AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT, dated this 14 th day
of December, 2007, is between First Federal Bancshares of
Arkansas, Inc., a Texas chartered corporation (the
“Corporation”), First Federal Bank, a federally
chartered savings bank and a wholly owned subsidiary of the
Corporation (the “Bank”), and Larry J. Brandt
(the “Executive”).
WITNESSETH
WHEREAS, the Bank was
previously known as First Federal Bank of Arkansas,
F.A.;
WHEREAS, the Executive is
currently employed as the President and Chief Executive
Officer of the Corporation and as Chairman of the Board and
Chief Executive Officer of the Bank, and the Corporation, the
Bank and the Executive have previously entered into an
employment agreement dated May 3, 1996, as amended on July
22, 1998, April 27, 2000, April 25, 2002 and January 24, 2006
(the “Prior Agreement”);
WHEREAS, the Corporation
and the Bank (together the “Employers”) desire to
amend and restate the Prior Agreement in order to make
changes to comply with Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), as well as
certain other changes;
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 premises and the mutual agreements
herein contained, 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)
Average Annual Compensation. The
Executive’s “Average 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 year in which the Date of
Termination occurs (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 Base Salary, bonuses,
director = s fees, if applicable, and
all other amounts taxable to the Executive pursuant to any
employee benefit plans of the Employers.
(b)
Base Salary. “Base
Salary” shall have the meaning set forth in Section
3(a) hereof.
(c)
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) or 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 interest of the
Employers.
(d)
Change in Control. “Change
in Control” shall mean a change in the ownership of the
Corporation or the Bank, a change in the effective control of
the Corporation or the Bank or a change in the ownership of a
substantial portion of the assets of the Corporation or the
Bank, in each case as provided under Section 409A of the Code
and the regulations thereunder.
(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, (ii) if the Executive’s
employment is terminated due to death, the date of death, and
(iii) if the Executive’s employment is terminated for
any other reason, the date specified in such Notice of
Termination.
(f)
Disability.
“Disability” shall mean the Executive
(i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an
accident and health plan covering employees of the
Employers.
(g)
Effective Date. The Effective
Date of this Agreement shall mean the date first written
above.
(h)
Good Reason. Termination by the
Executive of the Executive’s employment for “Good
Reason” shall mean termination by the Executive based
on the occurrence of any of the following
events:
(i)
any material breach of this Agreement by the Employers,
including without limitation any of the following: (A) a
material diminution in the Executive’s base
compensation, (B) a material diminution in the
Executive’s authority, duties or responsibilities as
prescribed in Section 2, or (C) any requirement that the
Executive report to a corporate officer or employee of the
Employers instead of reporting directly to the Boards of
Directors of the Employers; or
(ii)
any material change in the geographic location at which the
Executive must perform his services under this
Agreement;
provided,
however, that prior to any termination of employment for Good
Reason, the Executive must first provide written notice to the
Employers within ninety (90) days of the initial existence of
the condition, describing the existence of such condition, and
the Employers shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Employers
received the written notice from the Executive. If
the Employers remedy the condition within such thirty (30) day
cure period, then no Good Reason shall be deemed to exist with
respect to such condition. If the Employers do not
remedy the condition within such thirty (30) day cure period,
then the Executive may deliver a Notice of Termination for
Good Reason at any time within sixty (60) days following the
expiration of such cure period.
(i)
IRS. IRS shall mean the Internal
Revenue Service.
(j)
Notice of Termination. Any
purported termination of the Executive’s employment by
the Employers for any reason, including without limitation
for Cause, Disability or Retirement, or by the Executive for
any reason, including without limitation for Good Reason,
shall be communicated by a 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 Executive’s employment for Cause; and
(iv) is given in the manner specified in Section 10
hereof.
(k)
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. Term
of Employment.
(a) The
Employers hereby employ the Executive as President and Chief
Executive Officer of the Corporation and as Chairman of the
Board and Chief Executive Officer of the Bank, and the
Executive hereby accepts said employment and agrees to render
such services to the Employers on the terms and conditions
set forth in this Agreement. Unless extended as provided in
this Section 2, this Agreement shall terminate three (3)
years after December 14, 2007 (the “Commencement
Date”). Prior to the first annual anniversary of the
Commencement Date and each annual anniversary thereafter, the
Boards of Directors of the Employers shall consider, review
(with appropriate corporate documentation thereof, and after
taking into account all relevant factors, including the
Executive’s performance) and, if appropriate,
explicitly approve a one-year extension of the remaining term
of this Agreement. The term of this Agreement
shall continue to extend each year if the Boards of Directors
so approve such extension unless the Executive gives written
notice to the Employers of the Executive’s election not
to extend the term, with such notice to be given not less
than thirty (30) days prior to any such anniversary
date. If the Boards of Directors elect not to
extend the term, they shall give written notice of such
decision to the Executive not less than thirty (30) days
prior to any such anniversary date. If any party
gives timely notice that the term will not be extended as of
any annual anniversary date, then this Agreement shall
terminate at the conclusion of its remaining
term. References herein to the term of this
Agreement shall refer both to the initial term and successive
terms.
(b) During
the term of this Agreement, the Executive shall perform such
executive services for the Employers as are consistent with
his titles of President and Chief Executive Officer of the
Corporation and as Chairman and Chief Executive Officer of
the Bank.
3. Compensation
and Benefits.
(a) The
Employers shall compensate and pay Executive for his services
during the term of this Agreement at a minimum base salary of
$325,000 per year (“Base Salary”), which may be
increased from time to time in such amounts as may be
determined by the Boards of Directors of the
Employers. In addition to his Base Salary, the
Executive shall be entitled to receive during the term of
this Agreement such bonus payments as may be determined by
the Boards of Directors of the Employers.
(b) During
the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or
other retirement benefit plan, profit sharing, stock option,
employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties
and responsibilities, as fixed by the Boards of Directors of
the Employers. The Employers shall not make any
changes in such plans, benefits or privileges which would
adversely affect Executive’s rights or benefits
thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change
in the rights of or benefits to Executive as compared with
any other executive officer of the
Employers. Nothing paid to Executive under any
plan or arrangement presently in effect or made available in
the future shall be deemed to be in lieu of the salary
payable to the Executive pursuant to Section 3(a)
hereof.
(c) During
the term of this Agreement, the Executive shall be entitled
to paid annual vacation in accordance with the policies as
established from time to time by the Boards of Directors of
the Employers. The Executive shall not be entitled
to receive any additional compensation from the Employers for
failure to take a vacation, nor shall the Executive be able
to accumulate unused vacation time from one year to the next,
except to the extent authorized by the Boards of Directors of
the Employers.
(d) During
the term of this Agreement, in keeping with past practices,
the Employers shall continue to provide the Executive with
the automobile he presently drives. The Employers shall be
responsible and shall pay for all costs of insurance
coverage, repairs, maintenance and other incidental expenses,
including license, fuel and oil. &nb
