Exhibit
10
 
 FIRST
FEDERAL BANKSHARES, INC.
 VANTUS
BANK
 CHANGE
IN CONTROL AGREEMENT
 
 This
Change in Control Agreement (“Agreement”) is made effective as of the 5th day of January, 2009 by and
between First Federal Bankshares, Inc., a Delaware corporation (the “Company”),
with its principal administrative office at 329 Pierce Street, Sioux City, Iowa
51101 and Vantus Bank (formerly First Federal Bank), the federal stock savings
bank subsidiary of the Company (the “Bank”) and Levon Mathews
(“Executive”).
 
 WHEREAS, Executive is employed
as the President and Chief Executive Officer of the Bank; and
 
 WHEREAS, the Company and the
Bank recognize the substantial contribution that Executive makes or will make to
the Company and the Bank; and
 
 WHEREAS, the Company and the
Bank wish to provide Executive with certain protections and benefits in the
event of a Change in Control of the Company or the Bank, as provided in this
Agreement
 
 NOW, THEREFORE, in
consideration of Executive’s contributions to the Company and the Bank, and upon
the other terms and conditions hereinafter provided, the parties hereto agree as
follows:
 
 1.
              TERM
      OF AGREEMENT
 
 The
“term” of this Agreement shall be eighteen (18) full calendar months from the
effective date of this Agreement set forth above, and shall include any
extension or renewal made pursuant to this Section.  Commencing on
January 5, 2008 and continuing on January 2 of each year thereafter (the
“Anniversary Date”), this Agreement shall renew for an additional year such that
the remaining term shall be one year unless written notice of non-renewal
(“Non-Renewal Notice”) is provided to Executive at least thirty (30) days and
not more than sixty (60) days prior to any such Anniversary Date, that this
Agreement shall terminate at the end of twelve (12) months following such
Anniversary Date.
 
 2.
              PAYMENTS
      TO EXECUTIVE
 
 (a)Upon the occurrence of
Executive’s involuntary termination of employment or voluntary termination of
employment for “Good Reason” (as defined below) within twelve (12) months
following the effective date of a “Change in Control” (as defined below)
(“Termination of Employment”), the Company or the Bank shall pay Executive (or
in the event of his subsequent death, his estate), his base salary in effect on
the date of Executive’s Termination of Employment (“Base Salary”) for eighteen
(18)  months following the date of such Termination of Employment,
provided, however, (i) that such Termination of Employment must qualify as a
“Separation from Service” as defined in Code Section 409A and the regulations
thereunder; and (ii) if Executive is a “Specified Employee” (as defined in Code
Section 409A and the regulations thereunder), to the extent required to avoid
penalties under Code Section 409A, any payment or portions of payments shall not
be made until the first day of the seventh month following Executive’s
Separation from Service.  To the extent amounts payable under this
Agreement are determined by the Bank, in good faith, to be subject to federal,
state or local income tax, the Bank may withhold from each such payment an
amount necessary to meet the Bank’s obligation to withhold amounts under the
applicable federal, state or local law.
 
 (b)In addition, upon the
occurrence of Executive’s Termination of Employment, Executive will have such
rights as specified in any other employee benefit plan (including, but not
limited to, equity compensation plans and COBRA rights under the Bank’s group
health plan).
 
 (c)
Voluntary Termination of Employment for “Good Reason” following a Change in
Control shall mean Executive’s voluntary resignation from the Bank’s employ
within one hundred and twenty (120) days after the
  
  initial
occurrence of any of the following events, provided, however, that Executive
must give the Bank written notice of the initial occurrence of such event within
sixty (60) days of the occurrence of such event and provided further that the
Bank shall have thirty (30) days to cure such situation.  “Good Reason
means:
 
 (i)
              a
      material diminution in Executive’s
compensation;
 
 (ii)
              a
      material diminution in Executive’s authority duties or
      responsibilities;
 
 (iii)
              a
      material diminution in the budget over which Executive retains
      authority;
 
 (iv)
              a
      change in the geographic location at which Executive must perform his
      duties that is more than fifty (50) miles from the location of Executive’s
      principal workplace on the date of this Agreement;
  or
 
 (v)
              any
      other action or inaction that constitutes a material breach by the Bank of
      this Agreement.
 
 
 (c)“Change in Control” of the
Bank or the Company shall meana change in control of a
nature that:
 
 (i)
              would
      be required to be reported in response to Item 5.01 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”);
      or
 
 (ii)
              results
      in a Change in Control of the Bank or the Company within the meaning of
      the Home Owners’ Loan Act and the Rules and Regulations promulgated by the
      Office of Thrift Supervision (or its predecessor agency), as in effect on
      the date hereof; or
 
 (iii)
              without
      limitation such a Change in Control shall be deemed to have occurred at
      such time as:
 
 (a)
              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 Bank or
      the Company representing 25% or more of the Bank’s or the Company’s
      outstanding securities; or
 
 (b)
              individuals
      who constitute the Board on the date hereof (the “Incumbent Board”) cease
      for any reason to constitute at least a majority thereof, provided, however,that
      this subsection (b) shall not apply if the Incumbent Board is replaced by
      the appointment by a Federal banking agency of a conservator or receiver
      for the Bank and, provided furtherthat
      any person becoming a director subsequent to the date hereof whose
      election was approved by a vote of at least two-thirds of the directors
      comprising the Incumbent Board or whose nomination for election by the
      Company’s stockholders was approved by the same Nominating Committee
      serving under an Incumbent Board, shall be, for purposes of this clause
      (b), considered as though he were a member of the Incumbent Board;
      or
 
 (c)
              a
      proxy statement soliciting proxies from stockholders of the Company, by
      someone other than the current management of the Company, seeking
      stockholder approval of a plan of reorganization, merger
  or
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  consolidation
of the Company or Bank or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities then subject
to such plan or transaction are exchanged for or converted into cash or property
or securities not issued by the Bank or the Company shall be distributed and the
requisite number of proxies approving such plan of reorganization, merger or
consolidation of the Company or Bank are received and voted in favor of such
transactions; or
 
 (d)
              a
      tender offer is made for 25% or more of the outstanding securities of the
      Bank or Company and shareholders owning beneficially or of record 25% or
      more of the outstanding securities of the Bank or Company have tendered or
      offered to sell their shares pursuant to such tender offer and such
      tendered shares have been accepted by the tender
  offeror.
 
 (d)“Base Salary” as used in
this Agreement shall carry its commonly-accepted meaning and shall exclude all
cash bonuses, equity bonuses, incentive pay, retirement contributions, employee
health and dental benefits, allowances, expense reimbursement, and other
non-salary-related payments.
 
 3.
              SOURCE
      OF PAYMENTS
 
 It is
intended by the parties hereto that all payments provided in this Agreement
shall be paid in cash or check from the general funds of the Company or the
Bank, provided, however, that in the event that the payment of any amounts due
under Section 3 above is made by the Bank, such payment shall offset the payment
due from the Company hereunder.
 
 4.
              POST
      TERMINATION OBLIGATIONS
 
 (a)          
General.  All
payments under this Agreement shall be subject to Executive’s compliance with
this Section 5.
 
 (b)           Litigation
Cooperation.  Executive shall, upon reasonable notice, furnish
such information and assistance to the Bank or the Company as may reasonably be
required by the Bank or the Company in connection with any litigation in which
it or any of its subsidiaries or affiliates is, or may become, a party;
provided, however, that Executive shall not be required to provide information
or assistance with respect to any litigation between Executive and the Bank or
the Company or any of its subsidiaries or affiliates.
 
 (c)           Confidentiality.  Executive
recognizes and acknowledges that the knowledge of the business activities and
plans for business activities of the Bank and the Company and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank and the Company and affiliates
thereof.  Accordingly, Executive will not, for a twelve (12) month
period following his Termination of Employment, disclose any knowledge of the
past, present, planned or considered business activities, including, but not
limited to, customer information, of the Bank and the Company and affiliates
thereof to any person, firm, corporation, or other entity for any reason or
purpose whatsoever (except for such disclosure as may be required to be provided
to any regulatory agency with jurisdiction over the Bank or the Company or any
affiliate).  Notwithstanding the foregoing, Executive may disclose any
knowledge of general banking, financial, and/or economic principles, concepts or
ideas which are not solely and exclusively derived from the business plans and
activities of the Bank or the Company, and Executive may disclose any
information regarding the Bank or the Company which is otherwise publicly
available or that he is otherwise legally required to disclose.  In
the event of a breach or threatened breach by Executive of the provisions of
this Section 5(c), the Bank and the Company will be entitled to an injunction
restraining Executive from disclosing, in whole or in part, his knowledge of the
past, present, planned or considered business activities of the Bank or any of
their affiliates, or from rendering any services to any person, firm,
corporation or other entity to whom such knowledge, in whole or in part, has
been disclosed or is threatened to be disclosed.  Nothing herein
will
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  be
construed as prohibiting the Bank from pursuing any other remedies available to
them for such breach or threatened breach, including the recovery of damages
from Executive.
 
 (d)           Non-Compete.  Executive
agrees not to compete with the Bank and the Company and any affiliate for a
period of twelve (12) months following his Termination of Employment within
twenty-five (25) miles of any city, town or county in which, as of the date of
the Change in Control, the Bank has an office or has filed an application for
regulatory approval to establish an office, determined as of the date of his
Termination of Employment, except as agreed to pursuant to a resolution duly
adopted by the Board.  Executive agrees that during such period and
within said cities, towns and counties, Executive shall not work for or advise,
consult or otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other business
activities of the Bank or the Company.  The parties hereto,
recognizing that irreparable injury will result to the Bank and the Company,
their business and property in the event of Executive’s breach of this Section
5(d), agree that in the event of any such breach by Executive, the Bank and the
Company shall immediately cease all payments hereunder and shall also be
entitled to any other remedies and damages available, to an injunction to
restrain the violation hereof by Executive, his partners, agents, servants,
employers, employees and all persons acting for or with
him.  Executive represents and admits that his experience and
capabilities are such that he can obtain employment in a business engaged in
other lines and/or of a different nature than the Bank and the Company, and that
the enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood.  Nothing herein will be construed as prohibiting
the Bank and the Company from pursuing any other remedies available to them for
such breach or threatened breach, including the recovery of damages from
Executive.
 
 (e)           Non-Solicitation.  Executive
further agrees that he will not, in any manner whatsoever, for a period of
twelve (12) months following his Termination of Employment, either as an
individual or as a partner, stockholder, director, officer, principal, employee,
agent, consultant, or in any other relationship or capacity, with any person,
firm, corporation or other business entity, either directly or indirectly,
solicit or induce or aid in the solicitation or inducement of (i) any employees
of the Bank or the Company to leave their employment with the Bank or the
Company or (ii) any customers of the Bank to leave their customer relationship
with the Bank. Executive further agrees that he will not, in any manner
whatsoever, for a period of twelve (12) months following the his Termination of
Employment, either as an individual or as a partner, stockholder, director,
officer, principal, employee, agent, consultant or in any other relationship or
capacity with any person, firm, corporation or other business entity, either
directly or indirectly, solicit the business of any customers or clients of the
Bank or the Company.  Any breach of this subsection (e) shall result
in immediate cessation of any payments being made hereunder.
 
 (f)           Non-Disparagement.  Executive
and the Bank and the Company agree that they will engage in no conduct which is
either intended to or could reasonably be expected to harm each other in the
operation of their business.  Both parties agree they will not take
any action, legal or otherwise, which might embarrass, harass, or adversely
affect each other or which might in any way work to the detriment of each other,
whether directly or indirectly.  In particular and by way of
illustration not limitation, each party agrees that it will not directly or
indirectly contact customers or any entity that has a business relationship with
the other, in order to disparage the good morale or business reputation or
business practices of Executive or the Bank and the Company, or any of its
current and former officers, directors, managers or employees.
 
 (g)           Return of
Property.  Immediately upon his Termination of Employment,
Executive shall return to the Bank and/or the Company all of the property which
belongs to the Bank and/or the Company, including, but not limited to,
computers, keys, cell phones, credit cards and other tangible property, as well
as all original or copies of records, notes, reports, proposals, lists,
correspondence, materials or other documents.
 
 (h)           Duty to
Mitigate.  In the event the Executive becomes employed at a
position where he earns less than the amount of his Base Salary as of the date
of his Termination of Employment, the obligations of the Bank and/or the Company
to pay benefits hereunder shall be reduced such that the combination of
Executive’s Base Salary with the new employer and the Bank’s or Company’s
payments hereunder shall, when taken together, approximate the amount of
Executive’s Base Salary as of the date of his Termination of
Employment.  If Executive earns more than the Base Salary as of the
date of his Termination from his new employer, the Bank and/or the Company’s
payments hereunder shall cease.  If the Executive fails to provide the
information necessary to determine
  4
  the
Executive’s Base Salary with the new employer (including self-employment), all
payments hereunder shall cease.  Furthermore, if the Base Salary
provided by Executive’s new employer is deemed by the Bank or Company to be
substantially below an amount that would be considered reasonable in light of
available market information for similar positions, payments hereunder shall be
reduced by the difference.
 
 5.
              AMENDMENT AND
      TERMINATION.
 
 (a)           Amendment.  The
Bank or the Company may at any time amend the Agreement in whole or in part,
provided, however, that no amendment shall decrease or restrict the amount
accrued to the date of amendment.
 
 (b)           Termination.  The
Bank or the Company may at any time partially or completely terminate the
Agreement, if, in its judgment, the tax, accounting, or other effects of the
continuance of the Agreement, or potential payments thereunder, would not be in
the best interests of the Bank or the Company.
 
 (i)           
Partial
Termination.  In the event of a partial termination, the
Agreement shall continue to operate and be effective with regard to benefits
accrued prior to the effective date of such partial termination, but no further
benefits shall accrue after the date of such partial termination.
 
 (ii)           Complete
Termination.  Subject to the requirements of Code Section 409A,
in the event of complete termination, the Agreement shall cease to operate and
the Bank shall pay the Executive any benefits owed hereunder as a cash lump sum
as of the effective date of the complete termination.  Such complete
termination of the Agreement shall occur only under the following circumstances
and conditions.
 
 (A)           The
Bank may terminate the Agreement within 12 months of a corporate dissolution
taxed under Code section 331, or with approval of a bankruptcy court pursuant to
11 U.S.C. §503(b)(1)(A), provided that the amounts accrued under the Agreement
are included in the Executive’s gross income in the latest of (i) the calendar
year in which the Agreement terminates; (ii) the calendar year in which the
amount is no longer subject to a substantial risk of forfeiture; or (iii) the
first calendar year in which the payment is administratively
practicable.
 
 (B)           The
Bank may terminate the Agreement within the thirty (30) days preceding a Change
in Control (but not following a Change in Control), provided that the Agreement
shall only be treated as terminated if all substantially similar arrangements
sponsored by the Bank are terminated so that the Executive and all participants
under substantially similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12)
months of the date of the termination of the arrangements.
 
 (C)           The
Bank may terminate the Agreement provided that (i) all arrangements sponsored by
the Bank that would be aggregated with this Agreement under Treasury Regulations
Section 1.409A-1(c) if any individual; covered by this Agreement was also
covered by any of those other arrangements are also terminated; (ii) no payments
other than payments that would be payable under the terms of the arrangement if
the termination had not occurred are made within twelve (12) months of the
termination of the arrangement; (iii) all payments are made within twenty-four
(24) months of the termination of the arrangements; and (iv) the Bank does not
adopt a new arrangement that would be aggregated with any terminated arrangement
under Treasury Regulations Section 1.409A-1(c) if the same individual
participated in both arrangements, at any time within three years following the
date of termination of the arrangement.
 
 (D)           The
Bank may terminate the Agreement pursuant to such other terms and conditions as
the Internal Revenue Service may permit from time to time.
 
 6.
              EFFECT
      ON PRIOR AGREEMENTS AND EXISTING BENEFIT
PLANS
 
 This
Agreement contains the entire understanding between the parties hereto and
supersedes any prior agreement between the Company, the Bank and Executive,
except that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Executive of a kind elsewhere provided. No provision of
this
  5
  Agreement
shall be interpreted to mean that Executive is subject to receiving fewer
benefits than those available to him without reference to this
Agreement.
 
 7.
              NO
      ATTACHMENT
 
 (a) Except as required by law,
no right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance, charge,
pledge, or hypothecation, or to execution, attachment, levy, or similar process
or assignment by operation of law, and any attempt, voluntary or involuntary, to
affect any such action shall be null, void, and of no effect.
 
 (b)           This
Agreement shall be binding upon, and inure to the benefit of, Executive, the
Company, the Bank and their respective successors and assigns.
 
 8.
              WAIVER
 
 No term
or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.
 
 9.
              REQUIRED
      PROVISIONS
 
 Notwithstanding
anything herein contained to the contrary, any payments to Executive by the
Company or the Bank, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations
promulgated thereunder in 12 C.F.R. Part 359.
 
 10.
              SEVERABILITY
 
 If, for
any reason, any provision of this Agreement, or any part of any provision, is
held invalid, such invalidity shall not affect any other provision of this
Agreement or any part of such provision not held so invalid, and each such other
provision and part thereof shall to the full extent consistent with law continue
in full force and effect.
 
 11.
              GOVERNING
      LAW
 
 (a)           The
validity, interpretation, performance, and enforcement of this Agreement shall
be governed by the laws of the State of Iowa.
 
 (b)           Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a single arbitrator,
mutually agreed upon by the parties.  Such arbitration shall be
conducted in a location within fifty (50) miles from the location of the
Company, in accordance with the rules of the Judicial Mediation and Arbitration
Systems (JAMS) then in effect.  Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.
 
 12.
              SUCCESSOR
      TO THE COMPANY OR BANK
 
 The
Company and the Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company or the Bank, expressly
and unconditionally to assume and agree to perform the Company’s or the Bank’s
obligations under this Agreement, in the same manner and to the same extent that
the Company or the Bank would be required to perform if no such succession or
assignment had taken place.
  6
  13.
              NOT
      AN EMPLOYMENT AGREEMENT
 
 This
Agreement does not guarantee employment with the Bank or the Company and the
Bank and the Company has not waived its rights to treat the Executive as an “at
will” employee.
  
 14.
              SIGNATURES
 
 IN WITNESS WHEREOF, the
Company and the Bank have caused this Agreement to be executed by its duly
authorized officers, and Executive has signed this Agreement, effective as of
the date first above written.
 
 FIRST FEDERAL BANKSHARES,
      INC.January 5, 2009
                              By:
                              /s/ Arlene CurryDate
                              
                              Arlene
      CurryChair,
      Board of DirectorsVANTUS
      BANKJanuary 5, 2009
                              By:
                              /s/ Arlene CurryDate
                              
                              Arlene
      CurryChair,
      Board of DirectorsEXECUTIVEJanuary 5, 2009
                              
                              /s/ Levon MathewsDate
                              
                              Levon
      Mathews
 
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