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8-K - FORM 8-K - ANCHOR BANCORP WISCONSIN INC | c65234e8vk.htm |
Exhibit 10.1
CHRIS M. BAUER
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into as of this 29th day of June, 2011, effective as of June 23 2011
(the Effective Date) by and among ANCHORBANK FSB, a federally-chartered depository
financial institution having its principal office in Madison, Wisconsin (hereinafter referred to as
AnchorBank or Bank), Anchor BanCorp Wisconsin, Inc., a Wisconsin corporation (the Company),
and CHRIS M. BAUER (hereinafter referred to as the Employee).
W I T N E S E T H:
WHEREAS, AnchorBank is in the banking business, providing a variety of financial services to
its customers, including but not limited to residential, commercial and consumer loans and
investments services throughout the State of Wisconsin.
WHEREAS, the AnchorBank wishes to assure itself of the services of the Employee for a
twenty-four (24) month period in the capacity of President and Chief Executive Officer and Employee
wishes to serve in the employ of the Bank in such a capacity;
And
WHEREAS, the parties agree upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set
forth, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Position. The Employee shall serve the Bank as its President and Chief Executive
Officer and shall serve the Company in the same capacities (the Bank and Company may be referred to
collectively herein as the Employer). The Employee hereby represents that he is not bound by any
confidentiality agreements or restrictive covenants which restrict or may restrict his ability to
perform his duties hereunder, and agrees that he will not enter into any such agreements or
covenants during the term of his employment hereunder, except such restrictive covenants or
confidentiality agreements as are required by the Bank and/or Company. The Employee shall report to
the respective Boards of Directors of the Bank and Company. The starting date of the position for
purposes of this Agreement shall be its Effective Date of June 23, 2011.
2. Duties. Employee shall serve the Bank and Company, respectively, as their
President and Chief Executive Officer. As such, Employee shall report directly to the Boards of
Directors of each of the Employers. Employee shall be nominated as a management candidate for
election to said boards upon expiration of his terms on each and shall continue to be so nominated
while this Agreement remains in effect; provided that upon termination of such employment he shall
tender his resignation from each of said Boards. While employed, Employee shall serve as a member
of the Banks and Companys Management Committees and be generally responsible for rendering
executive, policy-making and other management services of the type customarily performed by persons
serving in similar capacities at other institutions, together with such other duties and
responsibilities as may be appropriate to Employees position
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and as may be from time to time determined by the respective Boards of Directors to be
necessary and in accordance with their applicable bylaws.
3. Location of Performance of Duties. It is anticipated that Employee will perform
his job duties at the corporate offices located in Madison, Wisconsin, except to the extent his
duties may from time to time require his presence at branch offices or other locations.
4. Conduct. The Employee shall at all times during his employment:
4.1 Observe and conform to all federal, state and local laws;
4.2 Comply with all Bank employment policies applicable to employees, including the Banks
then-current Employee Handbook (the Employee Handbook);
4.3 Accept and carry out all reasonable directions and orders of the Boards of Directors of
the Bank and Company;
4.4 Otherwise act in a professional manner, setting the example of excellence to the
workforce, government officials and agencies, and community.
5. Reports. The Employee shall prepare or provide for the preparation of any reports
requested by the Boards of Directors of the Bank or Company, or as otherwise required consistent
with the discharge of his duties, on a timely basis.
6. Term of Employment and Compensation.
6.1 Term of Employment. The Bank shall employ Employee for a period of two (2) years,
running from the Effective Date through June 22, 2013, except as otherwise provided.
6.2 Salary. The Employees salary shall be $700,000.00 per annum, payable by the Bank
at the rate of $58,333.33 monthly, in accordance with the Banks normal payroll procedures;
provided, however, that such amount may be prorated between the Bank and Company in such proportion
as may be determined by their Boards of Directors to appropriately reflect the allocation of
Employees time between them.
6.3 EESA/ARRA. The Agreement is intended to comply with rules and regulations
pertaining to executive compensation under the Emergency Economic Stabilization Act of 2008 (EESA),
as amended by the American Recovery and Reinvestment Act of 2009 (the ARRA) and any amendments
thereto and regulations which may have impact on the Agreement, including those regulations which
became effective upon issuance by the U.S. Department of Treasury as 31 C.F.R. Part 30 on or about
June 15, 2009 (the Regulations). Effective during the period in which any obligation of the
Company arising from financial assistance provided under the United States Treasurys Troubled
Assets Relief Program (TARP) remains outstanding (but not including any period during which the
Federal Government only holds warrants to purchase common stock of the Company), such that the
Company is subject to Section 111 of EESA (the TARP Participation Period), Employer shall not,
and shall not be obligated to, pay or accrue any bonus, retention award or incentive compensation
or make any payment for Employees departure from the Employer for any reason (except for payments
for services performed or benefits accrued) to or for Employee to the extent prohibited by Section
111 of EESA or the Regulations. If in the opinion of tax or regulatory counsel selected by
Employer
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and acceptable to Employee, it is necessary to limit or reduce Employees compensation
pursuant to this Section 6.3, the Bank shall take all reasonable steps to restructure this
Agreement and Employees compensation and benefits in a manner intended to compensate the Employee
according to the original provisions and intent of this Agreement. This restructuring may, to the
extent permissible under EESA and/or the Regulations, include (a) delaying payments during the TARP
Participation Period to a time when the Bank is no longer subject to Section 111 of EESA, or (b)
implementing payments or programs not originally contemplated by the parties. If in the opinion of
such counsel there are payments or amounts not capable of restructuring, such amounts or payments
shall be deemed waived by Employee and Employee agrees to accept such waiver; provided, however,
that if Employee believes such opinion to be incorrect, (A) the Bank shall pay to the Employee the
maximum amount of payments and benefits which such opinion indicates there is a high probability do
not result in any such payment and benefits being in violation of EESA and/or the Regulations, and
(B) the Bank may request, and Employee shall have the right to demand, that Employer request a
ruling from the IRS or other applicable regulatory authority as to whether the disputed payments
have such consequences. Any such request for a ruling shall be promptly prepared and filed by the
Bank, but in no event later than thirty (30) days from the date of the Employees request as
referred to above, and shall be subject to Employees approval prior to filing, which shall not be
unreasonably withheld. The Bank and Employee agree to be bound by any ruling received and to make
appropriate payments to each other to reflect the impact of EESA and the Regulations on payments
made or to be made as reflected by such rulings, together with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code.
In the event the Bank ceases to be subject to ARRA and/or Section 111 of EESA and the
Regulations for any reason, any limitations on amounts or payments to Employee imposed by this
Section 6.3 shall cease to be effective. The parties to this Agreement recognize that further
regulations under AARA and EESA, in addition to the Regulations, may affect the amounts that may be
paid under this Agreement and agree that, upon issuance of any such further regulations this
Agreement may be modified as is in good faith deemed necessary in light of the provisions of such
regulations to achieve the intent and purposes of this Agreement, and that consent to such
modifications shall be unreasonably withheld.
7. Expense Reimbursement. During the term of this Agreement, the Bank shall reimburse
the Employee for all reasonable and necessary out-of-pocket expenses incurred, such as mileage for
commuting at the IRS approved rate, lodging, meals and other job and travel-related expenses,
including assistance with respect to Madison living quarters or other expense items as determined
by the Bank with the Banks prior written approval, by the Employee in connection with the
performance of his duties hereunder, upon the presentation of proper accounts therefore in
accordance with Bank policies. Such reimbursement will be due within ten (10) days after the
Banks receipt of Employees request for reimbursement.
8. Benefits. During the term of this Agreement, the Employee shall be entitled to the
employee benefits as provided in the Employee Handbook, dated October 1, 2009 and as updated by
Employer from time to time. Employee, if he satisfies the conditions for eligibility, will be
eligible to receive such other benefits that are or become available to employees with the similar
job titles and job classifications including, but not limited to, stock options, restricted stock
grants, and participation in excess benefit plans, as the same may be authorized, approved or
adopted by the Board of Directors. In addition, Employee shall be entitled to use of an automobile
provided by Employer under the terms of such corporate automobile policy as it may from time to
time authorize and maintain in effect.
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9. Termination of Employment. Employees employment may be terminated by the Bank or
Employee before the end of the term of the Agreement, as follows:
(a) | By Bank. Employee can be terminated by the Banks Board of Directors at any time by written notice during the term of this Agreement for Cause or for any other reason. For purposes of a termination for Cause, Cause shall mean any termination because of Employees 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) or final cease and desist order, or material breach of any provision of this contract. Should Employee be terminated for Cause under this provision, Employee will not be eligible to receive any further compensation or benefits for any period after such termination. | ||
(b) | By Employee Resignation. If Employee voluntarily resigns from the Bank, Employee agrees to give at least thirty (30) days advance written notice to the Bank. Employee agrees to continue to provide services consistent with the terms of this Agreement throughout such thirty (30) day notice period if so requested by the Bank or Company (or for such longer period on which the Employee and Employer may agree) and to work with any person designated by the Boards as a replacement for Employee to (i) wind up those matters with which Employee is involved which are capable of resolution within the notice period, and (ii) assist in the training of a replacement and in the transitioning of those matters not capable of being wound up within the notice period. In consideration of continuing to provide such services, together with providing assistance in winding up and transitioning of matters and contingent upon Employee providing the same for thirty (30) days or for any longer period as agreed upon, the Bank agrees to pay Employee an amount equal his salary for the period for which such services were provided. | ||
(c) | Death, Retirement or Disability. (i) This Agreement shall terminate upon the death or retirement of Employee. As used herein, the term retirement shall mean Employees retirement in accordance with any retirement arrangement established with Employees consent. | ||
If termination occurs as the result of death or retirement, no additional compensation shall be payable under this Agreement, except that Employee shall receive all compensation and other benefits to which he was entitled as the result of service through the Termination Date together with such other benefits available to him under Applicable benefit plans and programs to which he was entitled by reason of employment through the Termination Date. | |||
(ii) | As used in this Agreement, disability means: (A) the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (B) the Employee is, by reason of |
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any medically determinable physical or mental impairment that 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 Employer. Any question as to the existence of Employees disability upon which Employee and Employer cannot agree shall be determined by a qualified independent physician mutually agreeable to Employee and Employer or, if the parties are unable to agree upon a physician within ten (10) days after notice from either to the other suggesting a physician, by a physician designated by the then president of the medical society for the county in which Employee maintains his principal residence. The costs of any such medical examination shall be borne by the Employer. If Employee is unable to continue active employment due to disability, he shall be paid 75% of his Base Salary for the lesser of one year or the remainder of the Employment Term (such amounts to be offset by any monthly payments actually received by Employee during the payment period from (Y) any disability plans provided by the Employer, and/or (Z) any governmental social security or workers compensation program) with his employment terminating at the end of such period. | |||
If termination occurs as the result of disability, no additional compensation shall be payable under this Agreement, except that Employee shall receive all compensation and other benefits to which he was entitled as the result of service through the Termination Date together with such other benefits available to him under applicable benefit plans and programs to which he was entitled by reason of employment through the Termination Date. | |||
(d) | Suspension or Termination Required by the OTS or FDIC. |
(A) If Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Employers affairs by a notice served
under Section 8(e)(3), or Section 8(g)(1), of the Federal Deposit Insurance
Act [12 U.S.C. § 1818(e)(3) and (g)(l)], the Banks obligations under the
Agreement shall be suspended as of the date of service of the notice unless
stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank shall (i) pay Employee all of the compensation withheld
while their obligations under this Agreement were suspended, and (ii)
reinstate such obligations as were suspended.
(B) If Employee is removed and/or permanently prohibited from participating
in the conduct of the Employers affairs by an order issued under Section
8(e)(4) or Section 8(g)(1) of the Federal Deposit Insurance Act [12 U.S.C. §
1818(e)(4) or (g)(1)], all obligations of the Bank under the Agreement shall
terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
(C) If the Bank is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act [12 U.S.C. 1813 (x)(1)], all obligations under
the
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Agreement shall terminate as of the date of default, but this paragraph
shall not affect any vested rights of the Employee.
(D) All obligations under the Agreement shall be terminated, except to the
extent determined that continuation of the contract is necessary for the
Employers continued operations (i) by the Director of the OTS, or his or
her designee at the time the FDIC or Resolution Trust Corporation (RTC)
enters into an agreement to provide assistance to or on behalf of the
Employer under the authority contained in Section 13(c) of the Federal
Deposit Insurance Act or (ii) by the Director of the OTS, or his or his
designee, at the time it approves a supervisory merger to resolve problems
related to operation of the Employer or when the Employer are determined by
the Director of the OTS to be in an unsafe or unsound condition. Any rights
of the parties that have already vested, however, shall not be affected by
such action.
(E) In the event that 12 C.F.R. § 563.39, or any successor regulation, is
repealed, this Section 9(d) shall cease to be effective on the effective
date of such repeal. In the event that 12 C.F.R. § 563.39, or any successor
regulation, is amended or modified, this Agreement shall be revised to
reflect the amended or modified provisions if: (1) the amended or modified
provision is required to be included in this Agreement; or (2) if not so
required, the Employee requests that the Agreement be so revised.
10. Confidential Information.
10.1 Non-Disclosure. Employee acknowledges that AnchorBank is engaged in a highly
competitive industry which draws customers primarily from the local communities both in and
surrounding the locations of its corporate and branch offices throughout the State of Wisconsin.
AnchorBank has a proprietary interest in its information, including without limitation, data and
plans pertaining to marketing/strategic/business planning, pricing information, training, and
personnel information, all of which are highly confidential and/or constitute trade secrets.
Employee further acknowledges that AnchorBank obtains and compiles, at significant expense, highly
sensitive customer information, including, but not limited to, customer names, addresses, telephone
numbers, social security numbers, account numbers, and asset and/or investment information, such as
name, nature and amount of assets, date of transactions and other such information and that
AnchorBank has developed and implemented comprehensive security measures to protect such
information from unauthorized disclosure, which are required under federal, specifically, the Gramm
Leach Bliley Statute, and implementing regulations, known as Regulation P Privacy of Consumer
Financial Information.
10.2 Employee acknowledges that such confidential and proprietary information is contained at
AnchorBanks offices, in AnchorBanks computer network systems, and other electronic communication
devices which Employee may be given access.
10.3 Employee acknowledges that such confidential and proprietary information is owned and
shall continue to be owned by AnchorBank. Except as provided in this Section 10, Employee agrees:
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10.3.1 During the term of his employment and for a period of one (1) year after such
employment terminates, not to use such information for any purpose whatsoever or to divulge
such information to any person other than AnchorBank or persons to whom AnchorBank has given
its consent unless such information has already become common knowledge or unless Employee
is compelled to disclose it by governmental process;
10.3.2 To the extent that such information constitutes information protected by the
Uniform Trade Secrets Act, Section 134.90, Wis. Stats., Employee agrees not to use or
divulge such information, during the term of his employment and thereafter indefinitely,
until such information is no longer protected by the foregoing statute or unless AnchorBank
has given its consent;
10.3.3 To the extent that such information constitutes information protected by the
Gramm Leach Bliley Statute, Employee agrees not to use or divulge customer personal
information, such as, social security numbers, account numbers, and asset and/or investment
information, such as name, nature and amount of assets, date of transactions and other such
information, during the term of his/her employment and thereafter indefinitely.
10.4 Upon termination, all documents and information listed in paragraph 10.1 shall be
returned to AnchorBank, unless otherwise authorized by AnchorBank. To the extent the property
belongs to any other affiliate of AnchorBank, AnchorBank will forward the information to the
affiliate.
10.5 Employee agrees not to make any copies of any trade secret or confidential information
for use outside of AnchorBanks office except as specifically authorized in writing by AnchorBank.
10.6 Notice of Disclosure. In the event that the Employee is required, by oral
questions, interrogatories, requests for information or documents, subpoena, civil investigative
demand or similar process, to disclose any confidential material relating to the AnchorBank, the
Employee shall provide the AnchorBank with prompt notice thereof so that the Bank may seek an
appropriate protective order and/or waive compliance by the Employee with the provisions hereof;
provided, however, that if in the absence of a protective order or the receipt of such a waiver,
the Employee is, in the opinion of counsel for the AnchorBank or the Employee, compelled to
disclose confidential material not otherwise disclosable hereunder to any legislative, judicial or
regulatory body, agency or authority, or else be exposed to liability for contempt, fine or penalty
or to other censure, such confidential material may be so disclosed.
10.7 Availability of Documents to Employee. In the event Employee becomes the subject
of any form of regulatory action or complaint relating to his period of employment by the Employer,
Employee may request access to such documents and other Bank, Company or subsidiary information as
is deemed reasonably necessary by the Employee (or his counsel or representative) to Employees
defense of such action or complaint. Employer shall determine, in its sole discretion, what
documentation or information to make available; provided, however, that (i) no information or
materials constituting unpublished OTS information under 12 C.F.R. Section 510.5 shall be
provided under any circumstances except in compliance with the provisions thereof, and (ii)
Employee and his counsel or representative must first agree to steps
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acceptable to the Employer (or to any successor to Employer) to safeguard against unauthorized
disclosure of the accessed information. Employees right of access pursuant to this Section 10.7
shall survive any termination of employment regardless of cause.
11. Discoveries and Inventions. Employee agrees that all inventions, designs,
improvements, writings, research, analysis, and discoveries made during the term of this Agreement
and pertaining to the business conducted by AnchorBank shall be the exclusive property of
AnchorBank, as determined solely by AnchorBank. Employee shall assist AnchorBank in obtaining
patents, trademarks, service marks and/or copyrights on all such inventions, designs, improvements,
writings and discoveries deemed suitable for patent, trademark, service mark, or copyright by
AnchorBank, and shall execute all documents and do all things necessary to obtain letters, patents,
or copyrights, vest AnchorBank with full and exclusive title thereto, and protect the same against
infringements by others.
12. Goodwill. At no time, may Employee take any action or make any statement the
effect of which is intended to disparage the goodwill of the Employer or the business reputation or
good name of the Employer, its officers, directors or employees, or be otherwise detrimental to the
Employer.
13. Equitable Relief/Court Jurisdiction. In the event of a breach or threatened
breach of this Agreement, the non-breaching party shall be entitled to pre-judgment injunctive
relief or similar equitable relief (and the breaching party shall reimburse the Bank for the costs
and reasonable attorneys fees of procuring such an injunction or relief) restraining the breaching
party from committing or continuing any such breach or threatened breach or granting specific
performance of any act required to be performed, without the necessity of showing any actual damage
or that money damages would not afford an adequate remedy and without the necessity of posting any
bond or other security. The parties also hereby consent to the jurisdiction of the Federal courts
located in the Western District of Wisconsin and the state courts located in Dane County for any
proceedings under this Agreement. Nothing herein shall be construed as prohibiting either party
from pursuing any other remedies at law or in equity which it may have.
14. Successors and Assigns. The Employee may not assign this Agreement or any part
thereof.
15. Governing Law. This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of Wisconsin applicable to
contracts to be performed entirely within such State.
16. Entire Agreement. This Agreement contains all the understandings and
representations between the parties hereto pertaining to the subject matter hereof and it
supersedes all undertakings and agreements, whether oral or in writing, if there be any, previously
entered into by them with respect thereto.
17. Amendment. No modification, amendment or addition to this Agreement will be valid
or enforceable unless it is in writing and signed by both parties.
18. Waiver. Failure to insist upon the full performance of an obligation or failure
to exercise rights under this Agreement shall not constitute a waiver as to future defaults or
exercise of rights.
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19. Notices. All notices, demands and other communications which may or are required
to be given under this Agreement must be in writing, must be given either by personal delivery or
by registered or certified mail and will be deemed to have been given when personally delivered or
when deposited in the mail, postage prepaid, addressed to the residence of Employee or his legal
representative or to the business address of the Bank, as the case may be, or to such other
addresses either party may designate by written notice to the other party.
20. Severability. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof and this Agreement shall be construed
in all respects as if such invalid or unenforceable provisions were omitted.
21. Survivorship. The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
22. Counterparts. This Agreement may be executed in counterparts, both of which shall
be deemed an original, but all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this 29th day of
June, 2011.
ANCHORBANK
fsb |
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By: | ||||
Mark D. Timmerman, Secretary, General Counsel | ||||
ANCHOR BANCORP WISCONISN, INC. |
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By: | ||||
Mark D. Timmerman, Secretary, General Counsel | ||||
EMPLOYEE: |
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Chris Bauer, President, Chief Executive Officer | ||||
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