THIS AGREEMENT,
originally effective as of December 31, 2000, by and between
Flagstar Bank, FSB (the “Bank”) and Robert O. Rondeau,
Jr. (the “Employee”) in correlation with a separate,
but substantially similar, employment agreement between the
Employee and Flagstar Bancorp, Inc. (the “Company”)
effective as of the same date, is continued, amended and restated
as follows effective January 1, 2007 (the “Effective
Date”).
WHEREAS, the Bank
and the Company (hereinafter collectively referred to as the
“Company”) wish to continue to assure retention of the
services of the Employee for the period provided in this
Agreement;
WHEREAS, the
Employee is willing to serve in the employ of the Company for this
period; and
WHEREAS, certain
provisions of the original agreement require amending to comply
with certain provisions of the law, specifically including Internal
Revenue Code (the “Code”) Sections 162(m) and
409A.
NOW, THEREFORE, it
is AGREED as follows:
1.
Employment . The Employee is employed as an Executive
Director of the Company. The Employee shall render such
administrative and management services for the Company as are
currently rendered and as are customarily performed by persons
situated in a similar executive capacity. The Employee shall also
promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Company. The Employee’s
other duties shall be such as the Board of Directors of the Company
(the “Board”) may from time to time reasonably
direct.
2. Base
Compensation . The Bank agrees to pay the Employee during the
term of this Agreement an annual base salary, payable in cash in
accordance with the payroll practices of the Bank, at such rate as
determined by the Company’s Board (or as delegated by the
Board to the Company’s Compensation Committee). The Company
and the Employee agree that this amount will be not less than
$360,000. The Compensation Committee shall review, not less often
than annually, the rate of the Employee’s salary, and the
Board, in its sole discretion (unless delegated to the Compensation
Committee), may decide to increase Employee’s
salary..
3.
Discretionary Bonuses . From time to time the Employee may
be entitled to discretionary bonuses at the discretion of the Board
and/or the Compensation Committee. No other compensation provided
for in this Agreement shall be deemed a substitute for the
Employee’s right to receive discretionary bonuses.
(a)
Participation in Retirement, Medical and Other Plans . To
the extent eligible under the terms thereof, the Employee shall
participate in any plan that the Company maintains for the benefit
of its employees 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.
(b)
Employee Benefits: Expenses . The Employee shall participate
in any fringe benefits which are or may become available to the
Company’s senior management employees and which are
commensurate with the responsibilities and functions to be
performed by the Employee under this Agreement. The Company will
continue to provide the Employee with fringe benefits, including
participation in bonus, equity or incentive compensation plans,
substantially similar to those now provided to the Employee and as
may hereafter become available. The Employee shall be reimbursed
for all reasonable out-of-pocket business expenses which Employee
shall incur in connection with his services under this Agreement
upon substantiation of such expenses in accordance with the
policies of the Company.
(c)
Liability Insurance: Indemnification . The Company shall
provide the Employee (including Employee’s heirs, executors,
and administrators) with coverage under a standard directors’
and officers’ liability insurance policy at the
Company’s expense, or in lieu thereof, shall indemnify the
Employee (and Employee’s heirs, executors, and
administrators) to the fullest extent permitted under Federal law
against all expenses and liabilities reasonably incurred in
connection with or arising out of any action, suit or proceeding in
which Employee may be involved by reason of Employee’s having
been a director or officer of the Company (whether or not Employee
continues to be a director or officer at the time of incurring such
expenses or liabilities); such expenses and liabilities to include,
but not limited to, judgments, court costs and attorneys’
fees and the cost of reasonable settlements, and such settlements
to be approved by the Board of Directors of the Company; provided,
however, that such indemnification shall not extend to matters as
to which the Employee is finally adjudged to be liable for willful
misconduct or gross negligence in the performance of duties as a
director or officer of the Company.
5.
Term . The Company hereby employs the Employee, and the
Employee hereby accepts such employment under this Agreement, for
the period commencing on the Effective Date and ending on
December 31, 2009 (or such earlier date as is determined in
accordance with Section 9). Additionally, on the 1st of
January of each year starting on January 1, 2008, the
Employee’s term of employment may be extended by an
additional one-year, provided the Board determines in a duly
adopted resolution that this Agreement shall be extended.
“Expiration Date” shall mean the last day of the term
of this Agreement.
6.
Loyalty: Noncompetition .
(a) During
the term of employment hereunder and except for illnesses,
reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all business time, attention, skill, and
efforts to the faithful performance of duties to the Company
hereunder and/or to its affiliates; provided, however, that from
time to time the Employee may serve on the boards of directors of,
and hold any other offices or positions in, companies or
organizations which will not present, in the reasonable opinion of
the Board, any conflict of interest with the Company or any of its
subsidiaries or affiliates, or unfavorably affect the performance
of the Employee’s duties pursuant to this Agreement, or will
not violate any applicable statute or regulation. During the term
of employment under this Agreement, the Employee shall not engage
in any business or activity contrary to the business affairs or
interests
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of the Company
and/or its affiliates, or be gainfully employed in any other
position or job other than as provided above. .
(b) Nothing
contained in this Paragraph 6 shall be deemed to prevent or
limit the Employee’s right to invest in the capital stock or
other securities of any business dissimilar from that of the
Company, or to participate solely as a passive or minority investor
in any business.
7.
Standards . The Employee shall perform duties under this
Agreement in accordance with such reasonable standards as the Board
may establish from time to time. The Company will provide the
Employee with the working facilities and staff customary for
similar executives and necessary to perform duties.
8. Paid
Time Off . At such reasonable times as the Board shall in its
discretion permit, the Employee shall be entitled, without loss of
pay, to be absent voluntarily from the performance of employment
under this Agreement. All such voluntary absences will count as
paid time off, provided that:
(a) The
Employee shall be entitled to paid time off in accordance with the
policies that the Bank periodically establishes for various senior
management employees of the Company.
(b) The
Employee shall not receive any additional compensation from the
Company on account of Employee’s failure to take paid time
off, and the Employee shall accumulate unused paid time off from
one fiscal year to the next only to the extent provided by the
Bank’s policy for its employees in general or as required by
law.
(c) In
addition to the aforesaid paid time off, the Employee shall be
entitled without loss of pay, to be absent voluntarily from the
performance of employment with the Company for such additional
periods of time and for such valid and legitimate reasons as the
Board may in its discretion determine. Further, the Board may grant
to the Employee a leave or leaves of absence, with or without pay,
at such time or times and upon such terms and conditions as such
Board in its discretion may determine.
9.
Termination and Termination Pay . Subject to Section 11
hereof, the Employee’s employment hereunder may be terminated
under the following circumstances:
(a)
Death . The Employee’s employment under this Agreement
shall terminate upon Employee’s death during the term of this
Agreement, in which event the Employee’s estate shall be
entitled to receive six months base compensation plus any accrued
and unpaid discretionary bonus due Employee at the time of death,
payable in a lump sum the first of the month following the
Employee’s death. In addition, the Company shall maintain at
the same level of Company contribution as prior to the
Employee’s death, the existing medical insurance for the
Employee’s immediate family for six months after the
Employee’s death.
(b)
Disability . The Company may terminate the Employee’s
employment after having established the Employee’s
Disability. For purposes of this Agreement,
“Disability” means a physical or mental infirmity which
impairs the Employee’s ability to substantially perform
duties under this Agreement, or which can be expected to impair the
Employee’s ability
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to
substantially perform duties under this Agreement for a period of
180 consecutive days. The Employee shall be entitled to the
compensation and benefits provided for under this Agreement for
(i) any period during the term of this Agreement and prior to
the establishment of the Employee’s Disability during which
the Employee is unable to work due to the physical or mental
infirmity at the election of the Board of Directors, or
(ii) any period of Disability which is prior to the
Employee’s termination of employment pursuant to this
Section 9(b).
(c)
Just Cause . The Board may, by written notice to the
Employee, immediately terminate Employee’s employment at any
time for Just Cause. The Employee shall have no right to receive
compensation or other benefits for any period after termination for
Just Cause. Termination for “Just Cause” shall mean
termination because of, in the good faith determination of the
Board, the Employee’s 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) or final cease-and-desist order, or
material breach of any provision of this Agreement. No act, or
failure to act, on the Employee’s part shall be considered
“willful” failure to act if such act was in the best
interest of the Company, as determined in the sole discretion of
the Board. Notwithstanding the foregoing, the Employee shall not be
deemed to have been terminated for Just Cause unless there shall
have been delivered to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the
membership of the Board at a meeting of the Board called and held
for that purpose (after reasonable notice to the Employee and an
opportunity for the Employee to be heard before the Board), finding
that in the good faith opinion of the Board the Employee was guilty
of conduct set forth above of this Subsection (c) and
specifying the particulars thereof in detail.
(d)
Without Just Cause; Constructive Discharge . (1) The
Board may, by written notice to the Employee, immediately terminate
Employee’s employment at any time for a reason other than
Just Cause, in which event the Employee shall be entitled to
receive the following compensation and benefits (unless such
termination occurs within the time period set forth in Section
11(b) hereof in which event the benefits and compensation provided
for in Section 11 shall apply): (i) The annual amount of
base compensation under Section 2 of this Agreement at the
rate then in effect; (ii) the amount of incentive compensation
actually payable to the Employee under the Company’s
incentive compensation program in effect during the
Employee’s year of termination as if the Employee had not
terminated employment during the incentive period prorated based on
the number of days Employee was employed during the incentive
period; provided, however, that any stock based comp
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