First Federal Savings Bank of Iowa
Amended And Restated Employee Retention
Agreement
This
Agreement is made effective as of December
14, 2007 by and between
First Federal Savings Bank of Iowa ,
a federally chartered savings institution, with its principal
administrative office at 825 Central Avenue, Fort Dodge, Iowa 50501
(the "Bank"), and Kirk A. Yung (the "Executive").
Whereas ,
the Bank and the Executive are parties to an Employee Retention
Agreement made and entered into as of the 20th day of March, 1998
("Prior Agreement"); and
Whereas ,
the Bank and the Executive desire to amend and restate the Prior
Agreement in its entirety as set forth herein; and
Whereas ,
the Bank wishes to assure itself of the services of Executive for
the period provided in this Agreement; and
Whereas ,
Executive is willing to serve in the employ of the Bank on a
full-time basis for said period.
Now, Therefore ,
in consideration of the mutual covenants herein contained, and upon
the other terms and conditions hereinafter provided, the parties
hereby agree as follows:
1.
POSITION AND RESPONSIBILITIES
During
the period of his employment hereunder, Executive agrees to
serve as Senior Vice President of the Bank. During said
period, Executive also agrees to serve, if elected, as an
officer and director of any subsidiary or affiliate of the
Bank.
2.
TERMS AND DUTIES
(a)
The
period of Executive's employment under this Agreement shall
begin as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months
thereafter. Prior to each anniversary date of this Agreement,
the members of the Board of Directors of the Bank ("Board")
will conduct a comprehensive performance evaluation and review
of the Executive for purposes of determining whether to extend
the Agreement, and the results thereof shall be included in
the minutes of the Board's meeting. If the Board determines to
extend the Agreement and the Executive agrees to such
extension, the Executive's period of employment shall be
extended for an additional year such that the remaining term
shall be three (3) years from the upcoming anniversary date.
If the Board does not determine to extend the Agreement or if
the Executive does not agree to a proposed extension, the
Agreement shall expire at the end of the term then in
effect.
(b)
During
the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods,
and reasonable leaves of absence, Executive shall devote
substantially all his business time, attention, skill, and
efforts to the faithful performance of his duties hereunder
including activities and services related to the organization,
operation and management of the Bank; provided, however, that,
with the approval of the Board, as evidenced by a resolution
of such Board, from time to time, Executive may serve, or
continue to serve, on the boards of directors of, and hold any
other offices or positions in, companies or organizations,
which, in such Board's judgment, will not present any conflict
of interest with the Bank, or materially adversely affect the
performance of Executive's duties pursuant to this
Agreement.
3.
COMPENSATION AND REIMBURSEMENT
(a)
The
compensation specified under this Agreement shall constitute
the salary and benefits paid for the duties described in
section 2(b). The Bank shall pay Executive as compensation a
salary no
less than the rate in effect on the date of this
agreement ("Base
Salary"). Such Base Salary shall be payable monthly, on the
first day of each month, or in accordance with the Bank's
customary payroll practices in effect from time to time for
other similarly situated employees. During the period of this
Agreement, Executive's Base Salary shall be reviewed at least
annually. Such review shall be conducted by a Committee
designated by the Board, and the Board may increase
Executive's Base Salary. In addition to the Base Salary
provided in this Section 3(a), the Bank shall provide
Executive with all such other benefits as are provided
uniformly to full-time employees of the Bank, subject to and
upon the same terms and conditions generally applicable to
full-time employees.
(b)
The
Bank will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those
in which Executive was participating or otherwise deriving
benefit form immediately prior to the beginning of the term of
this Agreement. Without limiting the generality of the
foregoing provisions of this Subsection (b), Executive will be
entitled to participate in or receive benefits under any
employee benefit plans including but not limited to,
retirement plans, supplemental retirement plans, pension
plans, profit-sharing plans, health-and-accident plans,
medical coverage or any other employee benefit plan or
arrangement made available by the Bank in the future to its
senior executives and key management employees, subject to and
on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Executive will
be entitled to incentive compensation and bonuses as provided
in any plan of the Bank in which Executive is eligible to
participate. Nothing paid to the 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.
4.
PAYMENTS TO EXECUTIVE UPON AN EVENT OF
TERMINATION
The
provisions of this Section shall in all respects be subject to
the terms and conditions stated in Sections 7 and
14.
(a)
The
provisions of this Section shall apply upon the occurrence of
an Event of Termination (as herein defined) during any portion
of the Executive's term of employment under this Agreement
that follows a Change in Control. As used in this Agreement,
an "Event of Termination" shall mean and include any
termination by the Bank of Executive's full-time employment
hereunder for any reason other than a Termination for Cause as
defined in Section 6 hereof and any termination of employment
by the Executive within sixty (60) days following any material
reduction in his compensation and benefits from the levels in
effect immediately prior to the Change in Control or any
material adverse change in the Executive's position, duties,
authority or terms and conditions of employment from those in
effect immediately prior to the Change in Control. In the
event of a continuing breach of this Agreement by the Bank,
the Executive shall not waive any of his rights under this
Agreement by virtue of the fact that the Executive is engaged
in good faith discussions to resolve such breach.
(b)
Upon
the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 7, the Bank shall pay
Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may
be, as severance pay or liquidated damages, or both, a sum
equal to the greater of the payments due for the remaining
term of the Agreement or 3 times the average of aggregate of
the Executive's Base Salary plus bonus and other cash
compensation paid to, plus the amount of all determinable
contributions made to or under any employee benefit plan on
behalf of, the Executive by the Bank during the period of five
(5) years ending on the Date of Termination; 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.
(c)
Upon
the occurrence of an Event of Termination, the Bank will cause
to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Bank
for Executive prior to his termination, provided that such
benefits shall not be provided in the event they should
constitute an unsafe or unsound banking practice relating to
executive compensation and employment contracts pursuant to 12
C.F.R. (S)(S) 563.39 and 563.161, as is now or hereafter in
effect. Such coverage shall cease upon the expiration of
thirty-six (36) full calendar months following the Date of
Termination.
(d)
Upon
the occurrence of an Event of Termination, Executive will be
entitled to any benefits granted to him pursuant to any stock
option plan of the Bank or Company.
(e)
Upon
the occurrence of an Event of Termination, the Executive will
be entitled to any benefits awarded to him under any
restricted stock plan of the Bank or the Company.
(f)
Notwithstanding
the preceding paragraphs of this Section 4, in the event that
the Executive receives payments in the nature of compensation
(whether or not pursuant to this Agreement) that are subject
to the tax imposed under section 4999 of the Internal Revenue
Code of 1986, as amended ("Code") or the corresponding
provision of any succeeding law ("Parachute Tax"),
then:
(i)
if,
by reducing the payments and benefits provided for in this
Agreement, the aggregate payments in the nature of
compensation may be reduced to a level at which the Parachute
Tax is imposed, such payments shall be reduced to the maximum
amount which may be provided without resulting in the
imposition of a Parachute Tax; and
(ii)
in
all other cases, the payments and benefits provided hereunder
shall not be affected.
The
applicability of any reduction under Section 4(f)(i) and the
amount and manner of such reduction shall be determined by a
firm of independent certified public accountants selected by
the Bank which shall, in determining the manner of any
reduction, consult with and take into accounts the preferences
of the Executive.
(g)
Notwithstanding
the foregoing, there will be no reduction in the compensation
otherwise payable to Executive during any period which
Executive is incapable of performing his duties hereunder by
reason of temporary disability.
(h)
Any
payments made to Executive pursuant to this Agreement or
otherwise, are subject to and conditioned upon their
compliance with 12.U.S.C. (S) 1818(k) and any regulations
promulgated thereunder.
5.
CHANGE IN CONTROL
(a)
No
benefit shall be payable under Section 4 unless there shall
have been a Change in Control of the Bank or North Central
Bancshares, Inc., an Iowa corporation of which the Bank is a
subsidiary (the "Company"), as set forth below. For purposes
of this Agreement, a "Change in Control" of the Bank or
Company shall mean:
(i)
approval
by the stockholders of the Bank of a transaction that would
result in the reorganization, merger or consolidation of the
Bank with one or more other persons, other than a transaction
following which:
(A)
at
least 51% of the equity ownership interests of the entity
resulting from such transaction are beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
in substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the outstanding equity ownership
interests in the Bank; and
(B)
at
least 51% of the securities entitled to vote generally in the
election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule
13d-3 promulgated under the Exchange Act) in substantially the
same relative proportions by persons who, immediately prior to
such transaction, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) at least 51% of
the securities entitled to vote generally in the election of
directors of the Bank;
(ii)
the
acquisition of all or substantially all of the assets of the
Bank or beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the
outstanding securities of the Bank entitled to vote generally
in the election of directors by any person or by any persons
acting in concert, or approval by the stockholders of the Bank
of any transaction which would result in such an acquisition;
or
(iii)
a
complete liquidation or dissolution of the Bank, or approval
by the stockholders of the Bank of a plan for such liquidation
or dissolution; or
(iv)
the
occurrence of any event if, immediately following such event,
at least 50% of the members of the board of directors of the
Bank do not belong to any of the following
groups:
(A)
individuals
who were members of the Board of the Bank on the date of this
Agreement; or
(B)
individuals
who first became members of the Board of the Bank after the
date of this Agreement either:
(I)
upon
election to serve as a member of the Board of the Bank by
affirmative vote of three-quarters of the members of such
board, or of a nominating committee thereof, in office at the
time of such first election; or
(II)
provided,
however, that such individual's election or nomination did not
result from an actual or threatened election contest (within
the meaning of Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation
of proxies or consents (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) other than
by or on behalf of the Board of the Bank;
(v)
any
event which would be described in Section 5(a)(i), (ii), (iii)
or (iv) if the term "Company" were substituted for the term
"Bank" therein.
(b)
In
no event, however, shall a Change of Control be deemed to have
occurred as a result of any acquisition of securities or
assets of the Bank, the Company, or any affiliate or
subsidiary of either of them, by the Bank, the Company or any
affiliate or subsidiary of either of them, or by any employee
benefit plan maintained by any of them. For purposes of this
section 5 the term "person" shall have the meaning
assigned
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