AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE
AGREEMENT
THIS
AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT is
dated this 14 th day
of December 2007, among First Federal Bancshares of Arkansas,
Inc., a Texas corporation (the "Corporation"), First Federal
Bank, a federally chartered savings bank (the "Bank"), and
Jeffrey L. Brandt (the "Executive"). The
Corporation and the Bank are collectively referred to as the
"Employers".
WITNESSETH
WHEREAS, the Bank was
previously known as First Federal Bank of Arkansas,
F.A.;
WHEREAS,
the Executive is currently employed as the Executive Vice
President-Eastern Division of the Corporation and the Bank,
and the Employers and the Executive have previously entered
into a change in control severance agreement dated January 24,
2006 (the “Prior Agreement”);
WHEREAS, the Employers
desire to amend and restate the Prior Agreement in order to
make changes to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), as
well as certain other changes;
WHEREAS,
the Employers desire to be ensured of the Executive's
continued active participation in the business of the
Employers; and
WHEREAS,
in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing
to remain in the employ of the Employers, the parties desire
to specify the severance benefits which shall be due the
Executive in the event that his employment with the Employers
is terminated under specified circumstances;
NOW
THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter
provided, the parties hereby agree as follows:
1.
Definitions. The following words and
terms shall have the meanings set forth below for the purposes of
this Agreement:
(a)
Annual Compensation. The
Executive's "Annual Compensation" for purposes of this
Agreement shall be deemed to mean the average level of
compensation paid to the Executive by the Employers or any
subsidiary thereof during the most recent five taxable years
preceding the year in which the Date of Termination occurs (or
such shorter period as the Executive was employed) and which
was included in the Executive’s gross income for tax
purposes, including but not limited to the Executive’s
salary, bonuses and all other amounts taxable to the Executive
pursuant to any employee benefit plans of
Employers.
(b)
Cause. Termination of the Executive's
employment for "Cause" shall mean termination because of
personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or
similar offenses), final cease-and-desist order or material
breach of any provision of this Agreement. For
purposes of this paragraph, no act or failure to act on the
Executive's part shall be considered "willful" unless done, or
omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's action or
omission was in the best interests of the
Employers.
(c)
Change in Control. "Change in
Control " shall mean a change in the ownership of the
Corporation or the Bank, a change in the effective control of
the Corporation or the Bank or a change in the ownership of a
substantial portion of the assets of the Corporation or the
Bank, in each case as provided under Section 409A of the Code
and the regulations thereunder.
(d)
Date of Termination. "Date of
Termination" shall mean (i) if the Executive's employment is
terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment
is terminated for any other reason, the date specified in the
Notice of Termination.
(e)
Disability.
“Disability” shall mean the Executive
(i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of
not less than 12 months, receiving income replacement benefits
for a period of not less than three months under an accident
and health plan covering employees of the
Employers.
(f)
Effective Date. The Effective
Date of this Agreement shall mean the date first written
above.
(g)
Good Reason. Termination by the
Executive of the Executive's employment for "Good Reason"
shall mean termination by the Executive following a Change in
Control of the Corporation based on the occurrence of any of
the following events:
(i)
(A) a material diminution in the Executive’s base
compensation as in effect immediately prior to the date of the
Change in Control or as the same may be increased from time to
time thereafter, (B) a material diminution in the
Executive’s authority, duties or responsibilities as in
effect immediately prior to the Change in Control, or (C) a
material diminution in the authority, duties or
responsibilities of the officer (as in effect immediately
prior to the date of the Change in Control) to whom the
Executive is required to report immediately prior to the
Change in Control,
(ii)
any material breach of this Agreement by the Employers,
or
(iii)
any material change in the geographic location at which the
Executive must perform his services under this Agreement
immediately prior to the Change in Control;
provided,
however, that prior to any termination of employment for Good
Reason, the Executive must first provide written notice to the
Employers within ninety (90) days of the initial existence of
the condition, describing the existence of such condition, and
the Employers shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Employers
received the written notice from the Executive. If
the Employers remedy the condition within such thirty (30) day
cure period, then no Good Reason shall be deemed to exist with
respect to such condition. If the Employers do not
remedy the condition within such thirty (30) day cure period,
then the Executive may deliver a Notice of Termination for
Good Reason at any time within sixty (60) days following the
expiration of such cure period.
(h)
IRS. IRS shall mean the Internal
Revenue Service.
(i)
Notice of Termination. Any
purported termination of the Executive's employment by the
Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any
reason, including without limitation for Good Reason, shall be
communicated by a written "Notice of Termination" to the other
party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement
relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall
be not less than thirty (30) nor more than ninety (90) days
after such Notice of Termination is given, except in the case
of the Employers' termination of the Executive's employment
for Cause, which shall be effective immediately; and (iv) is
given in the manner specified in Section 7
hereof.
(j)
Retirement. "Retirement" shall
mean voluntary termination by the Executive in accordance with
the Employers' retirement policies, including early
retirement, generally applicable to the Employers =
salaried employees.
2.
Benefits Upon Termination.
If the Executive's employment by the
Employers shall be terminated subsequent to a Change in
Control of the Corporation by (i) the Employers for
other than Cause, Disability, Retirement or the Executive's
death or (ii) the Executive for Good Reason, then the
Employers shall, subject to the provisions of Section 3
hereof, if applicable,
(A) pay to the
Executive, in a lump sum within ten (10) business days
following the Date of Termination, a cash severance amount
equal to three (3) times the Executive’s Annual
Compensation, and
(B) maintain
and provide for a period ending at the earlier of (i) the
expiration of the remaining term of this Agreement as of the
Date of Termination or (ii) the date of the Executive’s
full-time employment by another employer (provided that the
Executive is entitled under the terms of such employment to
benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the
Executive&rsq
