EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”) is made and
entered into as of this 18th day of December, 2007, but
effective as of January 1, 2005 (the “Effective
Date”), by and among Peoples Bancorp
(“Peoples”), the holding company of Peoples
Federal Savings Bank of DeKalb County (the
“Bank”), the Bank and Steven H. Caryer
(“Executive”), with reference to the
following:
This
Agreement amends and restates the prior Employment Agreement
between the Bank, Peoples and the Executive dated September
26, 2006 (the “Prior Agreement”). It
has been amended and restated for compliance with the final
regulations under 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), effective as of January
1, 2005.
WHEREAS,
Executive is currently employed by the Bank, which is a wholly
owned subsidiary of Peoples;
WHEREAS,
Peoples and the Bank desire to provide for the employment of
the Executive by the Bank;
WHEREAS,
the Executive is willing to commit himself to serving the Bank
on the terms and conditions herein provided;
NOW,
THEREFORE, IN CONSIDERATION OF the recitals set forth above
and the mutual promises, covenants, agreements, conditions and
undertakings hereinafter set forth, the adequacy and receipt
of which consideration is hereby acknowledged, the parties
hereto agree as follows:
This
Agreement shall have a term of three (3) years, commencing on
December 18, 2007 (the “Term”). Where used herein,
“Term” shall refer to the entire period of
employment of Executive by the Bank from and after the
Effective Date of this Agreement, whether for the period
provided above and as extended or terminated earlier as
hereinafter provided.
(a)
During
the Term, Executive shall be employed on a full-time basis to serve
as Vice President and Chief Financial Officer of the
Bank and perform the duties customarily performed by such officer
of a savings association, including the general supervision and
operation of the business and affairs of the Bank, and reporting to
the applicable regulatory authorities regarding the activities of
the Bank, subject to the direction of and the powers vested by law
in the Board of Directors of the Bank (the “Board”) and
the Bank’s shareholder, Peoples. Except as provided for
herein, the duties and position of Vice President and Chief
Financial Officer hereunder may be changed only by the mutual
written agreement of the parties hereto. The parties may mutually
agree to extend Executive’s full-time status for additional
12-month periods following December 18, 2007.
(b)
During
the Term hereof, Executive shall perform the services herein
contemplated to be performed by Executive faithfully, diligently
and to the best of Executive’s ability in
compliance
with instructions and policies of the Board, the Bank’s
Federal Charter and Bylaws and with all applicable laws and
regulations.
(a)
Base Salary . For executive’s services
rendered hereunder, the Bank shall pay or cause to be paid a base
salary to Executive at the rate of $100,940 per annum, payable in
conformity with the Bank’s normal payroll periods and
procedures. During the Term, Executive’s base salary shall be
reviewed at least once every twelve (12) months and shall be
increased (but not reduced) at any time, and from time to time, as
shall be substantially consistent with increases in base salary
generally awarded in the ordinary course of business to other
executives of the Bank, provided that Executive’s Base Salary
shall be increased by a percentage no less than the annual increase
of the cost of living index for the Fort Wayne, Indiana
metropolitan area. Any increase in base salary shall not serve to
limit or reduce any other obligation to the Executive under this
Agreement. The term “Base Salary” as utilized in this
Agreement shall refer to base salary as so increased.
(b)
Discretionary Bonus. In addition to Executive’s Base
Salary provided for under Paragraph 3(a) above, the Executive shall
participate in an equitable manner with all other senior management
executives of the Bank in discretionary bonuses that the Board may
award from time to time to the Bank’s senior management
executives. No other compensation provided for in this Agreement
shall be deemed a substitute for the Executive’s right to
participate in such discretionary bonuses.
(c)
Stock Awards. The Executive shall be eligible for
consideration for stock option grants by Peoples pursuant to any
stock option plan adopted or maintained by Peoples, for so long as
Executive shall be employed by the Bank.
(d)
Other benefits. The Executive will eligible to participate
in or receive benefits under any employee benefit plans of the Bank
which are available to senior executives and key management
employees of the Bank, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans and
arrangements. Nothing paid to 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.
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4.
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Vacation and Sick Leave.
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During
the Term hereof, Executive shall be entitled to paid vacation
and paid sick leave, the amount and term of which shall be
determined in accordance with the policies of the Bank as in
effect from time to time, but in no event shall the vacation
period be less than four weeks per year.
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5.
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Group Medical, Life Insurance and Other
Benefits.
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The
Executive shall participate in any plan that the Bank
maintains for the benefit of its executives if the plan
relates to (i) pension, profit sharing or other retirement
benefits, (ii) medical insurance or the reimbursement of
medical or dependent care expenses, or (iii) other group
benefits, including disability and life insurance
plans.
6.
Business
Expenses.
Executive
shall be entitled to reimbursement by the Bank for any and all
ordinary and necessary business expenses reasonably incurred
by Executive in the performance of Executive’s duties
and in acting for the Bank during the Term of this Agreement,
provided that Executive furnishes to the Bank, for review and
approval by the Chairman of the Board, adequate records and
other documentation as may be required for the substantiation
of such expenditures as a business expense of the
Bank
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7.
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Termination for Cause.
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(a)
The
Board may for cause terminate Executive’s employment at any
time during the Term of this Agreement. In such event, all rights
of Executive under this Agreement shall terminate and Executive
shall have no right to receive compensation or other benefits for
any period after the effective date of such termination for cause.
Termination for cause shall be defined as the Executive’s
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) or final
cease-and-desist order, or material breach of any provision of this
Agreement.
(b)
Notwithstanding
the foregoing, no termination for cause shall be effective with
respect to the Executive unless and until there shall have been
delivered to him a copy of a resolution, finding that in the good
faith opinion of the Board of Directors of the Bank (the
“Board”), the Executive’s actions and/or failure
to act justifies termination for cause and specifying the
particulars thereof in detail. Reasonable notice shall be provided
to the Executive and he shall receive an opportunity, together with
counsel, to be heard before the Board. The Executive shall not have
the right to receive compensation or other benefits for any period
after a termination for cause, except that benefits previously
vested or accrued shall be unaffected by such
termination.
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8.
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Events of Termination; Payments to Executive.
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The
provisions of this Paragraph 8 shall apply upon the occurrence
of an Event of Termination (as herein defined).
(a)
As
used in this Agreement, an “Event of Termination” shall
mean and include any one or more of the following (other than such
an event which occurs within 12 months following a Change in
Control, in which case any benefits due to Executive under
Paragraph 9 shall be made as provided in Paragraph 9): (i) the
termination by the Bank of the Executive’s employment
hereunder for any reason other than for cause (as defined in
Paragraph 7 hereinabove) during the Term; or (ii) the
Executive’s resignation or constructive termination from the
Bank’s employ, upon any (A) material change in the
Executive’s function, duties, or responsibilities, which
change would cause the Executive’s position to become one of
lesser responsibility, importance, or scope from the position and
attributes thereof (and any such material change shall be deemed a
continuing breach of this Agreement), (B) relocation of the
principal place at which Executive’s duties are to be
performed to a location outside a thirty (30) mile radius around
the principal location at which Executive’s duties are
performed immediately prior to the termination of employment, (C)
material reduction in the benefits and perquisites to the Executive
from those being provided as of the Effective Date of this
Agreement except for any changes that are generally applicable to
senior executives and key management employees
or
expressly contemplated by this Agreement (any such reduction
to be deemed a continuing breach of this Agreement), or (D) or
any other material breach of this Agreement by the Bank, which
events remain uncorrected for at least 30 days after the
Executive provides the Bank notice of such occurrence. Upon
the occurrence of any event described in clauses (A), (B), (C)
or (D) above, the 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 90 days after
the later of the (i) occurrence of the event giving rise to
said right to elect termination or (ii) actual knowledge of
such event by the Executive. In the case of a continuing
breach, the Executive may give such sixty (60) days prior
notice at any time. Executive’s sixty (60) days prior
notice of his Date of Termination shall be referred to as
“Notice of Termination.” The date specified in
Executive’s Notice of Termination to the Bank satisfying
the 60 days’ prior notice requirement shall be the
“Date of Termination.” Notwithstanding the
foregoing, if the Bank cures the violation set forth within
clauses (A), (B), (C) or (D) within 30 days after the Notice
of Termination is received by the Bank, such Notice of
Termination shall be deemed revoked by the
Executive.
(b)
Upon
the occurrence of an Event of Termination, on the Date of
Termination, as defined in this Paragraph 8, the Bank shall pay the
Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries as he may have designated, or his
estate, if no beneficiary designation has been made, or if no
beneficiaries survive the Executive, as severance pay or liquidated
damages, or both, a sum equal to (i) the amount of Base Salary of
the Executive for each year or portion thereof during the remaining
Term of this Agreement, plus (ii) bonuses based on the last bonus
received for each year or portion thereof remaining in the Term of
this Agreement, as well as (iii) the value of any health and/or
medical benefits as provided under Paragraph 5 and retirement
benefits under Paragraph 5 of this Agreement for each year or
portion thereof remaining in the Term of this Agreement, provided,
however, that if the Bank is not in compliance with its minimum
capital requirements or if such payments would cause the
Bank’s capital to be reduced below its minimum capital
requirements, such payments shall be deferred until such time as
the Bank is in capital compliance. Such salary, bonus, retirement
benefit, and health payments shall be made in a lump sum within ten
(10) days of the Date of Termination.
(c)
The
payments provided under this Paragraph 8 upon an Event of
Termination shall be in lieu of any other payments or damages
recoverable in any causes of action by Executive related to this
Agreement. As a condition to receipt of payments hereunder, the
Executive shall execute a Release and Settlement Agreement pursuant
to which the Executive shall waive any and all claims resulting
from employment at or termination from the Bank other than payments
or benefits which are expressly provided for in this
Agreement.
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9.
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Termination as a Result of a Change of
Control.
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(a)
Change of Control . For purposes of this Agreement and
except as provided in Paragraph 11(c) below relating to supervisory
transactions, the term “Change of Control” shall mean
the occurrence of any of the following events:
(i)
a
change in the ownership of the Bank or Peoples, which shall occur
on the date that any one person, or more than one person acting as
a group, acquires owne
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