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First Federal Savings Bank of Iowa
Employment Agreement
This
Employment Agreement (“Agreement”)
is made and entered into as of December 14, 2007 by and
between
First Federal Savings Bank of Iowa ,
a savings bank organized and operating under the federal laws of
the United States and having an office at 825 Central Avenue, Fort
Dodge, Iowa 50501 (“Bank”) and David M. Bradley, an
individual residing at 13321 Douglas Parkway, Urbandale, Iowa 50323
(“Mr. Bradley”).
W i t n e s s e t h:
Whereas ,
Mr. Bradley currently serves the Bank in the capacity of President
and Chief Executive Officer; and
Whereas ,
the Bank is a wholly owned subsidiary of North Central Bancshares,
Inc. (“Holding Company”); and
Whereas ,
effective as of the date of this Agreement, the Holding Company has
converted from a federally chartered mutual holding company to a
publicly held Iowa corporation; and
Whereas ,
the Bank desires to assure for itself the continued availability of
Mr. Bradley’s services and the ability of Mr. Bradley to
perform such services with a minimum of personal distraction in the
event of a pending or threatened Change of Control (as hereinafter
defined); and
Whereas ,
Mr. Bradley is willing to continue to serve the Bank on the terms
and conditions hereinafter set forth; and
Whereas ,
Mr. Bradley and the Bank are parties to an Employment Agreement
made and entered into as of March 20, 1996 (“Original
Agreement”); and
Whereas ,
pursuant to section 25 of the Original Agreement, the parties wish
to amend the Original Agreement;
Now ,
Therefore ,
in consideration of the premises and the mutual covenants and
conditions hereinafter set forth, the Bank and Mr. Bradley hereby
agree as follows:
Section 1.
Employment
.
The
Bank agrees to continue to employ Mr. Bradley, and Mr. Bradley
hereby agrees to such continued employment, during the period
and upon the terms and conditions set forth in this
Agreement.
Section 2.
Employment Period: Remaining Unexpired Employment
Period
.
(a)
The
terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this
section 2 (“Employment Period”). The Employment
Period shall be for an initial term of three years beginning
on the date of this Agreement. Prior to the first anniversary
of the date of this Agreement and on each anniversary date
thereafter (each, an “Anniversary Date”), the
Board of Directors of the Bank (“Board”) shall
review the terms of this Agreement and Mr. Bradley’s
performance of services hereunder and may, in the absence of
objection from Mr. Bradley, approve an extension of the
Employment Agreement. In such event, the Employment Agreement
shall be extended to the third anniversary of the relevant
Anniversary Date.
(b)
For
all purposes of this Agreement, the term “Remaining
Unexpired Employment Period” as of any date shall mean
the period beginning on such date and ending on the
Anniversary Date on which the Employment Period (as extended
pursuant to section 2(a)of this Agreement) is then scheduled
to expire.
(c)
Nothing
in this Agreement shall be deemed to prohibit the Bank at any
time from terminating Mr. Bradley’s employment during
the Employment Period with or without notice for any
reason;
provided, however ,
that the relative rights and obligations of the Bank and Mr.
Bradley in the event of any such termination shall be determined
under this Agreement.
Section 3.
Duties
.
Mr.
Bradley shall serve as President and Chief Executive Officer
of the Bank, having such power, authority and responsibility
and performing such duties as are prescribed by or under the
By-Laws of the Bank and as are customarily associated with
such position. Mr. Bradley shall devote his full business time
and attention (other than during weekends, holidays, approved
vacation periods, and periods of illness or approved leaves of
absence) to the business and affairs of the Bank and shall use
his best efforts to advance the interests of the
Bank.
Section 4.
Cash Compensation
.
In
consideration for the services to be rendered by Mr. Bradley
hereunder, the Bank shall pay to him a salary
no
less than the rate in effect on the date of this
agreement ,
payable in approximately equal installments in accordance with
the Bank’s customary payroll practices for senior
officers. At least annually during the Employment Period, the
Board shall review Mr. Bradley’s annual rate of salary
and may, in its discretion, approve an increase therein. In
addition to salary, Mr. Bradley may receive other cash
compensation from the Bank for services hereunder at such
times, in such amounts and on such terms and conditions as the
Board may determine from time to time.
Section 5.
Employee Benefit Plans and Programs
.
During
the Employment Period, Mr. Bradley shall be treated as an
employee of the Bank and shall be eligible to participate in
and receive benefits under any and all qualified or
non-qualified retirement, pension, savings, profit-sharing or
stock bonus plans, any and all group life, health (including
hospitalization, medical and major medical), dental, accident
and long term disability insurance plans, and any other
employee benefit and compensation plans (including, but not
limited to, any incentive compensation plans or programs,
stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or
cover employees of, the Bank, in accordance with the terms and
conditions of such employee benefit plans and programs and
compensation plans and programs and consistent with the
Bank’s customary practices.
Section 6.
Indemnification and Insurance
.
(a)
During
the Employment Period and until the expiration of time
provided by law for the commencement of any judicial or
administrative proceeding on the basis of such service, the
Bank shall cause Mr. Bradley to be covered by and named as an
insured under any policy or contract of insurance obtained by
it to insure its directors and officers against personal
liability for acts or omissions in connection with service as
an officer or director of the Bank or service in other
capacities at the request of the Bank. The coverage provided
to Mr. Bradley pursuant to this section 6 shall be of the same
scope and on the same terms and conditions as the coverage (if
any) provided to other officers or directors of the
Bank.
(b)
To
the maximum extent permitted under applicable law, during the
Employment Period and until the expiration of time provided by
law for the commencement of any judicial or administrative
proceeding on the basis of such service, the Bank shall
indemnify, and shall cause its subsidiaries and affiliates to
indemnify Mr. Bradley against and hold him harmless from any
costs, liabilities, losses and exposures to the fullest extent
and on the most favorable terms and conditions that similar
indemnification is offered to any director or officer of the
Bank or any subsidiary or affiliate thereof. This section 6(b)
shall not be applicable where section 19 is
applicable.
Section 7.
Outside Activities
.
Mr.
Bradley may serve as a member of the boards of directors of
such business, community and charitable organizations as he
may disclose to and as may be approved by the Board (which
approval shall not be unreasonably withheld);
provided, however ,
that such service shall not materially interfere with the
performance of his duties under this Agreement. Mr. Bradley may
also engage in personal business and investment activities which do
not materially interfere with the performance of his duties
hereunder;
provided, however ,
that such activities are not prohibited under any code of conduct
or investment or securities trading policy established by the Bank
and generally applicable to all similarly situated executives. Mr.
Bradley may also serve as an officer or director of the Holding
Company on terms and conditions as the Bank and the Holding Company
may mutually agree upon, and such service shall not be deemed to
materially interfere with Mr. Bradley’s performance of his
duties hereunder or otherwise to result in a material breach of
this Agreement.
Section 8.
Working Facilities and Expenses
.
Mr.
Bradley’s principal place of employment shall be at the
Bank’s executive offices at the address first above
written, or at such other location within Webster County, Iowa
at which the Bank shall maintain its principal executive
offices, or at such other location as the Bank and Mr. Bradley
may mutually agree upon. The Bank shall provide Mr. Bradley at
his principal place of employment with a private office,
secretarial services and other support services and facilities
suitable to his position with the Bank and necessary or
appropriate in connection with the performance of his assigned
duties under this Agreement. The Bank shall provide to Bradley
for his exclusive use an automobile owned or leased by the
Bank and appropriate to his position, to be used in the
performance of his duties hereunder, including commuting to
and from his personal residence. The Bank shall reimburse Mr.
Bradley for his ordinary and necessary business expenses,
including, without limitation, all expenses associated with
his business use of the aforementioned automobile, fees for
memberships in such clubs and organizations as Mr. Bradley and
the Bank shall mutually agree are necessary and appropriate
for business purposes, and his travel and entertainment
expenses incurred in connection with the performance of his
duties under this Agreement, in each case upon presentation to
the Bank of an itemized account of such expenses in such form
as the Bank may reasonably require.
Section 9.
Termination of Employment with Severance
Benefits
.
(a)
Mr.
Bradley shall be entitled to the severance benefits described
herein in the event that his employment with the Bank
terminates during the Employment Period under any of the
following circumstances:
(i)
Mr.
Bradley’s voluntary resignation from employment with the
Bank within ninety (90) days following:
(A)
the
failure of the Board to appoint or re-appoint or elect or
re-elect Mr. Bradley to the office of President and Chief
Executive Officer (or a more senior office) of the
Bank;
(B)
the
failure of the stockholders of the Bank to elect or re-elect
Mr. Bradley or the failure of the Board (or the nominating
committee thereof) to nominate Mr. Bradley for such election
or re-election;
(C)
the
expiration of a thirty (30) day period following the date on
which Mr. Bradley gives written notice to the Bank of its
material failure, whether by amendment of the Bank’s
Charter or By-laws, action of the Board or the Bank’s
stockholders or otherwise, to vest in Mr. Bradley the
functions, duties, or responsibilities prescribed in section 3
of this Agreement, unless, during such thirty (30) day period,
the Bank fully cures such failure in a manner determined by
Mr. Bradley, in his discretion to be satisfactory;
or
(D)
the
expiration of a thirty (30) day period following the date on
which Mr. Bradley gives written notice to the Bank of its
material breach of any term, condition or covenant contained
in this Agreement (including, without limitation any reduction
of Mr. Bradley’s rate of base salary in effect from time
to time and any change in the terms and conditions of any
compensation or benefit program in which Mr. Bradley
participates which, either individually or together with other
changes, has a material adverse effect on the aggregate value
of his total compensation package), unless, during such thirty
(30) day period, the Bank fully cures such failure;
or
(ii)
the
termination of Mr. Bradley’s employment with the Bank
for any other reason not described in section
10(a).
In
such event, then, the Bank shall provide the benefits and pay
to Mr. Bradley the amounts described in section
9(b).
(b)
Upon
the termination of Mr. Bradley’s employment with the
Bank under circumstances described in section 9(a) of this
Agreement, the Bank shall pay and provide to Mr. Bradley (or,
in the event of his death, to his estate):
(i)
his
earned but unpaid compensation as of the date of the
termination of his employment with the Bank, such payment to
be made at the time and in the manner prescribed by law
applicable to the payment of wages but in no event later than
thirty (30) days after termination of employment;
(ii)
the
benefits, if any, to which he is entitled as a former employee
under the employee benefit plans and programs and compensation
plans and programs maintained for the benefit of the
Bank’s officers and employees;
(iii)
continued
group life, health (including hospitalization, medical and
major medical), dental, accident and long-term disability
insurance benefits, in addition to that provided pursuant to
section 9(b)(ii), and after taking into account the coverage
provided by any subsequent employer, if and to the extent
necessary to provide for Mr. Bradley, for the Remaining
Unexpired Employment Period, coverage equivalent to the
coverage to which he would have been entitled under such plans
(as in effect on the date of his termination of employment,
or, if his termination of employment occurs after a Change of
Control, on the date of such Change of Control, whichever
benefits are greater) if he had continued working for the Bank
during the Remaining Unexpired Employment Period at the
highest annual rate of compensation achieved during that
portion of the Employment Period which is prior to Mr.
Bradley’s termination of employment with the
Bank;
(iv)
thirty
(30) days following his termination of employment with the
Bank, a lump sum payment, in an amount equal to the present
value of the salary that Mr. Bradley would have earned if he
had continued working for the Bank during the Remaining
Unexpired Employment Period at the highest annual rate of
salary achieved during that portion of the Employment Period
which is prior to Mr. Bradley’s termination of
employment with the Bank, where such present value is to be
determined using a discount rate equal to the applicable
short-term federal rate prescribed under section 1274(d) of
the Internal Revenue Code of 1986 (“Code”) (the
"Short Term AFR"), compounded using the compounding period
corresponding to the Bank’s regular payroll periods for
its officers, such lump sum to be paid in lieu of all other
payments of salary provided for under this Agreement in
respect of the period following any such
termination;
(v)
thirty
(30) days following his termination of employment with the
Bank, a lump sum payment in an amount equal to the product of
(A) the Bank’s “normal cost” for its
tax-qualified defined benefit plan for the most recently
completed fiscal year of the plan (expressed as a percentage
of the compensation recognized in the plan’s benefit
formula and determined by, or on the basis of information
furnished by, the plan’s actuary) multiplied by (B) the
amount payable under section 9(b)(iv);
(vi)
thirty
(30) days following his termination of employment with the
Bank, a lump sum payment in an amount equal to the present
value of the additional employer contributions (or if greater
in the case of a leveraged employee stock ownership plan or
similar arrangement, the additional assets allocable to him
through debt service, based on the fair market value of such
assets at termination of employment) to which he would have
been entitled under any and all qualified and non-qualified
defined contribution plans maintained by, or covering
employees of, the Bank, if he were 100% vested thereunder and
had continued working for the Bank during the Remaining
Unexpired Employment Period at the highest annual rate of
compensation achieved during that portion of the Employment
Period which is prior to Mr. Bradley's termination of
employment with the Bank, and making the maximum amount of
employee contributions, if any, required under such plan or
plans, such present value to be determined on the basis of a
discount rate, compounded using the compounding period that
corresponds to the frequency with which employer contributions
are made to the relevant plan, equal to the Short Term
AFR;
(vii)
the
payments that would have been made to Mr. Bradley under any
cash bonus or long-term or short-term cash incentive
compensation plan maintained by, or covering employees of, the
Bank if he had continued working for the Bank during the
Remaining Unexpired Employment Period and had earned the
maximum bonus or incentive award in each calendar year that
ends during the Remaining Unexpired Employment Period, each
annual payment to be equal to the product of:
(A)
the
maximum percentage rate at which an award was ever available
to Mr. Bradley under such incentive compensation plan;
multiplied by
(B)
the
salary that would have been paid to Mr. Bradley during each
such calendar year at the highest annual rate of salary
achieved during that portion of the Employment Period which is
prior to Mr. Bradley’s termination of employment with
the Bank;
where
such payments are to be made (without discounting for early
payment) within thirty (30) days following Mr. Bradley’s
termination of employment;
(viii)
Mr.
Bradley shall be deemed fully vested in all options and
appreciation rights under any stock option or appreciation
rights plan or program maintained by, or covering employees
of, the Bank, even if he is not vested under such plan or
program;
(ix)
Mr.
Bradley shall be deemed fully vested in all shares awarded
under any restricted stock plan maintained by, or covering
employees of, the Bank, even if he is not vested under such
plan.
The
Bank and Mr. Bradley hereby stipulate that the damages which
may be incurred by Mr. Bradley following any such termination
of employment are not capable of accurate measurement as of
the date first above written and that the payments and
benefits contemplated by this section 9(b) constitute
reasonable damages under the circumstances and shall be
payable without any requirement of proof of actual damage and
without regard to Mr. Bradley’s efforts, if any, to
mitigate damages. The Bank and Mr. Bradley further agree that
the Bank may condition the payments and benefits (if any) due
under sections 9(b)(iii), (iv), (v), (vi) and (vii) on the
receipt, not later than thirty (30) days after termination of
employment, of Mr. Bradley’s resignation from any and
all positions which he holds as an officer, director or
committee member with respect to the Bank, the Holding Company
or any subsidiary or affiliate of either of them; provided
that the Bank requests such resignations in writing not later
than twenty (20) days after termination of
employment.
Section 10.
Termination without Additional Bank
Liability
.
In
the event that Mr. Bradley’s employment with the Bank
shall terminate during the Employment Period on account
of:
(a)
the
discharge of Mr. Bradley for “cause,” which, for
purposes of this Agreement shall mean personal dishonesty,
incompetence, willful misconduct, brea
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