Cto Employment Agreement

EMPLOYMENT AGREEMENT



THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this 1 st day of June, 2000, by and between First Security Federal Savings Bank (hereinafter referred to as the "Association" whether in mutual or stock form), and Julian E. Kulas (the "Employee").





WHEREAS, the Employee is currently serving as the President and Chief Executive Officer of the Association; and





WHEREAS, the Association has converted to the capital stock form as a subsidiary of First SecurityFed Financial, Inc. (the "Holding Company"); and





WHEREAS, the board of directors of the Association ("Board of Directors") recognizes that, as is the case with publicly held corporations generally, the possibility of a change in control of the Holding Company and/or the Association may exist and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of key management personnel to the detriment of the Association, the Holding Company and their respective stockholders; and





WHEREAS, the Board of Directors believes it is in the best interests of the Association to enter into this Agreement with the Employee in order to assure continuity of management of the Association and to reinforce and encourage the continued attention and dedication of the Employee to his assigned duties without distraction in the face of potentially disruptive circumstances arising from the possibility of a change in control of the Holding Company or the Association, although no such change is now contemplated; and





WHEREAS, the Board of Directors has approved and authorized the execution of this Agreement with the Employee to take effect as stated in Section 2 hereof;





NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein, it is AGREED as follows:





1. Definitions .



(a) The term "Change in Control" means (1) an event of a nature that (i) results in a change in control of the Association or the Holding Company within the meaning of the Home Owners92 Loan Act of 1933 and 12 C.F.R. Part 574 as in effect on the date hereof; or (ii) would be required to be reported in response to Item I 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"); (2) 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 of the Association or the Holding Company representing 20% or more of the Association92 s or the Holding Company92s outstanding securities; (3) individuals who are members of the board of directors of the Association or the Holding Company on the










date hereof (the "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 whose nomination for election by the Holding Company92s stockholders was approved by the nominating committee serving under an Incumbent Board, shall be considered a member of the Incumbent Board; or (4) a plan of reorganization, merger consolidation, sale of all or substantially all of the assets of the Association or the Holding Company or a similar transaction in which the Association or the Holding Company is not the resulting entity. The term " change in control " shall not include an acquisition of securities by an employee benefit plan of the Association or the Holding Company or the acquisition of securities of the Association by the Holding Company. In the application of 12 C.F.R. Part 574 to a determination of a Change in Control, determinations to be made by the OTS or its Director under such regulations shall be made by the Board of Directors.



(b) The term "Commencement Date" means June 1, 2000.



(c) The term "Date of Termination" means the earlier of (1) the date upon which the Association gives notice to the Employee of the termination of his employment with, the Association or (2) the date upon which the Employee ceases to serve as an Employee of the Association.



(d) The term "Involuntarily Termination" means termination of the employment of Employee without his express written consent, and shall include a material diminution of or interference with the Employee92s duties, responsibilities and benefits as President and Chief Executive Officer of the Association, including (without limitation) any of the following actions unless consented to in writing by the Employee: (1) a change in the principal workplace of the Employee to a location outside of a 30 mile radius from the Association92s headquarters office as of the date hereof; (2) a material reduction in the number or seniority of other Association personnel reporting to the Employee or a material reduction in the frequency with which, or in the nature of the matters with respect to which such personnel are to report to the Employee, other than as part of a Association- or Holding Company-wide reduction in staff; (3) a material adverse change in the Employee92s salary, perquisites, benefits, contingent benefits or vacation, other than as part of an overall program applied uniformly and with equitable effect to all members of the senior management of the Association or the Holding Company; (4) a material permanent increase in the required hours of work or the workload of the Employee; and (5) a material demotion of the Employee. The term " Involuntary Termination" does not include Termination for Cause or termination of employment due to retirement, death, disability or suspension or temporary or permanent prohibition from participation in the conduct of the Association92s affairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").



(e) The terms "Termination for Cause" and "Terminated for Cause" mean termination of the employment of the Employee because of the Employee92s personal dishonesty, incompetence, willful misconduct, breach of a 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 Agreement. The Employee shall not be deemed to have been Terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution,



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duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors of the Association at a meeting of the Board called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee92s counsel, to be heard before the Board), stating that in the good faith opinion of the Board the Employee has engaged in the conduct described in the preceding sentence and specifying the particulars thereof in detail.



2. Term . The term of this Agreement shall be a period of three years commencing on the Commencement Date, subject to earlier termination as provided herein. Beginning on the first annual anniversary date following the Commencement Date, and on each annual anniversary date thereafter, the term of this Agreement shall be extended for a period of one year in addition to the then96remaining term, provided that (1) the Association has not given notice to the Employee in writing at least 90 days prior to such renewal date that the term of this Agreement shall not be extended further; and (2) prior to such renewal date, the Board of Directors of the Association has explicitly reviewed and approved the extension. Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms.



3. Employment . The Employee is employed as the Pr ...