Exhibit 10.10
CHANGE IN CONTROL SEVERANCE
AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE
AGREEMENT is dated this 25 th day of January 2002, 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 Allen Ross Mallioux (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/Chief Lending Officer/Regional Manager of the
Employers or a material adverse change made by the Employers in the
Executive’s functions, duties or responsibilities as
Executive Vice President/Chief Lending Officer/Regional Manager 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’ salaried
employees.
2.
Benefits Upon Termination. If the Executive’s employment by
the Employers shall be terminated subsequent to a Change in Control
of the Corporation by (i) the Employers for other than Cause,
Disability, Retirement or the Executive’s death or (ii) the
Executive for Good Reason, then the Employers shall
(a) pay to the Executive, in
either thirty-six (36) equal monthly installments beginning with
the first business day of the month following the Date of
Termination or in a lump sum as of the Date of Termination (at the
Execu
