Exhibit 10.2 Employment Agreement between ARGO Bancorp, Inc. and Frances
Pitts
ARGO FEDERAL SAVINGS BANK, FSB
EMPLOYMENT AGREEMENT
AS AMENDED AND RESTATED
This AGREEMENT is made effective as of November 1, 1996, by and among
Argo Federal Savings Bank, FSB (the "Institution" or "Bank"), a federally
chartered savings institution, with its principal administrative office at
7600 West 63rd Street, Summit, Illinois 60501, Argo Bancorp, Inc., a
corporation organized under the laws of the State of Delaware, the holding
company for the Institution (the "Holding Company"), and Frances M. Pitts
("Executive").
WHEREAS, the Institution wishes to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Institution
on a permanent 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 Executive's employment hereunder, Executive agrees
to serve as Senior Vice President and General Counsel of the Institution.
Executive shall render administrative and management services to the
Institution such as are customarily performed by persons situated in a
similar executive capacity. During said period, Executive also agrees to
serve, if elected, as an officer and director of the Holding Company or any
subsidiary of the Institution.
2. TERMS AND DUTIES.
(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) calendar months thereafter. Commencing on the
first anniversary date of this Agreement, and continuing on each anniversary
thereafter, the disinterested members of the board of directors of the
Institution ("Board") may extend the Agreement an additional year such that
the remaining term of the Agreement shall be three years, unless the
Executive elects not to extend the term of this Agreement by giving written
notice in accordance with Section 9 of this Agreement. The Board will review
the Agreement and Executive's performance annually for purposes of
determining whether to extend the Agreement and the rationale and results
thereof shall be included in the minutes of the Board's meeting. The Board
shall give notice to the Executive as soon as possible after such review as
to whether the Agreement is to be extended.
(b) During the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote such amounts of her
business time, attention, skill, and efforts reasonably
required for the faithful performance of her duties hereunder including
activities and services related to the organization, operation and management
of the Institution and participation in the community and civic
organizations; provided, however, that, with the approval of the Board, as
evidence 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
Institution, or materially affect the performance of Executive's duties
pursuant to this Agreement.
(c) Notwithstanding anything herein to the contrary, Executive's
employment with the Institution may be terminated by the Institution or the
Executive during the term of this Agreement, subject to the terms and
conditions of this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The Institution shall pay Executive as compensation a salary of not
less than $98,000.00 per year ("Base Salary"). Base Salary shall include any
amounts of compensation deferred by Executive under any qualified or
nonqualified plan maintained by the Institution. Such Base Salary shall be
payable bi-weekly. 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 by a Committee of the Board, delegated
such responsibility by the Board. The Committee of the board may increase
Executive's Base Salary. Any increase in Base Salary shall become the "Base
Salary" for purposes of this Agreement. In addition to the Base Salary
provided in this Section 3(a), the Institution shall also provide Executive,
at no cost to Executive, with all such other benefits as are provided
uniformly to permanent full-time employees of the Institution.
(b) The Executive shall be entitled to participate in any employee
benefit plans ("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 Institution will not, without Executive's prior written
consent, make any changes in such plans, arrangements or perquisites which
would materially adversely affect Executive's rights or benefits thereunder;
provided, however, that the Bank may make such changes to such plans,
arrangements or perquisites generally provided to all Institution employees
on a non-discriminatory basis. The Bank may acquire "Key Man" insurance on
Executive upon such terms and conditions as may be determined from time to
time by the Bank. Upon an Event of Termination as defined below, the Bank
shall transfer all "Key Man" life insurance, if any is owned by the Bank, to
Executive. Without limiting the generality of the foregoing provisions of
this Subsection (b), Executive shall be entitled to participate in or receive
benefits under any Benefit Plans including but not limited to, stock grants,
restricted stock, stock options (and other option derived benefits), Employee
Stock Ownership Plans ("ESOP"), or any other stock-based benefit plan,
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 Institution
in the future to its senior executives and key management employees with
awards, grants, levels and benefits for Executive equal at least to levels
customary in the industry for persons of like title, authority and
responsibility as Executive and with levels of Executive's past participation
in the Benefit Plans of the Bank, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans and
arrangements. Executive shall be entitled to incentive compensation and
bonuses as provided in any plan of the Institution 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 and other compensation provided for by paragraph (b) of this
Section 3, the Institution shall pay or reimburse Executive for all travel,
entertainment and other reasonable expenses incurred in the performance of
Executive's 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 addition to Executive's Base Salary as provided in paragraph (a)
of this Section 3 and any incentive compensation or discretionary bonus
otherwise paid or payable to other senior executives or to Executive
exclusively, the Bank shall annually award a Fixed Incentive Award to
Executive in an amount equal to one percent (1%) of the Bank's pre-tax profit
on an unconsolidated basis. The Fixed Incentive Award shall be paid to
Executive or her designated beneficiary upon the earlier of (i) the
termination by the Bank of his employment for other than Termination for
Cause; (ii) the expiration of this Agreement; (iii) her death or Disability;
or (iv) annually upon the anniversary of this Agreement. In the event
Executive is subject to Termination for Cause or voluntarily terminates her
employment, other than upon an Event of Termination as defined below,
Executive shall forfeit all rights to the Fixed Incentive Award provided
under this paragraph.
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 Institution or the Holding Company of Executive's
full-time employment hereunder for any reason other than a termination
governed by Section 5(a), for Disability, as defined in Section 7 hereof, or
Termination for Cause, as defined in Section 8 hereof; (ii) Executive's
resignation from the Institution's employ upon any (A) failure to elect or
reelect or to appoint or reappoint Executive as Senior Vice President and
General Counsel, unless consented to by the Executive, (B) 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
Section 1, above, unless consented to by Executive, (C) a relocation of
Executive's principal place of employment by more than thirty (30) miles from
its location at the effective date of this Agreement, unless consented to by
the Executive, (D) a material reduction in the benefits and perquisites to
the Executive from those being provided as of the effective date of this
Agreement, unless consented to by the Executive, or (E) a liquidation or
dissolution of the Institution or Holding Company, or (F) breach of this
Agreement by the Institution. Upon the occurrence of any event described in
clauses (A), (B), (C), (D), (E) or (F), above, Executive
shall have the right to elect to terminate her employment under this
Agreement by resignation upon not less than thirty (30) days prior written
notice given within a reasonable period of time not to exceed, except in the
case of a continuing breach, four (4) calendar months after the event giving
rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, the Bank shall be
obligated to pay Executive, or, in the event of her subsequent death, her
beneficiary or beneficiaries, or her estate, as the case may be, the
following payments and benefits:
(i) Base Salary for the remaining term of the Agreement which shall
be the highest annual Base Salary paid prior to Executive's termination
of employment with the Holding Company or Bank, and which shall be
increased annually during the remaining term of the Agreement at a rate
of 4% per year ("Adjusted Base Salary").
(ii) Bonuses, the Fixed Incentive Award and other incentive
payments for the remaining term of the Agreement which shall be
calculated as the highest percentage of Base Salary, such bonuses and
incentive payments represented prior to Executive's termination of
employment with the Holding Company or Bank multiplied by the Adjusted
Base Salary each year during the remaining term of the Agreement
("Adjusted Bonus").
(iii) Continuation for the remaining term of the Agreement of
Executive's and Executive's dependents' participation in any life,
medical, health, disability, dental insurance or any other "welfare
plan" (as such is defined in Section 3 (1) of the Employee Retirement
Security Act of 1974 as amended from time to time ("ERISA") in which
Executive participates in on the day prior to the effective date of this
Agreement (each being a "Welfare Plan"), subject to the same premium
contributions on the part of Executive as were required immediately prior
to the Event of Termination.
(iv) A benefit equal to the product of (i) the highest annual
allocation of ESOP shares Executive had previously received under the
ESOP and (ii) the lesser of (x) the remaining number of years remaining
in the term of the Agreement or (y) the number of annual allocations
scheduled to be made under the ESOP immediately prior to the Event of
Termination.
(v) A benefit equal to the (i) additional employer contributions
and (ii) net return on all contributions, to which Executive would have
been entitled during the remaining term of the Agreement under any other
qualified or non-qualified defined contribution plan offered by the
Holding Company or the Bank assuming that Executive was 100% vested,
Executive made the maximum allowable contributions or deferrals under such
plans, Executive's compensation reflected Adjusted Base Salary and
Adjusted Bonus and assuming the crediting of interest on contributions
being equal to the return provided during the five (5) year period
immediately preceding the Event of Termination.
(vi) A benefit equal to the difference between (i) the benefits
under any qualified or non-qualified pension plan (as defined in Section 3
(2)(A) of ERISA) which she would have earned or accrued during the
remaining term of the Agreement assuming such benefit was vested and is
calculated using Adjusted Base Salary and Adjusted Bonus as appropriate in
the formula for Accrued Benefit under the plans and assuming such benefit
was calculated without making any reduction in the Accrued Benefit due to
the benefit being provided prior to the normal retirement age as set out
in the pension plan and (ii) the accrued benefit Executive is vested in
at the time of the Event of Termination.
(vii) A benefit under any non-qualified Supplemental Executive
Retirement Plan ("SERP") maintained by the Holding Company or the Bank
which Executive would have earned each year within the remaining term of
the Agreement, using compensation values which take into account
Adjusted Base Salary and Adjusted Bonus and further assuming that the
qualified plans to which the SERP refers provide the benefits generally
provided to Executive under their terms during the five year period
immediately prior to the Event of Termination, the limitations on
compensation and benefits under the Code remained fixed at their levels
as of the time of the Event of Termination, and the ESOP continued to
allocate unallocated shares according to its loan amortization schedule
in place on the last day of the ESOP Plan Year immediately prior to the
Event of Termination up to the point at which the ESOP would be fully
allocated;
(viii) The benefit (net of deferrals) which would have been earned
each year of the remaining term of the Agreement under an other
non-qualified deferred compensation arrangements offered by the Holding
Company or the Bank calculated using compensation values which take into
account Adjusted Base Salary and Adjusted Bonus and which assume a
percentage of deferred compensation equal to the highest percentage of
compensation actually deferred during the five (5) year period
immediately preceding the Event of Termination and assuming the
crediting of interest on deferred monies equal to the return provided
during the five (5) year period immediately preceding the Event of
Termination;
(ix) A benefit consisting of the award, allocation or grant of
stock, restricted stock, stock options or any other stock or stock-related
benefit which would have been made to Executive under any and all stock
based qualified or non-qualified compensation plans or arrangements
offered by Holding Company or the Bank immediately prior to or during the
term of the Agreement at either (A) the highest level of award possible
for Executive under the terms of plans which provide awards based upon
levels of individual or group or institutional performance goals, or
(B) if awards are made at the discretion of the Holding Company or Bank,
then at a level consistent with awards made in the industry for persons
of similar title, authority and responsibility and Executive's past level
of benefit under such plans. Such award, allocation or grant as provided
herein shall be deemed 100% vested immediately.
(x) Any award of stock options (or option derived benefits) to
Executive which have been made under a stock option plan or the stock
option feature of a broader compensation plan which have not already
vested shall be made fully vested and further, at the election of
Executive, any stock options shall be subsequently cancelled by
Executive in consideration for a payment from the Holding Company in an
amount equal to the product of (i) the number of stock options cancelled
and (ii) the difference between (x) the fair market value (at the time
of cancellation) of the stock upon which the option was issued and (y)
the exercise price of the stock option;
(xi) Any award of restricted stock or a stock grant (or award and
grant derived benefits) to Executive which have been made under a stock
grant plan or feature of a broader compensation plan which have not
already vested shall be made fully vested and further, at the election
of Executive, any stock awarded under such a plan shall at the election
of Executive be subject to a put option entitling Executive to sell all
or some portion of such stock to the Holding Company at the then fair
market value.
(xii) For the purpose of calculating benefits to be provided during
the remaining term of the Agreement, benefits shall be provided in the
form and calculated as described above. In the event that a benefit
otherwise payable in stock form cannot be provided in stock, such benefit
will be provided in the form of cash using the greater of the fair market
value of the stock at the time of the distribution of the benefit or the
closing price of the stock on the day prior to the time of distribution
or the last day of trading prior to the time of distribution.
(c) At the election of the Executive, which election is to be made
prior to an Event of Termination, such payments shall be made in a lump sum.
In the event that no election is made, payment to Executive will be made on a
bi-weekly basis in approximately equal installments 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.
(d) No payments pursuant to this subsection shall, in the aggregate,
exceed three times Executive's average annual compensation for the five most
recent taxable years that Executive has been employed by the Institution or
such lesser number of years in the event that Executive shall have been
employed by the Institution for less than five years. For purposes of this
subsection 4(b), "average annual compensation" shall be the average annual
compensation as defined in Section 5(c) of this Agreement. In the event the
Institution is not in compliance with its minimum capital requirements or if
such payments pursuant to this subsection (b) would cause the Institution's
capital to be reduced below its minimum regulatory capital requirements, such
payments shall be deferred until such time as the Institution or successor
thereto is in capital compliance.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the
Institution or Holding Company shall mean an event of a nature that: (i)
would be required to be reported in response to Item 1 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, as amended (the "Exchange Act"); or
(ii) results in a Change in Control of the Institution or the Holding Company
within the meaning of the Home Owners' Loan Act of 1933, as amended, the
Federal Deposit Insurance Act and the Rules and Regulations promulgated by
the Office of Thrift Supervision
("OTS") (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 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 voting securities of the Institution or the
Holding Company representing 20% or more of the Institution's or the Holding
Company's outstanding voting securities or right to acquire such securities
except for any voting securities of the Institution purchased by the Holding
Company and any voting securities purchased by any Benefit Plan of the
Institution or the Holding Company, 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 Institution
or the Holding Company or similar transaction occurs in which the Institution
or Holding Company is not the resulting entity; provided, however, that such
an event listed above will be deemed to have occurred or to have been
effectuated upon the receipt of all required regulatory approvals not
including the lapse of any statutory waiting periods.
(b) If a Change in Control has occurred pursuant to Section 5(a) or the
Board has determined that a Change in Control has occurred, Executive shall
be entitled to the benefits provided in paragraphs (c), and (d) of this
Section 5 upon her subsequent termination of employment at any time during
the term of this Agreement due to: (1) Executive's dismissal or (2)
Executive's voluntary resignation following any demotion, loss of title,
office or significant authority or responsibility, reduction in annual
compensation or material reduction in benefits or relocation of her principal
place of employment by more than thirty (30) miles from its location
immediately prior to the Change in Control, unless such termination is
because of her death or Termination for Cause, provided, however, that such
payments shall be reduced by any payment made under Section 4 of this
Agreement.
(c) Upon Executive's entitlement to benefits pursuant to Section 5(b),
the Institution shall pay Executive, or in the event of her subsequent death,
her beneficiary or beneficiaries, or her estate, as the case may be, a sum
equal to the greater of: (1) the payments due for the remaining term of the
Agreement; or 2) three (3) times Executive's average annual compensation for
the five (5) most recent taxable years that Executive has been employed by
the Institution or such lesser number of years in the event that Executive
shall have been employed by the Institution for less than five (5) years;
PROVIDED HOWEVER, that no payments pursuant to this subsection shall exceed
three (3) times the Executive's average annual compensation for the five (5)
most recent taxable years that the Executive has been employed by the
Institution or such lesser number of years in the event the Executive shall
have been employed by the Institution for less than five (5) years. For
purposes of this Agreement, such average annual compensation shall include
Base Salary, commissions, bonuses (including the Fixed Incentive Award),
contributions on Executive's behalf to any pension and/or profit sharing
plan, severance payments, retirement payments, directors or committee fees,
fringe benefits, and payment of expense items without accountability or
business purpose or that do not meet the IRS requirements for deductibility
by the Institution. In the event the Institution is not in compliance with
its minimum capital requirements or if such payments would cause the
Institution's capital to be reduced below its minimum regulatory capital
requirements, such payments shall be deferred until such time as the
Institution or successor thereto is in capital compliance. At the election of
the Executive, which election is to be made prior to a Change in Control,
such payment may be made in a lump sum. In the event that no election is
made, payment to the Executive will be made on a bi-weekly basis in
approximately equal installments over a period of thirty-six (36) months
following the Executive's termination. Such payments shall not be reduced in
the event Executive obtains other employment following termination of
employment.
(d) Upon the Executive's entitlement to benefits pursuant to Section
5(b), the Institution will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
Institution for Executive and her dependents prior to her severance at no
premium cost to the Executive, except to the extent that such coverage may be
changed in its application for all Institution employees on a
non-discriminatory basis. Such coverage and payments shall cease upon the
expiration of thirty-six (36) months following the Date of Termination.
(e) In the event that the Executive is receiving bi-weekly 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.
6. CHANGE OF CONTROL RELATED PROVISIONS
Notwithstanding the paragraphs of Section 5, in no event shall the
aggregate payments or benefits to be made or afforded to Executive under said
paragraphs (the "Termination Benefits") constitute an "excess parachute
payment" under Section 280G of the Code or any successor thereto, and in
order to avoid such a result, Termination Benefits will be reduced, if
necessary, to an amount (the "Non-Triggering Amount"), the value of which
is one dollar ($1.00) less than amount equal to three (3) times Executive's
"base amount", as determined in accordance with said Section 280G. The
allocation of the reduction required hereby among the Termination Benefits
provided by Section 5 shall be determined by Executive.
7. TERMINATION FOR DISABILITY
(a) If, as a result of Executive's incapacity due to physical or mental
illness, such incapacity being determined by a doctor selected by the Bank,
she shall have been absent from her duties with the Bank on a full-time basis
for six (6) consecutive months, and within thirty (30) days after written
notice of potential termination is given she shall not have returned to the
full-time performance of her duties, the Bank may terminate Executive's
employment for "Disability."
(b) The Bank will pay Executive, as disability pay, a bi-weekly payment
equal to one hundred percent (100%) 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 Bank in the same capacity as she was employed prior to her termination
for Disability and pursuant to an employment agreement between Executive and
the Bank; (ii) Executive's full-time employment by another employer; (iii)
Executive attaining the normal age of retirement or receiving benefits under
any Defined Benefit Plan of the Bank; (iv) Executive's death; or (v) the
expiration of the term of this Agreement. Notwithstanding any other
provisions to the contrary, the Bank may apply any proceeds from disability
income insurance for Executive which was paid for by the Bank or Holding
Company as partial satisfaction of the Bank's obligations under this Section.
(c) The Bank will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
Bank for Executive and her dependants 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 Bank, in the
same capacity as he was employed prior to her termination for Disability and
pursuant to an employment agreement between Executive and the Bank; (ii)
Executive's full-time employment by another employer; (iii) Executive's
attaining the normal age of retirement or receiving benefits under any
Defined Benefit Plan of the Bank; (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 which Executive
is incapable of performing her duties hereunder by reason of temporary
disability.
8. TERMINATION FOR CAUSE.
(a) The term "Termination for Cause" shall mean termination because of
Executive's personal dishonesty, incompetence, willful misconduct, any 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. 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 Notice of
Termination which shall include a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the members of the Board at a
meeting of the Board called and held for that purpose (after reasonable
notice to Executive and an opportunity for him, together with counsel, to be
heard before the Board), finding that in the good faith option of the Board,
Executive was guilty of conduct justifying Termination for Cause and
specifying the particulars thereof in detail. Except as provided in Section
8(b) hereof, Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause except for
compensation and benefits already vested. During the period beginning on the
date of the Notice of Termination for Cause pursuant to Section 9 hereof
through the Date of Termination, stock options and related limited rights
granted to Executive under any stock option plan shall not be exercisable nor
shall any unvested awards granted to
Executive under any stock benefit plan of the Institution, the Holding
Company or any subsidiary or affiliate thereof vest. At the Date of
Termination, such stock options and related limited rights and such unvested
awards shall become null and void and shall not be exercisable by or
delivered to Executive at any time subsequent to such Date of Termination for
Cause.
(b) If, within thirty (30) days after Notice of Termination for Cause
is received by Executive, the Executive notifies the Bank that a dispute
exists concerning the termination ("Notice of Dispute"), the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal
having been perfected) and provided further that the Date of Termination
shall be extended by a Notice of Dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such dispute
with reasonable diligence. In the event the Executive pursues resolution of
such dispute through arbitration in accordance with the rules of the American
Arbitration Association then in effect, the Bank will continue to pay
Executive his Base Salary in effect when the Notice of Dispute notice giving
rise to the dispute was given until the earlier of: 1) the resolution of the
dispute pursuant to arbitration in accordance with this Agreement or 2) six
months from the Date of Termination as specified in the Notice of Termination
for Cause.
9. NOTICE
(a) Any purported termination by the Institution 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 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, the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal
having been perfected) and provided further that the Date of Termination
shall be extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such dispute
with reasonable diligence. Notwithstanding the pendency of any such dispute,
the Bank 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 the Executive shall continue 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 under this Agreement.
(d) The Bank may terminate the Executive's employment at any time, but
any termination by the Bank, other than Termination for Cause, shall not
prejudice Executive's right to compensation or other benefits under this
Agreement or under any other benefit or compensation plans or programs
maintained by the Bank from time to time. Executive shall not have the right
to receive compensation or other benefits for any period after Termination for
Cause as defined in Section 8 hereinabove.
10. 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 10
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 Bank as may reasonably be required by the Bank in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party. The Bank will reimburse the Executive
for reasonable costs incurred by the Executive in connection with furnishing
such information and assistance to the Bank.
11. CONFIDENTIALITY
Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Institution and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Institution. 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 Institution
or affiliates thereof to any person, firm, corporation, or other entity for
any reason or purpose whatsoever, unless expressly authorized by the Board of
Directors or required by law. Notwithstanding the foregoing, Executive may
disclose any knowledge of legal, banking, financial and/or economic
principles, concepts or ideas which are not solely and exclusively derived
from the business plans and activities of the Institution. In the event of a
breach or threatened breach by Executive of the provisions of this Section,
the Institution 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 Institution 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 Institution from pursuing any other remedies available to the Institution
for such breach or threatened breach, including the recovery of damages from
Executive.
12. SOURCE OF PAYMENTS.
(a) All payments provided in this Agreement shall be timely paid in cash
or check from the general funds of the Institution. The Holding Company,
however, unconditionally guarantees payment and provision of all amounts and
benefits due hereunder to Executive and, if such amounts and benefits due
from the Institution are not timely paid or provided by the Institution, such
amounts and benefits shall be paid or provided by the Holding Company.
(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement dated November 1, 1996,
between Executive and the Holding Company, except to the extent that Base
Salary is paid by the Holding Company under the Holding Company Agreement
with respect to duties performed pursuant thereto, such compensation payments
and benefits paid by the Holding Company will be subtracted from any amounts
due simultaneously to Executive under similar provisions of this Agreement.
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 Institution
or any predecessor of the Institution and Executive, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to 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 and the Institution 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. REQUIRED PROVISIONS.
(a) The Institution may terminate Executive's employment at any time,
but any termination by the Institution, 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 hereinabove.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Institution's affairs by a notice
served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act,
12 U.S.C. section 1818(e)(3) or (g)(1); the Institution's obligations under
this Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Institution may in its discretion (i) pay Executive all or part of the
compensation withheld while the respective obligations under this Agreement
were suspended and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.
(c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Institution's affairs by an order issued
under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. section 1818(e)(4) or (g)(1), all obligations of the Institution under
this Agreement shall terminate as of the effective date of the order, but
vested rights of the parties hereto shall not be affected.
(d) If the Institution is in default as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act, 12 U.S.C. section 1813(x)(1) all
obligations of the Institution under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested rights of the
contracting parties.
(e) All obligations of the Institution under this Agreement shall be
terminated, except to the extent determined that continuation of the
Agreement is necessary for the continued operation of the Institution, (i) by
the Director of the OTS (or his designee), the FDIC or the Resolution Trust
Corporation, at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Institution under the authority contained
in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C. section
1823(c); or (ii) by the Director of the OTS (or his designee) at the time the
Director (or his designee) approves a supervisory merger to resolve problems
related to the operations of the Institution or when the Institution 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 12 C.F.R. section 545.121 and any rules and regulations
promulgated thereunder.
17. 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.
18. 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.
19. GOVERNING LAW.
The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Illinois, but only to
the extent not superseded by federal law.
20. 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 Executive within
fifty (50) miles from the location of the Institution, 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.
In the event any dispute or controversy arising under or in connection
with Executive's termination is resolved in favor of Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the
payment of all back-pay, including salary, bonuses (including the Fixed
Incentive Award) and all other cash compensation, fringe benefits including
those accruing under any Benefit and any compensation and benefits due
Executive under this Agreement.
21. PAYMENT OF COSTS AND LEGAL FEES.
All reasonable costs and legal fees paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this
Agreement shall be paid or reimbursed by the Institution if Executive is
successful on the merits pursuant to a legal judgment, arbitration or
settlement.
22. INDEMNIFICATION.
(a) The Institution shall provide Executive (including her heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense and shall indemnify
Executive (and the Executive's heirs, executors and administrators) to the
fullest extent permitted under federal law against all expenses and
liabilities reasonably incurred by her in connection with or arising out of
any action, suit or proceeding in which she may be involved by reason of her
having been a director or officer of the Institution (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.
(b) Any payments made to Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 C.F.R. Section 545.121 and any
rules or regulations promulgated thereunder.
23. SUCCESSOR TO THE INSTITUTION.
The Institution 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 Institution or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Institution's obligations under this Agreement, in the same manner and to the
same extent that the Institution would be required to perform if no such
succession or assignment had taken place.
SIGNATURES
IN WITNESS WHEREOF, John G. Yedinak and Sergio Martinucci have caused
this Agreement to be executed and their seals to be affixed hereunto by their
duly authorized officers and directors, and Executive has signed this
Agreement, on the 1st day of November, 1996.
ATTEST: ARGO FEDERAL SAVINGS BANK
/s/Maria R. Garcia BY: /s/ J.G. Yedinak
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Secretary, Assistant
[SEAL]
ATTEST: ARGO BANCORP, INC.
/s/ Maria R. Garcia BY: /s/ Sergio Martinucci
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Secretary, Assistant
[SEAL]
WITNESS: EXECUTIVE:
/s/Donna L. Bowling /s/ Hanus M. Pitts
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