Exhibit 10.3
AMENDED AND
RESTATED
CHANGE IN CONTROL SEVERANCE
PLAN
OF
JEFFERSON FEDERAL
BANK
1. Plan
Purpose. The purpose
of the Jefferson Federal Bank Employee Severance Compensation Plan
is to assure for Jefferson Federal Bank (the “Bank”)
the services of Eligible Employees of the Bank in the event of a
Change in Control (capitalized terms are defined in section 2 of
this Plan) of Jefferson Bancshares, Inc. (the “Holding
Company”) or the Bank. The benefits contemplated by the Plan
recognize the value to the Bank of the services and contributions
of Eligible Employees of the Bank and the effect upon the Bank
resulting from the uncertainties of continued employment, reduced
employee benefits, management changes and relocations that may
arise in the event of a Change in Control of the Bank or the
Company. The Board of Directors of the Bank believes that it is in
the best interests of the Bank and the Company to provide Eligible
Employees of the Bank and the Company with such benefits in order
to defray the costs and changes in employee status that could
follow a Change in Control. The Board of Directors of the Bank
believes that the Plan will also aid the Bank in attracting and
retaining highly qualified individuals who are essential to its
success and the Plan’s assurance of fair treatment of the
Bank’s Eligible Employees will reduce the distractions and
other adverse effects on Eligible Employees’ performance in
the event of a Change in Control. The Bank and the Holding Company
have amended and restated this Plan to conform with the
requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).
2. Definitions.
Whenever used herein, the following
terms shall have the meanings set forth below:
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a.
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“Affiliate”
means any corporation, trade or business, which, at the time of
reference, is together with the Bank, a member of a controlled
group of corporations, a group of trades or businesses (whether or
not incorporated) under common control, or an affiliated service
group, as described in Sections 414(b), 414(c), and 414(m) of the
Code, respectively, or any other organization treated as a single
employer with the Bank under Section 414(o) of the Code;
provided, however, that, where the context so requires, the term
“Affiliate” shall be construed to give full effect to
the provisions of Sections 409(l)(4) and 415(h) of the
Code.
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b.
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“Bank”
means Jefferson Federal Bank, or any successor thereto.
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c.
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“Change
in Control” means any one of the following events
occurs:
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(i)
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Merger : The Company merges into or consolidates with
another corporation, or merges another corporation into the
Company, and as a result less than a majority of the combined
voting power of the
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resulting corporation immediately
after the merger or consolidation is held by persons who were
stockholders of the Company immediately before the merger or
consolidation;
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(ii)
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Acquisition
of Significant Share Ownership : a
report on Schedule 13D or another form or schedule (other than
Schedule 13G) is filed or is required to be filed under Sections
13(d) or 14(d) of the Securities Exchange Act of 1934, if the
schedule discloses that the filing person or persons acting in
concert has or have become the beneficial owner of 25% or more of a
class of the Company’s voting securities, but this clause
(b) shall not apply to beneficial ownership of Company voting
shares held in a fiduciary capacity by an entity of which Company
directly or indirectly beneficially owns 50% or more of its
outstanding voting securities;
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(iii)
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Change
in Board Composition :
during any period of two consecutive years, individuals who
constitute the Company’s Board of Directors at the beginning
of the two-year period cease for any reason to constitute at least
a majority of the Company’s Board of Directors; provided,
however, that for purposes of this clause (iii) each director
who is first elected by the board (or first nominated by the board
for election by stockholders) by a vote of at least two-thirds of
the directors who were directors at the beginning of the period
shall be deemed to have been a director at the beginning of the
two-year period; or
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(iv)
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Sale
of Assets :
Company sells to a third party all or substantially all of the
Company’s assets.
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d.
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“Company”
means Jefferson Bancshares, Inc. or any successor
thereto.
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e.
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“Eligible Employee”
means any Employee who, as of the effective date of the Change in
Control has or would have been employed by the Bank for at least
one year, and whose employment, within three months prior to a
Change in Control, or within one year thereafter is either
(i) involuntarily terminated by the Company or any Affiliate,
other than for Just Cause, (ii) voluntarily terminated by an
Eligible Employee following (A) a relocation of an Eligible
Employee’s principal place of employment to a location that
is more than thirty-five (35) miles from its location
immediately prior to the Change in Control, without his or her
consent or (B) a reduction in the base salary of the Eligible
Employee from the amount being paid as of the date immediately
preceding the earlier of their termination date (but only if it
occurs within three months of the Change in Control) or the
effective
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date of the Change in Control; or
(iii) voluntarily terminated by an Eligible Employee as a
result of the failure to offer or employ the Eligible Employee in a
“comparable position.” For purposes of this Plan, a
“comparable position” shall mean a position which
(A) requires skills and knowledge similar to those required in
the Eligible Employee’s position immediately prior to the
Change in Control and (B) involves a work schedule that is
substantially similar to the work schedule followed by the Eligible
Employee immediately prior to the Change in Control. A position
shall not fail to be a comparable position solely as a result of a
change following a Change in Control in the Eligible
Employee’s (A) title, (B) supervisory authority or
(C) reporting responsibilities.
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f.
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“Employee”
means any person who has been employed by the Company or any
Affiliate for at least 120 days, on a full-time salaried basis,
immediately prior to the Change in Control, excluding any person
who is covered by an employment contract, change in control or
severance agreement with the Company or any Affiliate.
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g.
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“Just
Cause,” with respect to termination of employment, means an
act or acts of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
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. In determining
incompetence, acts or omissions shall be measured against standards
generally prevailing in the banking industry, as determined by the
Board of Directors of the Bank or the Company in its sole
discretion.
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h.
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“Year
of Service” means each consecutive 12 month period, beginning
with an employee’s date of hire and running without a
termination of employment in which an employee is credited with at
least one hour of service in each of the 12 calendar months in such
period. The taking of an leave of absence shall not eliminate a
period of time from being a Year of Service if such period of time
otherwise qualifies as such. Further if a particular 12 month
period of time would not otherwise qualify under the Plan as a Year
of Service because one hour of service is not credited during each
month of such period due to the taking of a leave of absence, then
such period of time shall be deemed to be a Year of Service for all
other sections of this Plan. For purposes of determining a
severance benefit under this Plan, partial years will be rounded up
to the nearest whole Year of Service.
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3. Severance Benefit to
Eligi
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