EXHIBIT 10.1
CB BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT, as amended, is effective as of December 23, 1992 by and
between CB Bancorp, Inc. (the "Holding Company"), a corporation organized under
the laws of Delaware, with its principal administrative office at 126 E. Fourth
Street, Michigan City, Indiana and Joseph F. Heffernan (the "Executive"). Any
reference to "Bank" herein shall mean Community Bank, a Federal Savings Bank or
any successor thereto.
WHEREAS, the Holding Company 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 Holding
Company 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 Chairman of the Board, President and Chief Executive Officer of the
Holding Company. The Executive shall render administrative and management
services to the Holding Company such as are customarily performed by persons in
a similar executive capacity. During said period, Executive also agrees to
serve, if elected, as an officer and director of any subsidiary or affiliate of
the Holding Company. Failure to nominate Executive to the Board of Directors or
failure to reelect Executive as President and Chief Executive Officer of the
Holding Company or Bank shall constitute a breach of this Agreement. Failure to
reelect Executive as a director of the Holding Company shall not constitute a
breach of this Agreement.
2. TERMS.
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months thereafter. Commencing on
the first anniversary date of this Agreement, and continuing at each anniversary
date thereafter, the Agreement shall renew for an additional year such that the
remaining term shall be three (3) years unless written notice is provided to
Executive at least ten (10) days and not more than twenty (20) days prior to any
such anniversary date, that this Agreement shall cease at the end of twenty-four
(24) months following such anniversary date. Prior to the written notice period
for non-renewal, the Board of Directors of the Holding Company ("Board") will
conduct a formal performance evaluation of the Executive for purposes of
determining whether to give such notice under 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 Holding Company and participation in community
and civic organizations; 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 Holding
Company, or materially affect the performance of Executive's duties pursuant to
this Agreement.
(c) In the event that Executive's duties and responsibilities with
respect to the Bank are temporarily or permanently terminated pursuant to
Section 7 or 15 of the Employment Agreement dated December 23, 1992, between
Executive and the Bank ("Bank Agreement") and the course of conduct upon which
such termination is based would not constitute grounds for Termination for Cause
under Section 7 of this Agreement then Executive shall, to the extent
practicable, assume such duties and responsibilities formerly performed at the
Bank as part of his duties and responsibilities as President and Chief Executive
Officer of the Holding Company. Nothing in this provision shall be interpreted
as restricting the Holding Company's right to remove Executive for Cause in
accordance with Section 7 of 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 Section 1 and 2. The
Holding Company shall pay Executive as compensation a salary of not less than
$92,500 per year ("Base Salary"). Such Base Salary shall be payable bi-monthly.
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.
Such increased amount shall then become the "Base Salary" for purposes of this
Agreement. In addition to the Base Salary provided in this Section 3(a), the
Holding Company shall provide Executive at no cost to Executive with all such
other benefits as are provided uniformly to permanent full-time employees of the
Holding Company and the Bank. Base Salary shall include any amounts of
compensation deferred by Executive under a qualified plan maintained by the
Holding Company or the Bank.
(b) The Holding Company 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 Holding Company 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
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under any employee benefit plans including, but not limited to, retirement
plans, supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident plans, medical coverage or any other employee benefit plan
or arrangement made available by the Holding Company 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 of the Holding Company 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.
(c) In addition to the Base Salary provided for by paragraph (a) of
this Section 3, the Holding Company shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by Executive performing
his 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.
(d) In the event that Executive assumes additional duties and
responsibilities pursuant to Section 2(c) of this Agreement by reason of one of
the circumstances contained in Section 2(c) of this Agreement, and the Executive
receives or will receive less than the full amount of compensation and benefits
formerly entitled to him under the Bank Agreement, the Holding Company shall
assume the obligation to provide Executive with his compensation and benefits in
accordance with the Bank Agreement less any compensation and benefits received
from the Bank, subject to the terms and conditions of this Agreement including
the termination for cause provisions in Section 7.
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 Holding Company of Executive's full-time employment hereunder
for any reason other than a Change in Control, as defined in Section 5(a)
hereof, upon Retirement, as defined in Section 6 hereof or for Cause, as defined
in Section 7 hereof; (ii) unless consented to by the Executive, Executive's
resignation from the Holding Company's employ, upon any: (A) failure to nominate
Executive as director or failure to elect or re-elect or appoint or reappoint
Executive as President and Chief Executive Officer, (B) 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 Section 1, above, (and any such
change shall be deemed a continuing breach of this Agreement), (C) relocation of
Executive's principal place of employment by more than 30 miles from its
location at the effective date of this Agreement, or a material reduction in the
benefits and perquisites to the Executive from those being provided as of the
effective date of this Agreement, (D) liquidation or dissolution of the Bank or
Holding Company or (E) breach of this Agreement by the Holding Company. Upon
the occurrence of any event described in clauses (A),
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(B), (C), (D) or (E) 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 Holding Company
shall be obligated to 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
for the remaining term of the agreement including Base Salary, bonuses and any
other cash or deferred compensation paid, or to be paid, to the Executive, and
the amount of any benefits received pursuant to any employee benefit plans
maintained by the Bank or the Holding Company for the term of the Agreement. At
the election of the Executive, which election is to be made within thirty (30)
days of the Date of Termination, such payments shall be made in a lump sum or
paid monthly during the remaining term of the agreement following the
Executive's termination. In the event that no election is made, payment to the
Executive will be made on a monthly basis during the remaining term of the
Agreement. Such payments shall not be reduced in the event the Executive obtains
other employment following termination of employment.
(c) Upon the occurrence of an Event of Termination, the Holding Company
will cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Bank or the Holding
Company for Executive prior to his termination, except to the extent such
coverage may be changed in its application to all Bank employees. Such coverage
shall cease upon the expiration of the remaining term of this Agreement.
(d) In the event that the Executive is receiving monthly payments
pursuant to Section 4(b) hereof, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, Executive shall elect whether,
the balance of the amount payable under the Agreement at that time shall be paid
in a lump sum or on a pro rata basis. Such election shall be irrevocable for the
year for which such election is made.
5. CHANGE IN CONTROL.
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Bank or the Holding Company as set forth
below. For purposes of this Plan, a "Change in Control" of the Bank or Company
shall mean an event of a nature that: (i) would be required to be reported in
response to Item 1(a) of the current report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act"); or (ii) results in a Change in Control of the Bank or
the Holding Company within the meaning of the Home Owners' Loan Act of 1933 and
the Rules and Regulations promulgated by the Office of Thrift Supervision (or
its predecessor agency), as in effect on the date hereof (provided, that in
applying the definition of change in control as set forth under the rules and
regulations of the OTS, the Board shall substitute its judgment for that of the
OTS); or (iii) without limitation such a Change in Control shall be deemed
to have
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occurred at such time as (A) any "person" (as the term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank or the Holding Company representing 20% or
more of the Bank's or the Holding Company's outstanding securities except for
any securities of the Bank purchased by the Holding Company in connection with
the conversion of the Bank to the stock form and any securities purchased by the
Bank's employee stock ownership plan and trust; or (B) individuals who
constitute the Board on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Holding Company's stockholders
was approved by the same Nominating Committee serving under an Incumbent Board,
shall be, for purposes of this clause (B), considered as though he were a member
of the Incumbent Board; or (C) a plan of reorganization, merger, consolidation,
sale of all or substantially all the assets of the Bank or the Holding Company
or similar transaction is approved by the Incumbent Board and the shareholders,
or otherwise occurs upon which the Board so notifies the OTS of such occurrence,
and in which the Bank or Holding Company is not the surviving institution; or
(D) a proxy statement shall be distributed soliciting proxies from stockholders
of the Holding Company, by someone other than the current management of the
Holding Company, seeking stockholder approval of a plan of reorganization,
merger or consolidation of the Holding Company or Bank with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Bank or the
Holding Company; or (E) a tender offer is made for 20% or more of the voting
securities of the Bank or Holding Company then outstanding.
(b) If any of the events described in Section 5(a) hereof constituting
a Change in Control have occurred or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d), (e), and (f) of this Section 5 upon his subsequent
termination of employment at any time during the term of this Agreement
(regardless of whether such termination results from his dismissal or his
resignation at any time during the term of this Agreement following any
demotion, loss of title, office or significant authority or responsibility,
reduction in the annual compensation or benefits or relocation of his principal
place of employment by more than 30 miles from its location immediately prior to
the change in control), unless such termination is because of his death, or
termination for Cause.
(c) Upon the occurrence of a Change in Control followed by the
Executive's termination of employment, the Holding Company 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 greater of the payments due for the remaining term of the
Agreement or three (3) times the average of the three (3) preceding years' Base
Salary, including bonuses and any other cash or deferred compensation paid, or
to be paid, to the Executive during such years, and the amount of any
contributions made to any employee benefit plans, on behalf of the Executive,
maintained by the Bank or the Holding Company
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during such years, except to the extent such benefits are otherwise payable
to Executive under such plans upon a Change in Control. At the election of the
Executive, which election is to be made within thirty (30) days of the Date of
Termination following a Change in Control, such payment may be made in a lump
sum or paid in equal monthly installments during the thirty-six (36) months
following the Executive's termination. In the event that no election is made,
payment to the Executive will be made on a monthly basis during the remaining
term of the Agreement.
(d) Upon the occurrence of a Change in Control followed by the
Executive's termination of employment, the Holding Company will cause to be
continued life, medical, dental and disability coverage substantially identical
to the coverage maintained by the Bank for Executive prior to his severance.
Such coverage and payments shall cease upon the expiration of thirty-six (36)
months.
(e) In the event that the Executive is receiving monthly payments
pursuant to Section 5(c) hereof, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, Executive shall elect whether
the balance of the amount payable under the Agreement at that time shall be paid
in a lump sum or on a pro rata basis pursuant to such section. Such election
shall be irrevocable for the year for which such election is made.
(f) Notwithstanding the preceding paragraphs of this Section 5, in the
event that the aggregate payments or benefits to be made or afforded to
Executive, which are deemed to be parachute payments as defined in Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code") or any successor
thereof, (the "Termination Benefits") would be deemed to include an "excess
parachute payment" under Section 280G of the Code, then upon the Executive's
entitlement to benefits under Section 5 hereof, the Holding Company shall pay to
the Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, an amount equal to the total
of all the federal excise taxes imposed on the Executive under section 4999 of
the Code; plus (ii) an amount equal to any federal and state income taxes owed
by the Executive with respect to any payments or benefits due on the Termination
Benefits. Notwithstanding the preceding, no benefits shall be payable by the
Holding Company with respect to any excise tax imposed under Section 4999 of the
Code on the amounts paid under this paragraph.
6. TERMINATION UPON RETIREMENT.
Termination by the Holding Company of the Executive based on
"Retirement" shall mean termination in accordance with the Holding Company's or
Bank's retirement policy 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 Holding Company or the Bank and other plans to which
Executive is a party.
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7. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of the
Executive's intentional failure to perform stated duties, personal dishonesty
which results in material loss to the Holding Company or one of its affiliates,
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses) or final cease and desist order which results in material loss
to the Holding Company or one of its affiliates or any material breach 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 Holding Company 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 Notice of Termination
which shall include 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 particulars thereof
in detail. The Executive shall not have the right to receive compensation or
other benefits for any period after termination for Cause. Any stock options and
related limited rights granted to Executive under any stock option plan, or any
unvested awards granted to Executive under any other stock benefit plan of the
Bank, the Holding 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 or delivered
to Executive at any time subsequent to such Termination for Cause.
8. NOTICE.
(a) Any purported termination by the Holding Company 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 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
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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 Company 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.
9. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice, furnish such information
and assistance to the Holding Company as may reasonably be required by the
Holding Company in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party.
10. 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 Bank and/or the Holding Company for a period of one (1) year
following such termination in any city, town or county in which the Bank and/or
the Holding 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, except as agreed to pursuant to a resolution duly adopted by the
Board. 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 Bank and/or the
Holding Company. The parties hereto, recognizing that irreparable injury will
result to the Bank and/or the Holding Company, its business and property in the
event of Executive's breach of this Subsection 10(a) agree that in the event of
any such breach by Executive, the Bank and/or the Holding 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 7 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 Bank and/or the Holding
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
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as prohibiting the Bank and/or the Holding Company from pursuing any other
remedies available to the Bank and/or the Holding 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 Holding Company and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Bank. 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 Bank 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
Holding Company. In the event of a breach or threatened breach by the Executive
of the provisions of this Section, the Holding Company 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
Holding Company 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 Holding Company from pursuing any other remedies
available to the Holding Company for such breach or threatened breach, including
the recovery of damages from Executive.
11. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Holding Company.
12. 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 Holding Company
or any predecessor of the Holding Company 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.
13. EFFECT OF ACTION UNDER BANK AGREEMENT.
Notwithstanding any provision herein to the contrary, to the extent
that compensation payments and benefits are paid to or received by Executive
under the Employment Agreement dated as of December 23, 1992, between Executive
and the Bank, such compensation payments and benefits paid by the Bank will be
deemed to satisfy the corresponding obligations of the Holding Company under
similar provisions of this Agreement.
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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 and the Holding 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 Indiana,
unless otherwise specified herein.
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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
fifty (50) miles from the location of the Bank, 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.
In the event any dispute or controversy arising under or in connection
with Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of all back-pay, including salary, bonuses and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under 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 Holding Company, if Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.
21. INDEMNIFICATION.
The Holding Company 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 Delaware law against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action, suit
or proceeding in which he may be involved by reason of his having been a
director or officer of the Holding Company (whether or not he continues to be a
director or officer at the time of incurring such expenses or liabilities), such
expenses and liabilities to include, but not be limited to, judgments, court
costs and attorneys' fees and the cost of reasonable settlements.
22. SUCCESSOR TO THE HOLDING COMPANY.
The Holding 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 Bank or the Holding Company,
expressly and unconditionally to assume and agree to perform the Holding
Company's obligations under this Agreement, in the same manner and to the same
extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
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SIGNATURES
IN WITNESS WHEREOF, CB Bancorp, Inc. has caused this Agreement to be
executed and its seal to be affixed hereunto by its duly authorized officer and
Executive has signed this Agreement, on the 27th day of November, 1996.
ATTEST: CB BANCORP, INC.
________________________ BY:________________________________
Secretary Duly Authorized Officer
[SEAL]
WITNESS:
________________________ BY:________________________________
Joseph F. Heffernan
Executive
CONFORMED
SIGNATURES
IN WITNESS WHEREOF, CB Bancorp, Inc. has caused this Agreement to be
executed and its seal to be affixed hereunto by its duly authorized officer and
Executive has signed this Agreement, on the 27th day of November, 1996.
ATTEST: CB BANCORP, INC.
/s/ Allen E. Jones BY: /s/ George L. Koehm
____________________________ _____________________________
Allen E. Jones George L. Koehm
Secretary Duly Authorized Officer
[SEAL]
WITNESS:
/s/ Carlyne E. Graves BY: /s/ Joseph F. Heffernan
____________________________ _____________________________
Carlyne E. Graves Joseph F. Heffernan
Executive