Exhibit 10.14 Employment
Agreement between C. Thomas Chalstrom and North
Central Bancshares, Inc.
NORTH CENTRAL BANCSHARES, INC.
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of
March
29, 2005 by and between NORTH CENTRAL BANCSHARES, INC., a publicly
held business
corporation organized and operating under the laws of the State of
Iowa and
having an office at 825 Central Avenue, Fort Dodge, Iowa 50501
("Holding
Company") and C. Thomas Chalstrom, an individual residing at 1020 N
19th St.,
Fort Dodge, Iowa 50501("Mr. Chalstrom").
W I T N E S S E T H :
---------------------
WHEREAS, Mr. Chalstrom
currently serves First Federal Savings Bank of Fort
Dodge ("Bank") in the capacity of President and Chief Operating
Officer; and
WHEREAS, the Bank is a wholly owned subsidiary of the Holding
Company; and
WHEREAS, the Holding Company desires to employ Mr. Chalstrom in
the
capacity of Executive Vice President 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 Holding
Company
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 Holding Company and Mr.
Chalstrom
hereby agree as follows:
Section 1. Employment.
----------
The
Holding Company 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.
--------------------------------------------------------
(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 Holding
Company ("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.
(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 Holding
Company 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 Holding Company and Mr. Chalstrom in
the event of
any such termination shall be determined under this Agreement.
Section 3. Duties.
------
Mr.
Chalstrom shall serve as Executive Vice President of the
Holding
Company, having such power, authority and responsibility and
performing such
duties as are prescribed by or under the By-Laws of the Holding
Company 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 Holding Company and shall use his best
efforts to
advance the interests of the Holding Company.
<PAGE>
Section 4. Cash Compensation.
-----------------
In
consideration for the services to be rendered by Mr. Chalstrom
hereunder, the Holding Company 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 Holding Company'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 Holding Company 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 Holding Company 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 Holding Company, in accordance with the terms and conditions of
such
employee benefit plans and programs and compensation plans and
programs and
consistent with the Holding Company's customary practices.
Section 6. Indemnification and Insurance.
-----------------------------
(a)
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 Holding Company 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 Holding Company or service in other
capacities at the
request of the Holding Company. 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 Holding Company.
(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 Holding Company 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 Holding Company 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 Holding Company and
generally
applicable to all similarly situated executives. Mr. Chalstrom may
also serve as
an officer or director of the Bank on such terms and conditions as
the Holding
Company and the Bank 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
Holding Company's executive offices at the address first above
written, or at
such other location within Webster County, Iowa at which the
Holding Company
shall maintain its principal executive offices, or at such other
location as the
Holding Company and Mr. Chalstrom may mutually agree upon. The
Holding Company
shall provide Mr. Chalstrom at his principal place of employment
with a private
office,
<PAGE>
secretarial services, and other support services and facilities
suitable to his
position with the Holding Company and necessary or appropriate in
connection
with the performance of his assigned duties under this Agreement.
The Holding
Company shall provide to Mr. Chalstrom for his exclusive use an
automobile owned
or leased by the Holding Company and appropriate to his position,
to be used in
the performance of his duties hereunder, including commuting to and
from his
personal residence. The Holding Company 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 Holding
Company 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 Holding Company of an itemized account of such
expenses in
such form as the Holding Company 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 Holding Company
terminates
during the Employment Period under any of the following
circumstances:
(i) Mr. Chalstrom's voluntary resignation from employment with
the
Holding Company 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 Executive Vice President
(or a
more senior office) of the Holding Company;
(B) the failure of the stockholders of the Holding Company 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 Holding Company
of
its material failure, whether by amendment of the Holding
Company's
Articles of Incorporation or By-laws, action of the Board or
the
Holding Company'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
Holding Company 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 Holding Company
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 Holding Company fully cures
such
failure; or
(ii) the termination of Mr. Chalstrom's employment with the
Holding Company for any other reason not described in section
10(a).
In such event, then, the Holding Company 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
Holding
Company under circumstances described in section 9(a) of this
Agreement, the
Holding Company 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 Holding Company, 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;
<PAGE>
(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 Holding
Company'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. 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
Holding Company 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 Holding Company;
(iv) within thirty (30) days following his termination of
employment
with
the Holding Company, 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 Holding Company 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 Holding Company, 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 Holding Company'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 Holding Company, 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); where such present values are to be determined using
the
mortality tables prescribed under section 415(b)(2)(E)(v) of the
Code and a
discount rate, compounded monthly, equal to the annualized rate of
interest
prescribed by the Pension Benefit Guaranty Corporation for the
valuation of
immediate annuities payable under terminating single-employer
defined
benefit plans for the month in which Mr. Chalstrom's termination
of
employment occurs ("Applicable PBGC Rate");
(vi) within thirty (30) days following his termination of
employment
with
the Holding Company, 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 Holding Company, if he were 100% vested
thereunder and
had
continued working for the Holding Company 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 Holding Company, 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 Holding Company if he
had
continued working for the Holding Company 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:
<PAGE>
(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 Holding Company;
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 Holding Company made within thirty
(30)
days
following his termination of employment with the Holding Company,
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 Holding Company, a lump sum payment
in an
amount equal to the product of:
(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
Holding
Company 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 Holding
Company,
even
if he is not vested under such plan or program;
(ix) at the election of the Holding Company made within thirty
(30)
days
following Mr. Chalstrom's termination of employment with the
Holding
Company, upon the surrender of any shares awarded to Mr. Chalstrom
under
any
restricted stock plan maintained by, or c
