation or
other benefits for any period after termination for Cause. Any stock
options granted to Executive under any stock option plan or any unvested
awards granted under any other stock benefit plan of the Association, the
Company, or any subsidiary or affiliate thereof, shall become null and void
effective upon Executive's receipt of Notice of Termination for Cause
pursuant to Section 9 hereof, and shall not be exercisable by Executive at
any time subsequent to such Termination for Cause.
9. REQUIRED PROVISIONS.
(a) The Association may terminate Executive's employment at any time, but
any termination by the Association, other than Termination for Cause,
shall not prejudice Executive's right to compensation or other
benefits under this Agreement. Executive shall not have the right to
receive compensation or other benefits for any period after
Termination for Cause as defined in Section 8 herein.
(b) If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. 1818(e)(3) and (g)(1)), the
Association's obligations under the Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Association 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 that were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(4) or (g)(1)), all obligations of the Association under the
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 Association is in default (as defined in Section 3(x)(1) of the
FDIA), all obligations under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested rights
of the parties.
(e) All obligations under this Agreement shall be terminated (except to
the extent determined that continuation of the Agreement is necessary
for the continued operation of the Association): (i) by the Director
of the Office of Thrift Supervision (the "Director") or his or her
designee at the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide
assistance to or on behalf of the Association under the authority
contained in Section 13(c) of the FDIA or (ii) by the Director, or his
or her designee at the time the Director or such designee approves a
supervisory merger to resolve problems related to operation of the
Association or when the Association 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) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12
U.S.C. section 1828(k) and any regulations promulgated thereunder.
10. NOTICE.
(a) Any purported termination by the Association 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 he shall not have returned to the
performance of his duties on a full-time basis during such thirty (30)
day period), and (B) if his employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a Termination for Cause, shall not be less than thirty (30)
days from the date such Notice of Termination is given).
(c) If, within thirty (30) 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, except upon
the occurrence of a Change in Control and voluntary termination by the
Executive in which case the Date of Termination shall be the date
specified in the Notice, 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 there from 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, the Association will continue to pay
Executive his full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, Base Salary)
and continue him as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice of
dispute was given, until the dispute is finally resolved in accordance
with this Agreement. Amounts paid under this Section are in addition
to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
11. NON-COMPETITION.
(a) Upon any termination of Executive's employment hereunder pursuant to
an Event of Termination as provided in Section 4 hereof, Executive
agrees not to compete with the Association and/or the Company for a
period of one (1) year following such termination in any city, town or
county in which the Association and/or the Company has an office or
has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination.
Executive agrees that during such period and within said cities, towns
and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other
business activities of the Association and/or the Company. The parties
hereto, recognizing that irreparable injury will result to the
Association and/or the Company, its business and property in the event
of Executive's breach of this Subsection 11(a) agree that in the event
of any such breach by Executive, the Association and/or the Company
will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by
Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive
represents and admits that in the event of the termination of his
employment pursuant to Section 8 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the
Association and/or the Company, and that the enforcement of a remedy
by way of injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the
Association and/or the Company from pursuing any other remedies
available to the Association and/or the Company for such breach or
threatened breach, including the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the
Association and affiliates thereof, as it may exist from time to time,
is a valuable, special and unique asset of the business of the
Association. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or
considered business activities of the Association or affiliates
thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. 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 Association. In
the event of a breach or threatened breach by the Executive of the
provisions of this Section, the Association will be entitled to an
injunction restraining Executive from disclosing, in whole or in part,
the knowledge of the past, present, planned or considered business
activities of the Association or affiliates thereof, or from rendering
any services to any person, firm, corporation, 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 Association from pursuing any other remedies available
to the Association for such breach or threatened breach, including the
recovery of damages from Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Company, however,
guarantees all payments and the provision of all amounts and benefits due
hereunder to Executive and, if such payments are not timely paid or
provided by the Association, such amounts and benefits shall be paid or
provided by the Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Association or
any predecessor of the Association and Executive, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to the 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 without reference to
this Agreement.
14. NO ATTACHMENT.
(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 Association, the Company and their respective
successors and assigns.
15. 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.
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.
18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Oregon, unless
otherwise specified herein; provided, however, that in the event of a
conflict between the terms of this Agreement and any applicable federal or
state law or regulation, the provisions of such law or regulation shall
prevail.
19. ARBITRATION.
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 the employee
within one hundred (100) miles from the location of the Association, 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 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.
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 Association, if successful pursuant to a legal
judgment, arbitration or settlement.
21. INDEMNIFICATION.
The Association shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the
fullest extent permitted under law against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action,
suite or proceeding in which he may be involved by reason of his having
been a director or officer of the Association (whether or not he continues
to be a directors or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited
to, judgment, court costs and attorneys' fees and the cost of reasonable
settlements.
22. SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.
The Association and the Company 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
Association or the Company, expressly and unconditionally to assume and
agree to perform the Association's or the Company's obligations under this
Agreement, in the same manner and to the same extent that the Association
or the Company would be required to perform if no such succession or
assignment had taken place.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their seal to be affixed hereunto by a duly authorized officer
or director, and Executive has signed this Agreement, all on the day of ,
20 .
ATTEST: KLAMATH FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION
BY:
[SEAL]
ATTEST: KLAMATH FIRST BANCORP, INC.
BY: ________________________
[SEAL]
WITNESS:
___________________________
Walt Dodrill
EXHIBIT 10(h)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of October 1, 2002, by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"), Klamath
Falls, Oregon; KLAMATH FIRST BANCORP, INC. (the "Company"), an Oregon
corporation; and James E. Essany (the "Executive").
WHEREAS, the Association wishes to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.
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.
During the period of his employment hereunder, Executive agrees to serve as
Senior Vice President of the Association. During said period, Executive also
agrees to serve, if elected, as an officer of the Company or any subsidiary or
affiliate of the Company or the Association.
2. TERMS AND DUTIES.
(a) The term of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue for a period of
twenty-four (24) full calendar months thereafter. Commencing on the
first anniversary date, and continuing at each anniversary date
thereafter, the Board of Directors of the Association (the "Board") or
its Compensation Committee may extend the Agreement for an additional
year. Prior to the extension of the Agreement as provided herein, the
Board of Directors of the Association will review the Executive's
performance evaluation for purposes of determining whether to extend
the Agreement, and the results thereof shall be included in the
minutes of the Board's meeting.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all
his business time, attention, skill, and efforts to the faithful
performance of his duties hereunder including activities and services
related to the organization, operation and management of the
Association; provided, however, that, with the approval of the Board,
as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors
of, and hold any other offices or positions in, companies or
organizations, which, in such Board's judgment, will not present any
conflict of interest with the Association, or materially affect the
performance of Executive's duties pursuant to this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Sections 1 and 2.
The Association shall pay Executive as compensation a salary of
$85,000 per year ("Base Salary"). Effective November 1, 2002, the Base
Salary shall be calculated at $95,000 per year unless subsequently
changed as provided below. Such Base Salary shall be payable in
accordance with the customary payroll practices of the Association.
During the period of this Agreement, Executive's Base Salary shall be
reviewed at least annually; the first such review will be made no
later than one year from the date of this Agreement. Such review shall
be conducted by the Board or its Compensation Committee, and the Board
may increase Executive's Base Salary. In addition to the Base Salary
provided in this Section 3(a), the Association shall provide Executive
at no cost to Executive with all such other benefits as are provided
uniformly to regular salaried employees of the Association.
(b) The Association will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in
which Executive was participating or otherwise deriving benefit from
immediately prior to the beginning of the term of this Agreement, and
the Association will not, without Executive's prior written consent,
make any changes in such plans, arrangements or perquisites which
would adversely affect Executive's rights or benefits thereunder.
However, changes in Association-sponsored group insurance plan
premiums, deductibles, co-payments, and related coverage limits or
conditions are excluded from the prior sentence for any such change
which is consistently applied to or available to regular salaried
Association employees. Without limiting the generality of the
foregoing provisions of this Subsection (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 plan, medical coverage or any other employee
benefit plan or arrangement made available by the Association 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 incentive compensation and bonuses as provided in any
plan, or pursuant to any arrangement of the Association, in which
Executive is eligible to participate. Nothing paid to the Executive
under any such plan or arrangement will be deemed to be in lieu of
other compensation to which the Executive is entitled under this
Agreement, except as provided under Section 5(e).
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Association shall pay or reimburse Executive for all
reasonable travel and other obligations under this Agreement and may
provide such additional compensation in such form and such amounts as
the Board may from time to time determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the
provisions of this Section shall apply. As used in this Agreement, an
"Event of Termination" shall mean and include any one or more of the
following: (i) the termination by the Association of Executive's
full-time employment hereunder for any reason other than a Change in
Control, as defined in Section 5(a) hereof; disability, as defined in
Section 6(a) hereof; death; retirement, as defined in Section 7
hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
resignation from the Association's employ, upon (A) unless consented
to by the Executive, a material change in Executive's function,
duties, or responsibilities, which change would cause Executive's
position to become one of lesser responsibility, importance, or scope
from the position and attributes thereof described in Sections 1 and
2, above, (any such material change shall be deemed a continuing
breach of this Agreement), (B) a relocation of Executive's principal
place of employment by more than 35 miles from its location at the
effective date of this Agreement, or a material reduction in the
benefits and perquisites to Executive from those being provided as of
the effective date of this Agreement, (C) the liquidation or
dissolution of the Association, or (D) any breach of this Agreement by
the Association. Upon the occurrence of any event described in clauses
(A), (B), (C), or (D), above, Executive shall have the right to elect
to terminate his employment under this Agreement by resignation upon
not less than sixty (60) days prior written notice given within a
reasonable period of time not to exceed, except in case of a
continuing breach, four calendar months after the event giving rise to
said right to elect.
(b) Upon the occurrence of an Event of Termination, the Association shall
pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to the
payments due to the Executive for the remaining term of the Agreement,
including Base Salary, bonuses, and any other cash or deferred
compensation paid or to be paid (including the value of employer
contributions that would have been made on the Executive's behalf over
the remaining term of the agreement to any tax-qualified retirement
plan sponsored by the Association as of the Date of Termination), to
the Executive for the term of the Agreement provided, however, that if
the Association is not in compliance with its minimum capital
requirements or if such payments would cause the Association's capital
to be reduced below its minimum capital requirements, such payments
shall be deferred until such time as the Association is in capital
compliance. All payments made pursuant to this Section 4(b) shall be
paid in substantially equal monthly installments over the remaining
term of this Agreement following the Executive's termination;
provided, however, that if the remaining term of the Agreement is less
than one (1) year (determined as of the Executive's Date of
Termination), such payments and benefits shall be paid to the
Executive in a lump sum within 30 days of the Date of Termination.
(c) Upon the occurrence of an Event of Termination, the Association will
cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Association
for Executive prior to his termination. Such coverage shall cease upon
the expiration of the remaining term of this Agreement.
5. CHANGE IN CONTROL.
(a) No benefit shall be paid under this Section 5 unless there shall have
occurred a Change in Control of the Company or the Association. For
purposes of this Agreement, a "Change in Control" of the Company or
the Association shall be deemed to occur if and when (a) an offeror
other than the Company purchases shares of the common stock of the
Company or the Association pursuant to a tender or exchange offer for
such shares, (b) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
or the Association representing 25% or more of the combined voting
power of the Company's then outstanding securities, (c) the membership
of the board of directors of the Company or the Association changes as
the result of a contested election, such that individuals who were
directors at the beginning of any twenty-four month period (whether
commencing before or after the effective date of this Agreement) do
not constitute a majority of the Board at the end of such period, or
(d) shareholders of the Company or the Association approve a merger,
consolidation, sale or disposition of all or substantially all of the
Company's or the Association's assets, or a plan of partial or
complete liquidation.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board of the Association or the
Company has determined that a Change in Control has occurred,
Executive shall be entitled to the benefits provided in paragraphs
(c), (d) and (e) of this Section 5 upon his subsequent involuntary
termination of employment at any time during the term of this
Agreement (or voluntary termination following a Change of Control
following any demotion, loss of title, office or significant
authority, reduction in his annual compensation or benefits, or
relocation of his principal place of employment by more than 35 miles
from its location immediately prior to the Change in Control), unless
such termination is because of his death, retirement as provided in
Section 7, termination for Cause, or termination for Disability.
(c) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association shall pay Executive, or in
the event of his subsequent death, his beneficiary or beneficiaries,
or his estate, as the case may be, as severance pay or liquidated
damages, or both, a sum equal to 2.99 times the Executive's "base
amount," within the meaning of section 280G(b)(3) of the Internal
Revenue Code of 1986 ("Code"), as amended. Such payment shall be made
in a lump sum paid within ten (10) days of the Executive's Date of
Termination.
(d) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association will cause to be continued
life, medical, dental and disability coverage substantially identical
to the coverage maintained by the Association for Executive prior to
his severance. In addition, Executive shall be entitled to receive the
value of employer contributions that would have been made on the
Executive's behalf over the remaining term of the agreement to any
tax-qualified retirement plan sponsored by the Association as of the
Date of Termination. Such coverage and payments shall cease upon the
expiration of thirty-six (36) months.
(e) Upon the occurrence of a Change in Control, the Executive shall be
entitled to receive benefits due him under, or contributed by the
Company or the Association on his behalf, pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other
employee benefit plan maintained by the Association or the Company on
the Executive's behalf to the extent that such benefits are not
otherwise paid to the Executive upon a Change in Control.
(f) Notwithstanding the preceding paragraphs of this Section 5, in the
event that the aggregate payments or benefits to be made or afforded
to the Executive under this Section would be deemed to include an
"excess parachute payment" under section 280G of the Code, such
payments or benefits shall be payable or provided to Executive over
the minimum period necessary to reduce the present value of such
payments or benefits to an amount which is one dollar ($1.00) less
than three (3) times the Executive's "base amount" under section
280G(b)(3) of the Code.
6. TERMINATION FOR DISABILITY.
(a) If the Executive shall become disabled as defined in the Association's
then current disability plan (or, if no such plan is then in effect,
if the Executive is permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code as determined by a physician
designated by the Board), the Association may terminate Executive's
employment for "Disability."
(b) Upon the Executive's termination of employment for Disability, the
Association will pay Executive, as disability pay, a bi-weekly payment
equal to three-quarters (3/4) of Executive's bi-weekly rate of Base
Salary on the effective date of such termination. These disability
payments shall commence on the effective date of Executive's
termination and will end on the earlier of (i) the date Executive
returns to the full-time employment of the Association in the same
capacity as he was employed prior to his termination for Disability
and pursuant to an employment agreement between Executive and the
Association; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive's
death; or (v) the expiration of the term of this Agreement. The
disability pay shall be reduced by the amount, if any, paid to the
Executive under any plan of the Association providing disability
benefits to the Executive.
(c) The Association will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained
by the Association for Executive prior to his termination for
Disability. This coverage and payments shall cease upon the earlier of
(i) the date Executive returns to the full-time employment of the
Association, in the same capacity as he was employed prior to his
termination for Disability and pursuant to an employment agreement
between Executive and the Association; (ii) Executive's full-time
employment by another employer; (iii) Executive's attaining the age of
65; or (iv) the Executive's death; or (v) the expiration of the term
of this Agreement.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during
which Executive is incapable of performing his duties hereunder by
reason of temporary disability.
7. TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.
Termination by the Association of Executive based on "Retirement" shall
mean retirement at age 65 or in accordance with any retirement arrangement
established with Executive's consent with respect to him. Upon termination
of Executive upon Retirement, Executive shall be entitled to all benefits
under any retirement plan of the Association or the Company and other plans
to which Executive is a party. Upon the death of the Executive during the
term of this Agreement, the Association shall pay to Executive's estate the
compensation due to the Executive through the last day of the calendar
month in which his death occurred.
8. TERMINATION FOR CAUSE.
For purposes of this Agreement, "Termination for Cause" shall include
termination because of the Executive's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
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. In addition,
"Termination for Cause" shall include termination because of continuing or
repeated problems with the Executive's performance or conduct, the
Executive's inattention to duties, the refusal of the Executive to comply
with the Association's or the Company's instructions, policies or rules or
other conduct of the Executive which reflects adversely on the
Association's or the Company 's reputation or operation. For 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 interest of
the Association or its affiliates. Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to him a copy of a resolution duly adopted
by the affirmative vote of not less than three-fourths 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 reasons thereof. The Executive
shall not have the right to receive compensation or other benefits for any
period after termination for Cause. Any stock options granted to Executive
under any stock option plan or any unvested awards granted under any other
stock benefit plan of the Association, the Company, or any subsidiary or
affiliate thereof, shall become null and void effective upon Executive's
receipt of Notice of Termination for Cause pursuant to Section 9 hereof,
and shall not be exercisable by Executive at any time subsequent to such
Termination for Cause.
9. REQUIRED PROVISIONS.
(a) The Association may terminate Executive's employment at any time, but
any termination by the Association, other than Termination for Cause,
shall not prejudice Executive's right to compensation or other
benefits under this Agreement. Executive shall not have the right to
receive compensation or other benefits for any period after
Termination for Cause as defined in Section 8 herein.
(b) If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. 1818(e)(3) and (g)(1)), the
Association's obligations under the Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Association 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 that were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(4) or (g)(1)), all obligations of the Association under the
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 Association is in default (as defined in Section 3(x)(1) of the
FDIA), all obligations under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested rights
of the parties.
(e) All obligations under this Agreement shall be terminated (except to
the extent determined that continuation of the Agreement is necessary
for the continued operation of the Association): (i) by the Director
of the Office of Thrift Supervision (the "Director") or his or her
designee at the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide
assistance to or on behalf of the Association under the authority
contained in Section 13(c) of the FDIA or (ii) by the Director, or his
or her designee at the time the Director or such designee approves a
supervisory merger to resolve problems related to operation of the
Association or when the Association 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) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12
U.S.C. section 1828(k) and any regulations promulgated thereunder.
10. NOTICE.
(a) Any purported termination by the Association 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 he shall not have returned to the
performance of his duties on a full-time basis during such thirty (30)
day period), and (B) if his employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a Termination for Cause, shall not be less than thirty (30)
days from the date such Notice of Termination is given).
(c) If, within thirty (30) 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, except upon
the occurrence of a Change in Control and voluntary termination by the
Executive in which case the Date of Termination shall be the date
specified in the Notice, 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 there from 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, the Association will continue to pay
Executive his full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, Base Salary)
and continue him as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice of
dispute was given, until the dispute is finally resolved in accordance
with this Agreement. Amounts paid under this Section are in addition
to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
11. NON-COMPETITION.
(a) Upon any termination of Executive's employment hereunder pursuant to
an Event of Termination as provided in Section 4 hereof, Executive
agrees not to compete with the Association and/or the Company for a
period of one (1) year following such termination in any city, town or
county in which the Association and/or the Company has an office or
has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination.
Executive agrees that during such period and within said cities, towns
and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other
business activities of the Association and/or the Company. The parties
hereto, recognizing that irreparable injury will result to the
Association and/or the Company, its business and property in the event
of Executive's breach of this Subsection 11(a) agree that in the event
of any such breach by Executive, the Association and/or the Company
will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by
Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive
represents and admits that in the event of the termination of his
employment pursuant to Section 8 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the
Association and/or the Company, and that the enforcement of a remedy
by way of injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the
Association and/or the Company from pursuing any other remedies
available to the Association and/or the Company for such breach or
threatened breach, including the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the
Association and affiliates thereof, as it may exist from time to time,
is a valuable, special and unique asset of the business of the
Association. Executive will not, during or after the term of his
employment, disclose any knowledge of the past, present, planned or
considered business activities of the Association or affiliates
thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. 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 Association. In
the event of a breach or threatened breach by the Executive of the
provisions of this Section, the Association will be entitled to an
injunction restraining Executive from disclosing, in whole or in part,
the knowledge of the past, present, planned or considered business
activities of the Association or affiliates thereof, or from rendering
any services to any person, firm, corporation, 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 Association from pursuing any other remedies available
to the Association for such breach or threatened breach, including the
recovery of damages from Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Company, however,
guarantees all payments and the provision of all amounts and benefits due
hereunder to Executive and, if such payments are not timely paid or
provided by the Association, such amounts and benefits shall be paid or
provided by the Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Association or
any predecessor of the Association and Executive, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to the 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 without reference to
this Agreement.
14. NO ATTACHMENT.
(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 Association, the Company and their respective
successors and assigns.
15. 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 by 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.
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.
18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Oregon, unless
otherwise specified herein; provided, however, that in the event of a
conflict between the terms of this Agreement and any applicable federal or
state law or regulation, the provisions of such law or regulation shall
prevail.
19. ARBITRATION.
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 the Executive
within one hundred (100) miles from the location of the Association, 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 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.
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 Association, if successful pursuant to a legal
judgment, arbitration or settlement.
21. INDEMNIFICATION.
The Association shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the
fullest extent permitted under law against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action,
suite or proceeding in which he may be involved by reason of his having
been a director or officer of the Association (whether or not he continues
to be a directors or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited
to, judgment, court costs and attorneys' fees and the cost of reasonable
settlements.
22. SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.
The Association and the Company 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
Association or the Company, expressly and unconditionally to assume and
agree to perform the Association's or the Company's obligations under this
Agreement, in the same manner and to the same extent that the Association
or the Company would be required to perform if no such succession or
assignment had taken place.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer or director of the Association and
the Company, and Executive has signed this Agreement, all on the day of ,
20 .
KLAMATH FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION
BY:
Kermit K. Houser, President
KLAMATH FIRST BANCORP, INC.
BY:____________________________
Kermit K. Houser, President
WITNESS:
______________________ _____________________________
James E. Essany
EXHIBIT 10(i)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of October 1, 2002, by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"), Klamath
Falls, Oregon; KLAMATH FIRST BANCORP, INC. (the "Company"), an Oregon
corporation; and Nina G. Drake (the "Executive").
WHEREAS, the Association wishes to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.
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.
During the period of her employment hereunder, Executive agrees to serve as
Vice President of the Association. During said period, Executive also agrees to
serve, if elected, as an officer of the Company or any subsidiary or affiliate
of the Company or the Association.
2. TERMS AND DUTIES.
(a) The term of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue for a period of
twenty-four (24) full calendar months thereafter. Commencing on the
first anniversary date, and continuing at each anniversary date
thereafter, the Board of Directors of the Association (the "Board") or
its Compensation Committee may extend the Agreement for an additional
year. Prior to the extension of the Agreement as provided herein, the
Board of Directors of the Association will review the Executive's
performance evaluation for purposes of determining whether to extend
the Agreement, and the results thereof shall be included in the
minutes of the Board's meeting.
(b) During the period of her employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, 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
Association; provided, however, that, with the approval of the Board,
as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors
of, and hold any other offices or positions in, companies or
organizations, which, in such Board's judgment, will not present any
conflict of interest with the Association, or materially affect the
performance of Executive's duties pursuant to this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Sections 1 and 2.
The Association shall pay Executive as compensation a salary of
$90,000 per year ("Base Salary"). Effective December 1, 2002, the Base
Salary shall be calculated at $99,000 per year unless subsequently
changed as provided below. Such Base Salary shall be payable in
accordance with the customary payroll practices of the Association.
During the period of this Agreement, Executive's Base Salary shall be
reviewed at least annually; the first such review will be made no
later than one year from the date of this Agreement. Such review shall
be conducted by the Board or its Compensation Committee, and the Board
may increase Executive's Base Salary. In addition to the Base Salary
provided in this Section 3(a), the Association shall provide Executive
at no cost to Executive with all such other benefits as are provided
uniformly to regular salaried employees of the Association.
(b) The Association will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in
which Executive was participating or otherwise deriving benefit from
immediately prior to the beginning of the term of this Agreement, and
the Association will not, without Executive's prior written consent,
make any changes in such plans, arrangements or perquisites which
would adversely affect Executive's rights or benefits thereunder.
However, changes in Association-sponsored group insurance plan
premiums, deductibles, co-payments, and related coverage limits or
conditions are excluded from the prior sentence for any such change
which is consistently applied to or available to regular salaried
Association employees. Without limiting the generality of the
foregoing provisions of this Subsection (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 plan, medical coverage or any other employee
benefit plan or arrangement made available by the Association 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 incentive compensation and bonuses as provided in any
plan, or pursuant to any arrangement of the Association, in which
Executive is eligible to participate. Nothing paid to the Executive
under any such plan or arrangement will be deemed to be in lieu of
other compensation to which the Executive is entitled under this
Agreement, except as provided under Section 5(e).
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Association shall pay or reimburse Executive for all
reasonable travel and other obligations under this Agreement and may
provide such additional compensation in such form and such amounts as
the Board may from time to time determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the
provisions of this Section shall apply. As used in this Agreement, an
"Event of Termination" shall mean and include any one or more of the
following: (i) the termination by the Association of Executive's
full-time employment hereunder for any reason other than a Change in
Control, as defined in Section 5(a) hereof; disability, as defined in
Section 6(a) hereof; death; retirement, as defined in Section 7
hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
resignation from the Association's employ, upon (A) unless consented
to by the Executive, a material change in Executive's function,
duties, or responsibilities, which change would cause Executive's
position to become one of lesser responsibility, importance, or scope
from the position and attributes thereof described in Sections 1 and
2, above, (any such material change shall be deemed a continuing
breach of this Agreement), (B) a relocation of Executive's principal
place of employment by more than 35 miles from its location at the
effective date of this Agreement, or a material reduction in the
benefits and perquisites to Executive from those being provided as of
the effective date of this Agreement, (C) the liquidation or
dissolution of the Association, or (D) any breach of this Agreement by
the Association. Upon the occurrence of any event described in clauses
(A), (B), (C), or (D), above, Executive shall have the right to elect
to terminate her employment under this Agreement by resignation upon
not less than sixty (60) days prior written notice given within a
reasonable period of time not to exceed, except in case of a
continuing breach, four calendar months after the event giving rise to
said right to elect.
(b) Upon the occurrence of an Event of Termination, the Association shall
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, a sum equal to the
payments due to the Executive for the remaining term of the Agreement,
including Base Salary, bonuses, and any other cash or deferred
compensation paid or to be paid (including the value of employer
contributions that would have been made on the Executive's behalf over
the remaining term of the agreement to any tax-qualified retirement
plan sponsored by the Association as of the Date of Termination), to
the Executive for the term of the Agreement provided, however, that if
the Association is not in compliance with its minimum capital
requirements or if such payments would cause the Association's capital
to be reduced below its minimum capital requirements, such payments
shall be deferred until such time as the Association is in capital
compliance. All payments made pursuant to this Section 4(b) shall be
paid in substantially equal monthly installments over the remaining
term of this Agreement following the Executive's termination;
provided, however, that if the remaining term of the Agreement is less
than one (1) year (determined as of the Executive's Date of
Termination), such payments and benefits shall be paid to the
Executive in a lump sum within 30 days of the Date of Termination.
(c) Upon the occurrence of an Event of Termination, the Association will
cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Association
for Executive prior to her termination. Such coverage shall cease upon
the expiration of the remaining term of this Agreement.
5. CHANGE IN CONTROL.
(a) No benefit shall be paid under this Section 5 unless there shall have
occurred a Change in Control of the Company or the Association. For
purposes of this Agreement, a "Change in Control" of the Company or
the Association shall be deemed to occur if and when (a) an offeror
other than the Company purchases shares of the common stock of the
Company or the Association pursuant to a tender or exchange offer for
such shares, (b) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
or the Association representing 25% or more of the combined voting
power of the Company's then outstanding securities, (c) the membership
of the board of directors of the Company or the Association changes as
the result of a contested election, such that individuals who were
directors at the beginning of any twenty-four month period (whether
commencing before or after the effective date of this Agreement) do
not constitute a majority of the Board at the end of such period, or
(d) shareholders of the Company or the Association approve a merger,
consolidation, sale or disposition of all or substantially all of the
Company's or the Association's assets, or a plan of partial or
complete liquidation.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board of the Association or the
Company has determined that a Change in Control has occurred,
Executive shall be entitled to the benefits provided in paragraphs
(c), (d) and (e) of this Section 5 upon her subsequent involuntary
termination of employment at any time during the term of this
Agreement (or voluntary termination following a Change of Control
following any demotion, loss of title, office or significant
authority, reduction in her annual compensation or benefits, or
relocation of her principal place of employment by more than 35 miles
from its location immediately prior to the Change in Control), unless
such termination is because of her death, retirement as provided in
Section 7, termination for Cause, or termination for Disability.
(c) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association shall 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, a sum equal to 2.99 times the Executive's "base
amount," within the meaning of section 280G(b)(3) of the Internal
Revenue Code of 1986 ("Code"), as amended. Such payment shall be made
in a lump sum paid within ten (10) days of the Executive's Date of
Termination.
(d) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association will cause to be continued
life, medical, dental and disability coverage substantially identical
to the coverage maintained by the Association for Executive prior to
her severance. In addition, Executive shall be entitled to receive the
value of employer contributions that would have been made on the
Executive's behalf over the remaining term of the agreement to any
tax-qualified retirement plan sponsored by the Association as of the
Date of Termination. Such coverage and payments shall cease upon the
expiration of thirty-six (36) months.
(e) Upon the occurrence of a Change in Control, the Executive shall be
entitled to receive benefits due her under, or contributed by the
Company or the Association on her behalf, pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other
employee benefit plan maintained by the Association or the Company on
the Executive's behalf to the extent that such benefits are not
otherwise paid to the Executive upon a Change in Control.
(f) Notwithstanding the preceding paragraphs of this Section 5, in the
event that the aggregate payments or benefits to be made or afforded
to the Executive under this Section would be deemed to include an
"excess parachute payment" under section 280G of the Code, such
payments or benefits shall be payable or provided to Executive over
the minimum period necessary to reduce the present value of such
payments or benefits to an amount which is one dollar ($1.00) less
than three (3) times the Executive's "base amount" under section
280G(b)(3) of the Code.
6. TERMINATION FOR DISABILITY.
(a) If the Executive shall become disabled as defined in the Association's
then current disability plan (or, if no such plan is then in effect,
if the Executive is permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code as determined by a physician
designated by the Board), the Association may terminate Executive's
employment for "Disability."
(b) Upon the Executive's termination of employment for Disability, the
Association will pay Executive, as disability pay, a bi-weekly payment
equal to three-quarters (3/4) of Executive's bi-weekly rate of Base
Salary on the effective date of such termination. These disability
payments shall commence on the effective date of Executive's
termination and will end on the earlier of (i) the date Executive
returns to the full-time employment of the Association in the same
capacity as she was employed prior to her termination for Disability
and pursuant to an employment agreement between Executive and the
Association; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive's
death; or (v) the expiration of the term of this Agreement. The
disability pay shall be reduced by the amount, if any, paid to the
Executive under any plan of the Association providing disability
benefits to the Executive.
(c) The Association will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained
by the Association for Executive prior to her termination for
Disability. This coverage and payments shall cease upon the earlier of
(i) the date Executive returns to the full-time employment of the
Association, in the same capacity as she was employed prior to her
termination for Disability and pursuant to an employment agreement
between Executive and the Association; (ii) Executive's full-time
employment by another employer; (iii) Executive's attaining the age of
65; or (iv) the Executive's death; or (v) the expiration of the term
of this Agreement.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during
which Executive is incapable of performing her duties hereunder by
reason of temporary disability.
7. TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.
Termination by the Association of Executive based on "Retirement" shall
mean retirement at age 65 or in accordance with any retirement arrangement
established with Executive's consent with respect to her. Upon termination
of Executive upon Retirement, Executive shall be entitled to all benefits
under any retirement plan of the Association or the Company and other plans
to which Executive is a party. Upon the death of the Executive during the
term of this Agreement, the Association shall pay to Executive's estate the
compensation due to the Executive through the last day of the calendar
month in which her death occurred.
8. TERMINATION FOR CAUSE.
For purposes of this Agreement, "Termination for Cause" shall include
termination because of the Executive's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
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. In addition,
"Termination for Cause" shall include termination because of continuing or
repeated problems with the Executive's performance or conduct, the
Executive's inattention to duties, the refusal of the Executive to comply
with the Association's or the Company's instructions, policies or rules or
other conduct of the Executive which reflects adversely on the
Association's or the Company 's reputation or operation. For 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 interest of
the Association or its affiliates. Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to her a copy of a resolution duly adopted
by the affirmative vote of not less than three-fourths 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 her, 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 reasons thereof. The Executive
shall not have the right to receive compensation or other benefits for any
period after termination for Cause. Any stock options granted to Executive
under any stock option plan or any unvested awards granted under any other
stock benefit plan of the Association, the Company, or any subsidiary or
affiliate thereof, shall become null and void effective upon Executive's
receipt of Notice of Termination for Cause pursuant to Section 9 hereof,
and shall not be exercisable by Executive at any time subsequent to such
Termination for Cause.
9. REQUIRED PROVISIONS.
(a) The Association may terminate Executive's employment at any time, but
any termination by the Association, other than Termination for Cause,
shall not prejudice Executive's right to compensation or other
benefits under this Agreement. Executive shall not have the right to
receive compensation or other benefits for any period after
Termination for Cause as defined in Section 8 herein.
(b) If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. 1818(e)(3) and (g)(1)), the
Association's obligations under the Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Association 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 that were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(4) or (g)(1)), all obligations of the Association under the
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 Association is in default (as defined in Section 3(x)(1) of the
FDIA), all obligations under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested rights
of the parties.
(e) All obligations under this Agreement shall be terminated (except to
the extent determined that continuation of the Agreement is necessary
for the continued operation of the Association): (i) by the Director
of the Office of Thrift Supervision (the "Director") or his or her
designee at the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide
assistance to or on behalf of the Association under the authority
contained in Section 13(c) of the FDIA or (ii) by the Director, or his
or her designee at the time the Director or such designee approves a
supervisory merger to resolve problems related to operation of the
Association or when the Association 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) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12
U.S.C. section 1828(k) and any regulations promulgated thereunder.
10. NOTICE.
(a) Any purported termination by the Association 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 (which, in the
case of a Termination for Cause, shall not be less than thirty (30)
days from the date such Notice of Termination is given).
(c) If, within thirty (30) 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, except upon
the occurrence of a Change in Control and voluntary termination by the
Executive in which case the Date of Termination shall be the date
specified in the Notice, 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 there from 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, the Association will continue to pay
Executive her full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, Base Salary)
and continue her as a participant in all compensation, benefit and
insurance plans in which she was participating when the notice of
dispute was given, until the dispute is finally resolved in accordance
with this Agreement. Amounts paid under this Section are in addition
to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
11. NON-COMPETITION.
(a) Upon any termination of Executive's employment hereunder pursuant to
an Event of Termination as provided in Section 4 hereof, Executive
agrees not to compete with the Association and/or the Company for a
period of one (1) year following such termination in any city, town or
county in which the Association and/or the Company has an office or
has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination.
Executive agrees that during such period and within said cities, towns
and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other
business activities of the Association and/or the Company. The parties
hereto, recognizing that irreparable injury will result to the
Association and/or the Company, its business and property in the event
of Executive's breach of this Subsection 11(a) agree that in the event
of any such breach by Executive, the Association and/or the Company
will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by
Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive
represents and admits that in the event of the termination of her
employment pursuant to Section 8 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the
Association and/or the Company, and that the enforcement of a remedy
by way of injunction will not prevent Executive from earning a
livelihood. Nothing herein will be construed as prohibiting the
Association and/or the Company from pursuing any other remedies
available to the Association and/or the Company for such breach or
threatened breach, including the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the
Association and affiliates thereof, as it may exist from time to time,
is a valuable, special and unique asset of the business of the
Association. 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 Association or affiliates
thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. 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 Association. In
the event of a breach or threatened breach by the Executive of the
provisions of this Section, the Association will be entitled to an
injunction restraining Executive from disclosing, in whole or in part,
the knowledge of the past, present, planned or considered business
activities of the Association or affiliates thereof, or from rendering
any services to any person, firm, corporation, 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 Association from pursuing any other remedies available
to the Association for such breach or threatened breach, including the
recovery of damages from Executive.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Company, however,
guarantees all payments and the provision of all amounts and benefits due
hereunder to Executive and, if such payments are not timely paid or
provided by the Association, such amounts and benefits shall be paid or
provided by the Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Association or
any predecessor of the Association and Executive, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to the 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 her without reference to
this Agreement.
14. NO ATTACHMENT.
(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 Association, the Company and their respective
successors and assigns.
15. 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 by 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.
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.
18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Oregon, unless
otherwise specified herein; provided, however, that in the event of a
conflict between the terms of this Agreement and any applicable federal or
state law or regulation, the provisions of such law or regulation shall
prevail.
19. ARBITRATION.
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 the Executive
within one hundred (100) miles from the location of the Association, 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 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.
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 Association, if successful pursuant to a legal
judgment, arbitration or settlement.
21. INDEMNIFICATION.
The Association shall provide Executive (including her heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and her heirs, executors and administrators) to the
fullest extent permitted under law against all expenses and liabilities
reasonably incurred by her in connection with or arising out of any action,
suite or proceeding in which she may be involved by reason of her having
been a director or officer of the Association (whether or not she continues
to be a directors or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited
to, judgment, court costs and attorneys' fees and the cost of reasonable
settlements.
22. SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.
The Association and the Company 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
Association or the Company, expressly and unconditionally to assume and
agree to perform the Association's or the Company's obligations under this
Agreement, in the same manner and to the same extent that the Association
or the Company would be required to perform if no such succession or
assignment had taken place.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer or director of the Association and
the Company, and Executive has signed this Agreement, all on the
day of , 20 .
KLAMATH FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION
BY:
Kermit K. Houser, President
KLAMATH FIRST BANCORP, INC.
BY:____________________________
Kermit K. Houser, President
WITNESS:
______________________ _____________________________
Nina G. Drake
EXHIBIT 10(j)
AMENDMENTS TO EMPLOYMENT AGREEMENTS
AMENDMENT #2 TO EMPLOYMENT AGREEMENT
WHEREAS Klamath First Federal Savings and Loan Association and Klamath
First Bancorp, Inc. (collectively "Klamath") entered into an Employment
Agreement (the "Agreement") with Kermit K. Houser (the "Executive") on November
15, 2000; and
WHEREAS, the Board of Directors of Klamath has reviewed the Executive's
performance in connection with Klamath's financial results and an independent
compensation study; and
WHEREAS, Klamath wishes to continue to assure itself of the Executive's
services for the period of the Agreement as amended herein; and
WHEREAS, the Executive is willing to continue serving in the employ of
Klamath on a full-time basis for said period;
NOW, THEREFORE, in consideration of the mutual covenants, terms and
conditions contained in the Agreement and as amended below, the parties hereby
agree that the Agreement is amended as follows:
1. The term of the agreement as outlined in Section 3 is extended for one year
effective November 15, 2002, with the new expiration date being November
14, 2004.
2. This amendment is governed by the laws of the State of Oregon. Except as
specifically modified herein, the Agreement, including all terms,
conditions and covenants, shall remain fully in force.
IN WITNESS WHEREOF, Klamath and the Executive have executed this Amendment
#2 to the Agreement as of November 15, 2002.
Klamath First Federal Savings and
Loan Association
______________________________ By:_______________________________________
Kermit K. Houser Rodney N. Murray, Chairman of the Board
Klamath First Bancorp, Inc.
______________________________ By:_______________________________________
Witness Rodney N. Murray, Chairman of the Board
AMENDMENT #1 TO EMPLOYMENT AGREEMENT
WHEREAS Klamath First Federal Savings and Loan Association and Klamath
First Bancorp, Inc. (collectively "Klamath") entered into an Employment
Agreement (the "Agreement") with Marshall J. Alexander (the "Executive") on
October 1, 2001; and
WHEREAS, the Board of Directors of Klamath has reviewed the Executive's
performance in connection with Klamath's financial results and an independent
compensation study; and
WHEREAS, Klamath wishes to continue to assure itself of the Executive's
services for the period of the Agreement as amended herein; and
WHEREAS, the Executive is willing to continue serving in the employ of
Klamath on a full-time basis for said period;
NOW, THEREFORE, in consideration of the mutual covenants , terms and
conditions contained in the Agreement and as amended below, the parties hereby
agree that the Agreement is amended as follows:
3. The term of the agreement is extended effective October 1, 2002 for an
additional year, with the new expiration date being September 30, 2004,
unless further modified as provided in Section 2.a. of the Agreement.
4. The Base Salary as defined in Section 3 of the Agreement is changed to
$138,000 per year effective November 1, 2002.
5. This amendment is governed by the laws of the State of Oregon. Except as
specifically modified herein, the Agreement, including all terms,
conditions and covenants, shall remain fully in force.
IN WITNESS WHEREOF, Klamath and the Executive have executed this Amendment
#1 to the Agreement as of October 1, 2002.
Klamath First Federal Savings and
Loan Association
______________________________ By:_________________________________
Marshall J. Alexander Kermit K. Houser, President & CEO
Klamath First Bancorp, Inc.
______________________________ By:_________________________________
Witness Kermit K. Houser, President & CEO
AMENDMENT #1 TO EMPLOYMENT AGREEMENT
WHEREAS Klamath First Federal Savings and Loan Association and Klamath
First Bancorp, Inc. (collectively "Klamath") entered into an Employment
Agreement (the "Agreement") with Ben A. Gay (the "Executive") on October 1,
2001; and
WHEREAS, the Board of Directors of Klamath has reviewed the Executive's
performance in connection with Klamath's financial results and an independent
compensation study; and
WHEREAS, Klamath wishes to continue to assure itself of the Executive's
services for the period of the Agreement as amended herein; and
WHEREAS, the Executive is willing to continue serving in the employ of
Klamath on a full-time basis for said period;
NOW, THEREFORE, in consideration of the mutual covenants , terms and
conditions contained in the Agreement and as amended below, the parties hereby
agree that the Agreement is amended as follows:
6. The term of the agreement is extended effective October 1, 2002 for an
additional year, with the new expiration date being September 30, 2004,
unless further modified as provided in Section 2.a. of the Agreement.
7. The Base Salary as defined in Section 3 of the Agreement is changed to
$138,000 per year effective November 1, 2002.
8. This amendment is governed by the laws of the State of Oregon. Except as
specifically modified herein, the Agreement, including all terms,
conditions and covenants, shall remain fully in force.
IN WITNESS WHEREOF, Klamath and the Executive have executed this Amendment
#1 to the Agreement as of October 1, 2002.
Klamath First Federal Savings and
Loan Association
______________________________ By:_________________________________
Ben A. Gay Kermit K. Houser, President & CEO
Klamath First Bancorp, Inc.
______________________________ By:_________________________________
Witness Kermit K. Houser, President & CEO
AMENDMENT #1 TO EMPLOYMENT AGREEMENT
WHEREAS Klamath First Federal Savings and Loan Association and Klamath
First Bancorp, Inc. (collectively "Klamath") entered into an Employment
Agreement (the "Agreement") with Frank X. Hernandez (the "Executive") on October
1, 2001; and
WHEREAS, the Board of Directors of Klamath has reviewed the Executive's
performance in connection with Klamath's financial results and an independent
compensation study; and
WHEREAS, Klamath wishes to continue to assure itself of the Executive's
services for the period of the Agreement as amended herein; and
WHEREAS, the Executive is willing to continue serving in the employ of
Klamath on a full-time basis for said period;
NOW, THEREFORE, in consideration of the mutual covenants , terms and
conditions contained in the Agreement and as amended below, the parties hereby
agree that the Agreement is amended as follows:
9. The term of the agreement is extended effective October 1, 2002 for an
additional year, with the new expiration date being September 30, 2004,
unless further modified as provided in Section 2.a. of the Agreement.
10. The Base Salary as defined in Section 3 of the Agreement is changed to
$108,000 per year effective November 1, 2002.
11. This amendment is governed by the laws of the State of Oregon. Except as
specifically modified herein, the Agreement, including all terms,
conditions and covenants, shall remain fully in force.
IN WITNESS WHEREOF, Klamath and the Executive have executed this Amendment
#1 to the Agreement as of October 1, 2002.
Klamath First Federal Savings and
Loan Association
______________________________ By:_________________________________
Frank X. Hernandez Kermit K. Houser, President & CEO
Klamath First Bancorp, Inc.
______________________________ By:_________________________________
Witness Kermit K. Houser, President & CEO
AMENDMENT #1 TO EMPLOYMENT AGREEMENT
WHEREAS Klamath First Federal Savings and Loan Association and Klamath
First Bancorp, Inc. (collectively "Klamath") entered into an Employment
Agreement (the "Agreement") with Craig M Moore (the "Executive") on October 1,
2001; and
WHEREAS, the Board of Directors of Klamath has reviewed the Executive's
performance in connection with Klamath's financial results and an independent
compensation study; and
WHEREAS, Klamath wishes to continue to assure itself of the Executive's
services for the period of the Agreement as amended herein; and
WHEREAS, the Executive is willing to continue serving in the employ of
Klamath on a full-time basis for said period;
NOW, THEREFORE, in consideration of the mutual covenants , terms and
conditions contained in the Agreement and as amended below, the parties hereby
agree that the Agreement is amended as follows:
12. The term of the agreement is extended effective October 1, 2002 for an
additional year, with the new expiration date being September 30, 2004,
unless further modified as provided in Section 2.a. of the Agreement.
13. The Base Salary as defined in Section 3 of the Agreement is changed to
$117,000 per year effective November 1, 2002.
14. This amendment is governed by the laws of the State of Oregon. Except as
specifically modified herein, the Agreement, including all terms,
conditions and covenants, shall remain fully in force.
IN WITNESS WHEREOF, Klamath and the Executive have executed this Amendment
#1 to the Agreement as of October 1, 2002.
Klamath First Federal Savings and
Loan Association
______________________________ By:_________________________________
Craig M Moore Kermit K. Houser, President & CEO
Klamath First Bancorp, Inc.
______________________________ By:_________________________________
Witness Kermit K. Houser, President & CEO
AMENDMENT #1 TO EMPLOYMENT AGREEMENT
WHEREAS Klamath First Federal Savings and Loan Association and Klamath
First Bancorp, Inc. (collectively "Klamath") entered into an Employment
Agreement (the "Agreement") with M. Isabel Castellanos (the "Executive") on
October 1, 2001; and
WHEREAS, the Board of Directors of Klamath has reviewed the Executive's
performance in connection with Klamath's financial results and an independent
compensation study; and
WHEREAS, Klamath wishes to continue to assure itself of the Executive's
services for the period of the Agreement as amended herein; and
WHEREAS, the Executive is willing to continue serving in the employ of
Klamath on a full-time basis for said period;
NOW, THEREFORE, in consideration of the mutual covenants , terms and
conditions contained in the Agreement and as amended below, the parties hereby
agree that the Agreement is amended as follows:
15. The term of the agreement is extended effective October 1, 2002 for an
additional year, with the new expiration date being September 30, 2004,
unless further modified as provided in Section 2.a. of the Agreement.
16. The Base Salary as defined in Section 3 of the Agreement is changed to
$119,000 per year effective November 1, 2002.
17. This amendment is governed by the laws of the State of Oregon. Except as
specifically modified herein, the Agreement, including all terms,
conditions and covenants, shall remain fully in force.
IN WITNESS WHEREOF, Klamath and the Executive have executed this Amendment
#1 to the Agreement as of October 1, 2002.
Klamath First Federal Savings and
Loan Association
______________________________ By:_________________________________
M. Isabel Castellanos Kermit K. Houser, President & CEO
Klamath First Bancorp, Inc.
______________________________ By:_________________________________
Witness Kermit K. Houser, President & CEO
AMENDMENT #1 TO EMPLOYMENT AGREEMENT
WHEREAS Klamath First Federal Savings and Loan Association and Klamath
First Bancorp, Inc. (collectively "Klamath") entered into an Employment
Agreement (the "Agreement") with Walter F. Dodrill (the "Executive") on January
2, 2002; and
WHEREAS, the Board of Directors of Klamath has reviewed the Executive's
performance in connection with Klamath's financial results and an independent
compensation study; and
WHEREAS, Klamath wishes to continue to assure itself of the Executive's
services for the period of the Agreement as amended herein; and
WHEREAS, the Executive is willing to continue serving in the employ of
Klamath on a full-time basis for said period;
NOW, THEREFORE, in consideration of the mutual covenants , terms and
conditions contained in the Agreement and as amended below, the parties hereby
agree that the Agreement is amended as follows:
18. The term of the agreement is extended effective January 2, 2003 for an
additional year, with the new expiration date being January 1, 2005, unless
further modified as provided in Section 2.a. of the Agreement.
19. The Base Salary as defined in Section 3 of the Agreement is changed to
$119,000 per year effective November 1, 2002.
20. This amendment is governed by the laws of the State of Oregon. Except as
specifically modified herein, the Agreement, including all terms,
conditions and covenants, shall remain fully in force.
IN WITNESS WHEREOF, Klamath and the Executive have executed this Amendment
#1 to the Agreement as of November 1, 2002.
Klamath First Federal Savings and
Loan Association
______________________________ By:_________________________________
Walter F. Dodrill Kermit K. Houser, President & CEO
Klamath First Bancorp, Inc.
______________________________ By:_________________________________
Witness Kermit K. Houser, President & CEO