FMSB » Topics » Employment Contracts, Severance Agreements and Change in Control Agreements

This excerpt taken from the FMSB DEF 14A filed Mar 17, 2005.
Employment Contracts, Severance Agreements and Change in Control Agreements

      First Mutual Bank and John R. Valaas are parties to an Employment Agreement dated January 1, 2002, whereby Mr. Valaas agreed to continue to serve as President and Chief Executive Officer of First Mutual Bank. The agreement has a five-year term and will terminate on December 31, 2006, and provides that Mr. Valaas is entitled to a base salary of no less than $250,000 per year, plus fringe benefits generally provided officers of First Mutual Bank, and is eligible to participate in First Mutual Bank’s bonus plan. Mr. Valaas is also eligible for discretionary grants of stock options under the Company’s stock option plan.

      First Mutual Bank has also agreed that in the event of a termination of Mr. Valaas’ employment (whether voluntary or otherwise) following any future Change in Control of First Mutual Bank, Mr. Valaas will be entitled to payment of his base salary for a period of 35 months following termination, with all stock options immediately vesting. A Change in Control occurs when one person or entity (other than a group including two or more of the Company’s present directors) becomes the owner of 25% or more of the Company’s outstanding Common Stock, upon replacement of a majority of the incumbent directors by directors whose elections have not been supported by the present Board, or upon dissolution or sale of 70% or more in value of the assets of First Mutual Bank (“Change of Control”).

      On January 1, 2002, First Mutual Bank entered into an Employment Agreement with Roger A. Mandery, whereby Mr. Mandery agreed to continue to serve as Executive Vice President of First Mutual Bank. The agreement has a five-year term and will terminate on December 31, 2006, and provides that Mr. Mandery is entitled to an annual base salary of no less than $195,000, plus fringe benefits generally provided officers of First Mutual Bank, and is eligible to participate in First Mutual Bank’s bonus plan. Mr. Mandery is also eligible for discretionary grants of stock options under the Company’s stock option plan.

      The agreement also provides that in the event of a termination of Mr. Mandery’s employment (whether voluntary or otherwise) following any future Change of Control of First Mutual Bank, Mr. Mandery will be entitled to payment of his base salary for a period of 35 months following termination, with all stock options immediately vesting.

      First Mutual Bank and James R. Boudreau are parties to an Employment Agreement dated January 1, 2002, whereby Mr. Boudreau agreed to continue to serve as Executive Vice President of First Mutual Bank. The agreement has a five-year term and will terminate on December 31, 2006, and provides that Mr. Boudreau is entitled to a base salary of no less than $175,000 per year, plus fringe benefits generally provided officers of First Mutual Bank, and is eligible to participate in First Mutual Bank’s bonus plan. Mr. Boudreau is also eligible for discretionary grants of stock options under the Company’s stock option plan.

      First Mutual Bank has also agreed that in the event of a termination of Mr. Boudreau’s employment (whether voluntary or otherwise) following any future Change of Control of First Mutual Bank, Mr. Boudreau will be entitled to payment of his base salary for a period of 35 months following termination, with all stock options immediately vesting.

      First Mutual Bank and Richard J. Collette are parties to an Employment Agreement dated March 1, 2002, whereby Mr. Collette agreed to continue to serve as Executive Vice President of First Mutual Bank. The agreement has a five-year term and will terminate on February 28, 2007, and provides that Mr. Collette is entitled to a base salary of no less than $210,000 per year, plus fringe benefits generally provided officers of First Mutual Bank, and is eligible to participate in First Mutual Bank’s bonus plan. Mr. Collette is also eligible for discretionary grants of stock options under the Company’s stock option plan.

      First Mutual Bank has also agreed that in the event of a termination of Mr. Collette’s employment (whether voluntary or otherwise) following any future Change of Control of First Mutual Bank, Mr. Collette will be entitled to payment of his base salary for a period of 35 months following termination, with all stock options immediately vesting.

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      First Mutual Bank and Joseph P. Zavaglia are parties to an Employment Agreement dated January 1, 2004, whereby Mr. Zavaglia agreed to continue to serve as Executive Vice President of First Mutual Bank. The agreement has a five-year term and will terminate on December 31, 2008, and provides that Mr. Zavaglia is entitled to a base salary of no less than $170,000 per year, plus fringe benefits generally provided officers of First Mutual Bank, and is eligible to participate in First Mutual Bank’s bonus plan. Mr. Zavaglia is also eligible for discretionary grants of stock options under the Company’s stock option plan.

      First Mutual Bank has also agreed that in the event of a termination of Mr. Zavaglia’s employment (whether voluntary or otherwise) following any future Change of Control of First Mutual Bank, Mr. Zavaglia will be entitled to payment of his base salary for a period of 35 months following termination, with all stock options immediately vesting.

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