AMENDMENT TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT
TO EMPLOYMENT AGREEMENT (“Amendment”) is effective
as of this 8th day of June, 2009, by and between FLAGSTAR
BANCORP, INC. , a Michigan corporation (the
“Company”), FLAGSTAR BANK, FSB , a
federally-chartered savings bank (the “Bank”), and
MARK T. HAMMOND (“Employee”) (collectively, the
“Parties”).
WHEREAS ,
the Company, the Bank and Employee entered into that certain
Employment Agreement, originally effective as of December 31,
1997 and continued, amended and restated effective January 1, 2007,
as amended December 31, 2008 (the “Employment
Agreement”);
WHEREAS ,
the Company and Employee entered into that certain Agreement
Relating to Flagstar Bancorp, Inc.’s Participation in the
Department of the Treasury’s Capital Purchase Program,
effective as of January 30, 2009;
WHEREAS ,
the Company, the Bank and Employee have come to a mutual agreement
that Employee agrees to voluntarily step down from his position as
President and Chief Executive Officer of the Company by
January 29, 2010 or, if earlier, when the Company has located
a replacement President and Chief Executive Officer, but will
continue to serve in his position and retain the duties of
President and Chief Executive Officer of the Company until the
starting date of the person hired by the Company to replace
Employee in such capacity (or, notwithstanding such new hire, until
January 29, 2010 as requested by the Company);
WHEREAS ,
the Employee will continue to serve the Company as Vice Chairman of
the Board of Directors; and
WHEREAS ,
the Company, the Bank and Employee have come to a mutual agreement
that, in addition to his serving as Vice Chairman of the Board of
Directors of the Company, Employee will continue in his employment
with the Company and the Bank as a non-officer Executive Advisor to
the Company and the Bank for a two-year period from and after the
date of his relinquishment of the position of President and Chief
Executive Officer, under the terms and conditions set forth
herein.
NOW,
THEREFORE , in consideration of the foregoing, the mutual
covenants contained in this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are
acknowledged by the Parties, intending to be legally bound, do
agree as follows:
1. Section 1
of the Employment Agreement is hereby amended to add the following
to the end thereof:
“Notwithstanding anything to the contrary
in this Section 1, the Parties agree and acknowledge that the
Employee shall voluntarily step down from his position as President
and Chief Executive Officer on January 29, 2010 or, if
earlier, at the time that the Company locates a successor to
Employee in such position (the “Replacement
CEO”)
(subject to
extension until January 29, 2010 notwithstanding the hiring of
the Replacement CEO as and to the extent requested by the Company).
Immediately upon the employment of the Replacement CEO (subject to
extension until January 29, 2010 notwithstanding the hiring of
the Replacement CEO as and to the extent requested by the Company),
in addition to his continuing to serve as Vice Chairman of the
Board of Directors of the Company, Employee’s employment
title and duties shall automatically change to that of the
Company’s non-officer Executive Advisor. The date of such
change of title and duties shall be deemed the “New Effective
Date” hereunder. As Vice Chairman of the Board of Directors
of the Company and Executive Advisor, the Employee’s duties
shall be to provide strategic business advice and services to the
Company, to serve as requested by the Company (and without further
compensation as Vice Chairman of the Board of Directors) and to
perform such other duties that the Replacement CEO and the Board
shall assign Employee and as shall be agreed to by Employee from
time to time, as more fully described in
Section 7.”
2. Section 2
of the Employment Agreement is hereby amended to add the following
to the end thereof:
“Notwithstanding anything to the contrary
in this Section 2 of the Employment Agreement,
Employee’s annual base salary shall be $500,000, payable in
cash in accordance with the payroll practices of the Bank,
commencing on the New Effective Date and continuing while employed
as Executive Advisor and serving as Vice Chairman of the Board of
Directors of the Company. The Parties acknowledge that part of this
annual base salary shall be paid in consideration of his future
employment services for the Company and of the new obligations and
covenants undertaken by Employee pursuant to this
Amendment.”
3. Effective
as of the New Effective Date, Sections 3 and 4(b) of the
Employment Agreement will be deleted in their entirety.
4. Section 5
of the Employment Agreement is hereby deleted in its entirety and
replaced with the following:
“5.
Term . The Company hereby employs Employee, and Employee
hereby accepts such employment under the Employment Agreement, for
the period commencing on the date of this Amendment and ending on
the two-year anniversary of the New Effective Date.
Employee’s employment under the Employment Agreement may be
terminated at any time by Employee by giving 60 days written
notice to the Company, but Employee’s employment may not be
terminated by the Company hereunder other than for Just Cause
(specifically excluding any allegation as to Employee’s
failure to perform stated duties hereunder; otherwise as defined in
the Employment Agreement immediately prior to the adoption of this
Amendment). If the Company does not provide Employee with his base
salary or other benefits required to be paid or provided pursuant
to Section 4 of the Employment Agreement (as hereby amended),
during the term of this Agreement for any reason (including by
operation of law as contemplated by Section 22) other than a
voluntary termination by Employee or a termination by the Company
for Just Cause, the noncompetition provisions contained in
Section 21 shall no longer be effective
from and after
the date of such occurrence. “Expiration Date” shall
mean the last day of the term of the Employment Agreement.
Notwithstanding anything to the contrary in the Employment
Agreement, Employee shall serve as Vice Chairman of the Board of
Directors of the Company; provided, however, that Employee’s
service on the Board is a matter of, and subject to, shareholder
approval under the organizational documents of the
Company.”
5. Effective
as of the New Effective Date, the last sentence of Section 6(a) of
the Employment Agreement is hereby deleted and replaced with the
following:
“As
further provided in Section 21, and as limited therein, during
the period from the date of this Amendment through the second
anniversary of the New Effective Date (unless otherwise provided in
Section 5), the Employee shall not engage in any business or
activity con
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