Exhibit 10.11
Employment Agreement between C. Thomas Chalstrom and First
Federal Savings Bank of Iowa
FIRST FEDERAL SAVINGS BANK OF IOWA
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of
March
29, 2005 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 C. Thomas
Chalstrom, an individual residing at 1020 N 19th St., Fort Dodge,
Iowa ("Mr.
Chalstrom").
W I T N E S S E T H :
WHEREAS, Mr. Chalstrom currently serves the Bank in the capacity
of
President and Chief Operating Officer; and
WHEREAS, the Bank is a wholly owned subsidiary of North Central
Bancshares,
Inc. ("Holding Company"); and
WHEREAS, the Bank desires to employ Mr. Chalstrom in the capacity
of
President and Chief Operating Officer and desires to assure for
itself the
services of Mr. Chalstrom for the period provided in this
Agreement; and
WHEREAS, Mr. Chalstrom is willing to continue to serve the Bank on
the
terms and conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants
and conditions hereinafter set forth, the Bank and Mr. Chalstrom
hereby agree as
follows:
Section 1. Employment.
----------
The
Bank agrees to continue to employ Mr. Chalstrom, and Mr.
Chalstrom
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.
--------------------------------------------------------
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. Chalstrom's performance of
services
hereunder and may, in the absence of objection from Mr. Chalstrom,
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.
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.
Nothing in this Agreement shall be deemed to prohibit the Bank at
any time
from terminating Mr. Chalstrom'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. Chalstrom in the event of any such
termination
shall be determined under this Agreement.
Section 3. Duties.
------
Mr.
Chalstrom shall serve as President and Chief Operating 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. Chalstrom 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.
<PAGE>
Section 4. Cash Compensation.
-----------------
In
consideration for the services to be rendered by Mr. Chalstrom
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.
Chalstrom's annual rate of salary and may, in its discretion,
approve an
increase therein. In addition to salary, Mr. Chalstrom 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. Chalstrom 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. Chalstrom 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. Chalstrom 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 the 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. Chalstrom 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. [No
indemnification shall be paid that would violate 12 U.S.C. 1828(k)
or any
regulations promulgated thereunder, or 12 C.F.R. 545.121.]
Section 7. Outside Activities.
------------------
Mr. Chalstrom 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.
Chalstrom 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. Chalstrom may also serve as
an officer or
director of the Holding Company on such terms and conditions as the
Holding
Company and the Holding Company may mutually agree upon, and such
service shall
not be deemed to materially interfere with Mr. Chalstrom's
performance of his
duties hereunder or otherwise result in a material breach of this
Agreement.
Section 8. Working Facilities and Expenses.
-------------------------------
Mr.
Chalstrom'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.
Chalstrom may
mutually agree upon. The Bank shall provide Mr. Chalstrom 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 Mr. Chalstrom for his
exclusive use an
<PAGE>
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. Chalstrom 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. Chalstrom 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. Chalstrom 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. Chalstrom'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. Chalstrom to the office of President and Chief
Operating
Officer (or a more senior office) of the Bank;
(B) the failure of the stockholders of the Bank to elect or
re-elect Mr. Chalstrom or the failure of the Board (or the
nominating
committee thereof) to nominate Mr. Chalstrom for such election
or
re-election;
(C) the expiration of a thirty (30) day period following the
date
on which Mr. Chalstrom 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. Chalstrom 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. Chalstrom, in his discretion, to be satisfactory;
or
(D) the expiration of a thirty (30) day period following the
date
on which Mr. Chalstrom 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.
Chalstrom'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. Chalstrom 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. Chalstrom'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.
Chalstrom the amounts described in section 9(b).
(b)
Upon the termination of Mr. Chalstrom's employment with the Bank
under
circumstances described in section 9(a) of this Agreement, the Bank
shall pay
and provide to Mr. Chalstrom (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
<PAGE>
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.
Chalstrom, for the Remaining Unexpired Employment Period,
coverage
equivalent to the coverage to which be 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.
Chalstrom's
termination of employment with the Bank;
(iv) within 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. Chalstrom 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. Chalstrom'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"), 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) within 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) within 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. Chalstrom'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 Applicable PBGC Rate;
(vii) the payments that would have been made to Mr. Chalstrom
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. Chalstrom under such incentive compensation
plan;
multiplied by
(B) the salary that would have been paid to Mr. Chalstrom
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.
Chalstrom'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. Chalstrom's
termination
of employment;
(viii) at the election of the Bank made within thirty (30) days
following his termination of employment with the Bank, upon the
surrender
of
options or appreciation rights issued to Mr. Chalstrom under any
stock
option and appreciation rights plan or program maintained by, or
covering
employees of, the Bank, a lump sum payment in an amount equal to
the
product of:
<PAGE>
(A) the excess of (I) the fair market value of a share of stock
of the same class as the stock subject to the option or
appreciation
right, determined as of the date of termination of employment,
over
(II) the exercise price per share for such option or
appreciation
right, as specified in or under the relevant plan, or program;
multiplied by
(B) the number of shares with respect to which options or
appreciation rights are being surrendered.
For
purposes of this section 9(b)(viii) and for purposes of determining
Mr.
Chalstrom's right following his termination of employment with the
Bank to
exercise any options or appreciation rights not surrendered
pursuant
hereto, Mr. Chalstrom 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) at the election of the Bank made within thirty (30) days
following Mr. Chalstrom's termination of employment with the Bank,
upon the
surrender of any shares awarded to Mr. Chalstrom under any
restricted stock
plan
maintained by, or covering employees of, the Bank,
