EXHIBIT 10.2
MID AMERICA BANK
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
Amended and Restated Employment Agreement (this
“Agreement”), made as of April 19, 1990, as previously
amended from time to time, is hereby amended and restated effective
as of January 1, 2007, by and between Mid America Bank, fsb
(the “Bank”), a federally chartered savings bank, with
its office at 55th & Holmes Avenue, Clarendon Hills, Illinois,
and Allen H. Koranda (“Executive”). The Bank is the
wholly owned subsidiary of MAF Bancorp, Inc. (the
“Company”), a corporation organized under the laws of
the State of Delaware.
WHEREAS,
the Bank recognizes the responsibility Executive has with the Bank
and wishes to protect his position therewith for the period
provided in this Agreement;
WHEREAS,
Executive has been appointed to, and has agreed to serve in the
position of Chief Executive Officer, a position of substantial
responsibility with the Bank;
WHEREAS,
the expiration date of this Agreement was previously extended by
action of the Board of Directors of the Bank to December 31,
2008;
WHEREAS,
the Board has approved a further extension hereof until December
31, 2009, subject to amending and restating the Employment
Agreement as provided for herein to, among other things,
incorporate prior amendments and reflect appropriate updating, to
clarify the intent of certain provisions, to modify the calculation
of severance benefits and to obtain for the benefit of the Bank
certain restrictive covenants from Executive;
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 Chief Executive Officer of the Bank. The Executive shall render
management services to the Bank such as are customarily performed
by persons in a similar executive capacity. During said period,
Executive also agrees to serve, if elected, as an officer of any
subsidiary or affiliate of the Bank.
2. TERMS
AND DUTIES.
(a) The
term of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue through
December 31, 2009, subject to the extension of such term as
hereinafter provided and subject to other termination as provided
in Sections 4, 5, 6, 7 and 8. The term of this Agreement shall
be extended for an additional year as of December 31, 2007 and each
December 31 thereafter, such
that the remaining term is three
(3) years as of such December 31; provided that not later than the
March 31 following such December 31, the Board of Directors of the
Bank (the “Board”) has taken action to approve such
extension following an annual review of this Agreement and
Executive’s performance by the Administrative/Compensation
Committee of the Board for purposes of making a recommendation to
the Board whether to extend this Agreement, and the results thereof
shall be included in the minutes of the Board’s meeting. The
Board’s decision whether or not to extend this Agreement
shall be promptly communicated to the Executive. In the event the
Executive desires not to extend the Agreement for an additional
period, the Executive shall provide the Bank with written notice at
least ten (10) days and not more than twenty (20) days prior to the
end of such calendar year. If either the Bank or the Executive
chooses not to extend the Agreement for an additional period, the
Agreement shall cease at the end of its remaining term or, if
earlier, upon Executive’s termination of
employment.
(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 and its affiliates; provided, however, that Executive
may hold other offices or positions, including directorships, in
companies or organizations, which do not present any conflict of
interest with the Bank or its affiliates, do not adversely affect
the performance of Executive’s duties and in all cases are
consistent with the Company’s Corporate Code of Ethics;
provided, however, Executive’s commitments to and holding of
such other offices or positions shall be subject to review and
nullification by the Nominating and Corporate Governance Committee
of the Board.
3.
COMPENSATION.
(a) The
Bank shall pay Executive an annual salary of $461,500 (“Base
Salary”) which shall be reviewed at least annually by the
Committee. The Base Salary may be increased but may not be
decreased from the Base Salary amount then in effect without the
prior written consent of Executive or unless such decrease is in
proportion to a general reduction in salary affecting all executive
officers of the Bank.
(b) In
addition to the payment of a Base Salary, Executive will be
entitled to participate in, and be eligible to receive benefits or
grants under, any employee benefit plan or program that is offered
to executive officers of the Bank, including, but not limited to,
annual bonus programs, long-term bonus programs, equity incentive
awards, supplemental executive retirement plans and deferred
compensation plans, with such participation, eligibility, benefits
and grants determined on a basis consistent with Executive’s
position described in Section 1.
(c) In
addition to the compensation provided in Sections 3(a) and
3(b), the Bank shall provide Executive with such other benefits as
are provided to other full-time employees of the Bank, including
but not limited to, participation in ESOP, profit-sharing and
401(k) plans, medical, dental, disability and life insurance plans,
subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements as in effect
from time to time. In addition, the Executive shall have the use of
a company automobile and the
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Bank shall pay or reimburse
Executive for all reasonable business travel and related expenses
incurred by Executive.
4.
PAYMENTS TO EXECUTIVE UPON TERMINATION OF EMPLOYMENT.
The
provisions of this Section shall in all respects be subject to
the terms and conditions stated in Sections 8, 15, 24 and
25.
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(a)
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Upon the
occurrence of an Event of Termination (as herein defined) during
the Executive’s term of employment under this Agreement, the
provisions of this Section 4 shall apply. As used in this
Agreement, an “Event of Termination” shall mean and
include any one or more of the following: (i) the termination
by the Bank or the Company of Executive’s employment
hereunder for any reason other than when such termination follows a
Change in Control (as defined in Section 5(a) hereof) or when
such termination is a Termination for Cause (as defined in
Section 8 hereof); (ii) Executive’s resignation
from the Bank’s employ (in accordance with the procedures
outlined in this Section 4(a)), following any (A) failure
to re-appoint Executive as Chief Executive Officer without the
consent of the Executive, unless Executive is appointed to a
position of greater authority, responsibility and title, or the
failure to re-appoint or re-elect Executive as a member of the
Board, without the consent of Executive, (B) material change
in Executive’s function, duties, or responsibilities
(including any series of changes which in the aggregate amount to a
material change), which causes Executive’s position to become
one of lesser responsibility, importance, or scope, or
(C) breach of this Agreement by the Bank. Upon the occurrence
of any event described in clause (A), (B) or (C) above,
Executive shall, within 120 days of the occurrence of such event,
give notice of such event to the Bank. The Bank shall thereafter
have 10 business days to cure such material change or breach. If
such material change or breach is not cured within this timeframe,
Executive shall have the right, within 60 days of the end of the
cure period, to terminate his employment under this Agreement.
Failure of Executive to give notice to the Bank of the event
described in clause (A), (B) or (C) within the specified timeframe
or failure of Executive to terminate his employment within the
proper timeframe shall constitute a waiver by Executive of such
event. In the event of Executive’s death (i) following the
date the Executive has given notice of an event described in clause
(A), (B) or (C) above within the required 120-day period (unless,
prior to such death, the Bank has cured the material change or
breach or commenced action to so cure the material change or breach
within the required 10-day period), or (ii) after Executive has
resigned his employment within the 60-day period following the end
of the cure period, an Event of Termination shall be deemed to have
occurred immediately prior to the date of Executive’s
death.
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(b)
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Upon the
occurrence of an Event of Termination, 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:
(i) the compensation the Executive would be entitled to receive
during the term of the Agreement remaining as of the date
immediately prior to the Date of Termination (defined below) or
(ii) the Executive’s three (3) preceding years’
compensation, which three-year period shall end on the last day of
the month immediately preceding the Date of Termination. For
purposes of clause (i) of the preceding sentence, compensation
shall include the amount of Base Salary which Executive would be
entitled to receive pursuant to Section 3(a) during the applicable
period (determined prior to any general reduction occurring within
one year prior to the Event of Termination or any reduction which
gave rise to the Event of Termination) plus a target annual cash
bonus amount for each calendar year ending within the applicable
period,
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which target
annual cash bonus amount for each such year shall be equal to the
target annual cash bonus amount for the calendar year in which the
Date of Termination occurs (regardless of whether the actual annual
cash bonus payment for any such year is less than or more than such
target annual cash bonus amount, and without proration). For
purposes of clause (ii) above, compensation shall include the
amount of Base Salary which Executive received during the
applicable period (or was entitled to receive under Section 3(a)
prior to any general reduction occurring within one year prior to
the Event of Termination or any reduction which gave rise to the
Event of Termination) plus a target annual cash bonus amount for
each calendar year commencing within the applicable period, which
target annual cash bonus amount for each such year shall be equal
to the target annual bonus amount established for the Executive
with respect to such year (regardless of whether the actual annual
cash bonus payment for any such year was less than or more than
such target annual cash bonus amounts, and without proration).
Subject to any delay required to comply with Code Section 409A,
such payments shall be made in a lump sum within five
(5) business days of the Date of Termination relating to such
Event of Termination, unless Executive has made a prior election
(in accordance with procedures established by the Committee and in
compliance with Code Section 409A) to have such payments made in
thirty-six (36) monthly installments (without interest)
beginning with the month following the month of Executive’s
termination. Notwithstanding the foregoing, if the Bank is not in
compliance with its minimum regulatory capital requirements, such
payments shall be deferred until such time as the Bank is in
capital compliance.
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(c)
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Upon the
occurrence of an Event of Termination, the Bank will cause to be
continued medical, dental, disability and life insurance coverage
substantially identical (including coverage amounts, co-pays,
deductible amounts and maximum out-of-pocket amounts) to the
coverage that would have been provided by the Bank for the
Executive and his dependents from time to time in accordance with
Section 3(c) if Executive’s employment had continued
hereunder. The Bank’s obligation and the Executive’s
entitlement to continued medical and dental coverage shall be
governed by the provisions of Section 7 below. With respect to
disability and life insurance coverage, Executive shall be
obligated to continue to pay, on a monthly basis, the portion of
the cost of such insurance coverage that he would be required to
pay if his employment had continued. Such continuing insurance and
payment arrangements for disability and life insurance coverage
shall continue until the earlier of: (i) the date Executive
fails to remit to the Bank the required monthly premium amount for
such insurance coverage within a thirty (30) day grace period
of when such payment is due (or, if later, within thirty (30) days
after Executive is informed of the payment due); (ii) the date
Executive obtains insurance coverage from another employer that is
not less than that provided by the Bank; (iii) the date of
Executive’s death; (iv) age 65; or (v) sixty
(60) months from the Date of Termination relating to the Event
of Termination.
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(d)
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In addition to
the other benefits provided by this Section 4, Executive shall
be entitled to a lump-sum payment of his accrued vacation benefits
through the date of Executive’s termination. Executive shall
also be entitled to all other payments or benefits to which he may
be entitled under the terms of any applicable compensation
arrangement or benefit, or fringe benefit plan, program or
grant.
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(a)
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No benefit
shall be payable under this Section 5 unless there shall have
been a Change in Control of the Bank or Company, as set forth
below, and benefits under this Section 5 shall in all respects be
subject to the terms and conditions stated in Sections 15, 24 and
25. For purposes of this Agreement, a “Change in
Control” of the Bank or Company shall mean:
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(i)
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an event that
would be required to be reported in response to Item 5.01 of the
current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”);
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(ii)
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an event that
results in a change in control of the Bank or the Company within
the meaning of the Home Owners Loan Act of 1933, as amended, and
the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date
hereof, including section 574 of such regulations;
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(iii)
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at such time as
any “person” (as the term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities or makes
an offer to purchase and completes the purchase of securities of
the Bank or the Company representing 20% or more of the
Bank’s or the Company’s outstanding securities
ordinarily having the right to vote at the election of directors
except for (A) any securities of the Bank owned by the
Company, or (B) any securities purchased by the employee stock
ownership plan and trust of the Company or a subsidiary;
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(iv)
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at such time
that individuals who constitute the Company’s Board of
Directors on the date hereof (the “Incumbent Board”) or
the Board of Directors of the Bank on the date hereof (the
“Bank Incumbent Board”), cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election
was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board or Bank Incumbent Board, as the case
may be, or whose nomination for election by the stockholders was
approved by the Nominating Committee serving under the Incumbent
Board or the Bank Incumbent Board, shall be, for purposes of this
clause (iv), considered as though such individual was a member of
the Incumbent Board or the Bank Incumbent Board, as the case may
be;
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(v)
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consummation of
a reorganization, merger, consolidation, sale of all or
substantially all the assets of the Bank or Company or similar
transaction occurs (each a “Business Combination”) that
results in a change of control. A Business Combination will not be
deemed to result in a change of control if: (A) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the voting stock immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the total voting power represented by
the voting securities entitled to vote generally in the election of
directors of the resulting entity from the Business Combination
(including, without limitation, an entity, which as a result of
such transaction, owns the Bank or Company or all or substantially
all of the Bank’s or Company’s assets either directly
or through one or more subsidiaries) in substantially
the
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same
proportions of such voting power as their ownership of the voting
stock immediately prior to the Business Combination, and
(B) at least a majority of the members of the board of
directors of the resulting entity from the Business Combination
were members of the Incumbent Board or Bank Incumbent Board,
respectively, at the time of the execution of the initial
agreement, or action of the Incumbent Board or Bank Incumbent
Board, providing for such Business Combination;
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(vi)
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a proxy
statement shall be distributed soliciting proxies from stockholders
of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization,
merger or consolidation of the Company or Bank or similar
transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to such
plan or transaction are exchanged for or converted into cash or
property or securities not issued by the Company and such proxy
statement proposal is approved by the shareholders of the Company;
or
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(vii)
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a tender offer
is made and completed for 20% or more of the outstanding securities
of the Company.
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(b)
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If any of the
events described in Section 5(a) hereof constituting a Change
in Control has occurred and is followed by Executive’s
voluntary or involuntary termination of employment (including for
reasons of death but excluding a Termination for Cause) upon or
within two (2) years of the date of the Change in Control,
Executive (or, as applicable, his beneficiary, beneficiaries or
estate) shall be entitled to the benefits provided in paragraphs
(c), (d), (e) and (f) of this Section 5.
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(c)
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Upon the
occurrence of a Change in Control followed by the Executive’s
termination of employment as described in Section 5(b), the
Bank or its successor shall pay Executive, or in the event of his
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 Executive’s three (3) preceding
years’ compensation, which three-year period shall end on the
last day of the month immediately preceding the month in which the
Executive’s Date of Termination occurs, or, if such amount is
greater, the last day of the month immediately preceding the date
of the Change in Control. For purposes of the preceding sentence,
compensation shall include the amount of Base Salary which
Executive received during the applicable period (or was entitled to
receive under Section 3(a) prior to any general reduction occurring
within one year prior to the Event of Termination or any reduction
which gave rise to the Event of Termination) plus a target annual
cash bonus amount for each calendar year commencing within the
applicable period, which target annual cash bonus amount for each
such year shall be equal to the target annual bonus amount
established for the Executive with respect to such year (regardless
of whether the actual annual cash bonus payment for any such year
was less than or more than such target annual cash bonus amounts,
and without proration). Subject to any delay required by Section
409A, such payments shall be made in a lump sum within five
(5) business days of Executive’s Date of Termination
relating to such termination of employment, unless Executive has
made a prior election (in accordance with procedures established by
the Committee) to have such payments made in thirty-six
(36) monthly installments (without interest) beginning with
the month following the month of Executive’s
termination.
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(d)
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Upon the
occurrence of a Change in Control followed by the termination of
the Executive’s employment in accordance with Section 5(b),
the Bank will cause to be continued medical, dental, disability and
life insurance coverage substantially identical (including coverage
amounts, co-pays, deductible amounts and maximum out-of-pocket
amounts) to the coverage that would have been provided by the Bank
for the Executive and his dependents from time to time in
accordance with Section 3(c) if Executive’s employment had
continued hereunder. The Bank’s obligation and the
Executive’s entitlement to continued medical and dental
coverage shall be governed by the provisions of Section 7 below.
With respect to disability and life insurance coverage, Executive
shall be obligated to continue to pay, on a monthly basis, the
portion of the cost of such insurance coverage that he would be
required to pay if his employment continued. Such continuing
insurance and payment arrangements for disability and life
insurance coverage shall continue until the earlier of:
(i) the date Executive fails to remit to the Bank the required
monthly premium amount for such insurance coverage within a thirty
(30) day grace period of when such payment is due (or, if
later, within thirty (30) days after Executive is informed of the
payment due); (ii) the date Executive obtains insurance
coverage from another employer that is not less than that provided
by the Bank; (iii) the date of Executive’s death;
(iv) age 65; or (v) sixty (60) months from the Date
of Termination relating to such termination of
employment.
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(e)
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In addition to
the other benefits provided by this Section 5, Executive shall
be entitled to a lump-sum payment of his accrued vacation benefits
through the date of Executive’s termination. Executive shall
also be entitled to all other payments or benefits to which he may
be entitled under the terms of any applicable compensation
arrangement or benefit, or fringe benefit plan, program or
grant.
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(f)
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Notwithstanding
the preceding paragraphs of this Section 5, in the event it
shall be determined that any payment or distribution of any type to
or for the benefit of the Executive by the Bank, any of its
affiliates, or any person who acquires ownership or effective
control of the Bank or the Company or ownership of a substantial
portion of the Bank’s or Company’s assets (within the
meaning of Section 280G of the Code, and the regulations
thereunder) or any affiliate of such person, whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (the “Total Payments”), is
subject to the excise tax imposed by Section 4999 of the Code
or any similar successor provision or any interest or penalties
with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the
“Excise Tax”), then, except in the case of a Deminimus
Excess Amount (as described below), the Executive shall be entitled
to receive an additional payment (a “Gross Up Payment”)
in an amount such that after payment by the Executive of all taxes
imposed upon the Gross-Up Payment (including any federal, state and
local income, payroll or excise taxes and any interest or penalties
imposed with respect to such taxes), the Executive ret
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