Exhibit 10.9
CHANGE IN CONTROL SEVERANCE
AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE
AGREEMENT is dated this 24 th day of January 2006,
among First Federal Bancshares of Arkansas, Inc., a Texas
corporation (the “Corporation”), First Federal Bank of
Arkansas, FA, a federally chartered savings and loan association
(the “Association”), and Jeffrey Brandt (the
“Executive”). The Corporation and the Association are
collectively referred to as the “Employers”.
WITNESSETH
WHEREAS, the Executive is presently
an officer of each of the Employers;
WHEREAS, the Employers desire to be
ensured of the Executive’s continued active participation in
the business of the Employers; and
WHEREAS, in order to induce the
Executive to remain in the employ of the Employers and in
consideration of the Executive’s agreeing to remain in the
employ of the Employers, the parties desire to specify the
severance benefits which shall be due the Executive in the event
that his employment with the Employers is terminated under
specified circumstances;
NOW THEREFORE, in consideration of
the mutual agreements herein contained, and upon the other terms
and conditions hereinafter provided, the parties hereby agree as
follows:
1.
Definitions.
The following words and terms shall
have the meanings set forth below for the purposes of this
Agreement:
(a)
Annual Compensation.
The Executive’s “Annual
Compensation” for purposes of this Agreement shall be deemed
to mean the average level of compensation paid to the Executive by
the Employers or any subsidiary thereof during the most recent five
taxable years preceding the Date of Termination (or such shorter
period as the Executive was employed), and which was included in
the Executive’s gross income for tax purposes, including but
not limited to the Executive’s salary, bonuses and all other
amounts taxable to the Executive pursuant to any employee benefit
plans of the Employers.
(b)
Cause. Termination of the Executive’s employment
for “Cause” shall mean termination because of personal
dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law,
rule or regulation (other than traffic violations or similar
offenses), final cease-and-desist order or material breach of any
provision of this Agreement. For purposes of this paragraph, no act
or failure to act on the Executive’s part shall be
considered “willful” unless done, or omitted to be
done, by the Executive not in good faith and without reasonable
belief that the Executive’s action or omission was in the
best interests of the Employers.
(c)
Change in Control of the
Corporation. “Change in Control of the
Corporation” shall mean a change of control of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (“Exchange
Act”), or any successor thereto, whether or not the
Corporation is registered under the Exchange Act; provided that,
without limitation, such a change in control shall be deemed to
have occurred if (i) any “person” (as such 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 Corporation representing 25% or more of the
combined voting power of the Corporation’s then outstanding
securities; or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute
the Board of Directors of the Corporation cease for any reason to
constitute at least a majority thereof unless the election, or the
nomination for election by stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the
period.
(d)
Code. “Code” shall mean the Internal
Revenue Code of 1986, as amended.
(e)
Date of Termination.
“Date of Termination”
shall mean (i) if the Executive’s employment is
terminated for Cause, the date on which the Notice of Termination
is given, and (ii) if the Executive’s employment is
terminated for any other reason, the date specified in the Notice
of Termination.
(f)
Disability.
Termination by the Employers of the
Executive’s employment based on “Disability shall mean
termination because of any physical or mental impairment which
qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers or
any subsidiary or, if no such plan applies, which would qualify the
Executive for disability benefits under the Federal Social Security
System.
(g)
Good Reason.
Termination by the Executive of the
Executive’s employment for “Good Reason” shall
mean termination by the Executive following a Change in Control of
the Corporation based on:
(i)
Without the Executive’s
express written consent, the failure to elect or to re-elect or to
appoint or to re-appoint the Executive to the office of Executive
Vice President-Eastern Division of the Employers or a material
adverse change made by the Employers in the Executive’s
functions, duties or responsibilities as Executive Vice
President-Eastern Division of the Employers;
(ii)
Without the Executive’s
express written consent, a material reduction by the Employers in
the Executive’s base salary as the same may be increased
from time to time or a material reduction in the package of fringe
benefits provided to the Executive, taken as a whole;
(iii)
Without the Executive’s
express written consent, the Employers require the Executive to
work in an office which is more than 30 miles from the location of
the Employers’ current principal executive office, except for
required travel on business of the Employers to an extent
substantially consistent with the Executive’s present
business travel obligations;
(iv)
Any purported termination of the
Executive’s employment for Disability or Retirement which is
not effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (i) below; or
(v)
The failure by the Employers to
obtain the assumption of and agreement to perform this
Agreement by any successor as contemplated in Section 6
hereof.
(h)
IRS. IRS shall mean the Internal Revenue
Service.
(i)
Notice of Termination.
Any purported termination of the
Executive’s employment by the Employers for any reason,
including without limitation for Casue, Disability or Retirement,
or by the Executive for any reason, including without limitation
for Good Reason, shall be communicated by written “Notice of
Termination” to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a dated
notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision
so indicated, (iii) specifies a Date of Termination, which
shall be not less than thirty (30) nor more than ninety (90) days
after such Notice of Termination is given, except in the case of
the Employers’ termination of the Executive’s
employment for Cause, which shall be effective immediately; and
(iv) is given in the manner specified in Section 7
hereof.
(j)
Retirement.
“Retirement” shall mean
voluntary termination by the Executive in accordance with the
Employers’ retirement policies, including early retirement,
generally applicable to the Employers’ salari
