EXHIBIT 10.1
AGREEMENT
AGREEMENT, dated this 3rd day of June 1996, between First Federal
Financial Bancorp, Inc. (the "Corporation"), a Delaware corporation, First
Federal Savings Bank of Ironton (the "Savings Bank"), a federally-chartered
stock savings bank and I. XXXXXXX XXXX (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and the
Savings Bank (together, the "Employers"); and
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 premises and the mutual agreements
herein contained, 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) BASE SALARY. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(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) or final
cease-and-desist order or material breach of any provision of this Agreement.
All such determinations pursuant to this Section 1(b) shall be made in the
sole and complete discretion of the Board of Directors, which determinations
shall be final and conclusive.
(c) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), or any successor thereto,
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whether or not the Corporation is registered under Exchange Act; provided
that, without limitation, such a change in control shall be deemed to have
occurred if (i) any "person" (as such 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 Corporation representing 25% or more of the combined voting power of
the Corporation's then outstanding securities; or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Corporation cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by stockholders, of each new director was approved by a vote of
at least two-thirds of the directors then still in office who were directors
at the beginning of the period.
(d) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given or as specified in such Notice.
(f) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any
physical or mental impairment which qualifies the Executive for disability
benefits under the applicable long-term disability plan maintained by the
Employers or any subsidiary or, if no such plan applies, which would qualify
the Executive for disability benefits under the Federal Social Security
System.
(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:
(i) Without the Executive's express written consent, a material
reduction by the Employers in the Executive's Base Salary as the
same may be increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a material reduction in the
package of fringe benefits provided to the Executive, taken as a
whole;
(ii) The principal executive office of the Employers is relocated more
than 30 miles from the location of the Employers' current
principal executive office, or, without the Executive's express
written consent, the Employers require the Executive to be based
more than 30 miles from the location of the Employers' current
principal executive office, except for required travel on
business of the Employers to an extent
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substantially consistent with the Executive's present business
travel obligations;
(iii) Any purported termination of the Executive's employment for
Cause, Disability or Retirement which is not effected
pursuant to a Notice of Termination satisfying the
requirements of paragraph (i) below;
(iv) The failure by the Employers to elect or to re-elect or to
appoint or to re-appoint the Executive to the office of President
of the Employers or a material adverse change made by the
Employers in the Executive's functions, duties or
responsibilities as President of the Employers without the
Executive's express written consent; or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as
contemplated in Section 9 hereof.
(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 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 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 Executive's employment for Cause, which shall be effective
immediately; and (iv) is given in the manner specified in Section 10 hereof.
(j) RETIREMENT. Termination by the Employers of the Executive's
employment based on "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including
early retirement, generally applicable to their salaried employees.
2. TERM OF EMPLOYMENT.
(a) The Employers hereby employ the Executive as President and
Executive hereby accepts said employment and agrees to render such services
to the Employers on the terms and conditions set forth in this Agreement.
The term of employment under this
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Agreement shall be for three years, commencing on the date of this Agreement
and, upon approval of the Board of Directors of the Employers, shall extend
for an additional year on each annual anniversary of the date of this
Agreement such that at any time the remaining term of this Agreement shall be
from two to three years. Prior to the first annual anniversary of the date
of this Agreement and each annual anniversary thereafter, the Board of
Directors of the Employers shall consider and review (with appropriate
corporate documentation thereof, and after taking into account all relevant
factors, including the Executive's performance hereunder) extension of the
term under this Agreement, and the term shall continue to extend each year if
the Board of Directors approves such extension unless the Executive gives
written notice to the Employers of the Executive's election not to extend the
term, with such written notice to be given not less than thirty (30) days
prior to any such anniversary date. References herein to the term of this
Agreement shall refer both to the initial term and successive terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as may be consistent with his titles and
from time to time assigned to him by the Employers' Board of Directors.
3. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay Executive for his services
during the term of this Agreement at a minimum salary of $47,500 per year,
which may be increased from time to time in such amounts as may be determined
by the Board of Directors of the Employers and, except in connection with a
company-wide general reduction in salaries as a result of general economic
conditions, may not be decreased without the Executive's express written
consent (hereinafter, referred to as Executive's "Base Salary"). In
addition, the Executive may also receive bonus payments when, as, and if
determined in the sole discretion of the Board of Directors of the Employers.
(b) During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or
other plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and
responsibilities, as fixed by the Board of Directors of the Employers. The
Employers shall not make any changes in such plans, benefits or privileges
which would adversely affect Executive's rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all executive
officers of the Employers and does not result in a proportionately greater
adverse change in the rights of or benefits to Executive as compared with any
other executive officer of the Employers. Nothing paid to Executive under
any plan or arrangement presently in effect or made available in the future
shall be deemed to be in lieu of the salary payable to Executive pursuant to
Section 3(a) hereof.
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(c) During the term of this Agreement, Executive shall be entitled to
paid annual vacation in accordance with the policies as established from time
to time by the Board of Directors of the Employers, which shall in no event
be less than four weeks per annum. Executive shall not be entitled to
receive any additional compensation from the Employers for failure to take a
vacation, nor shall Executive be able to accumulate unused vacation time from
one year to the next, except to the extent authorized by the Board of
Directors of the Employers.
(d) In the event of termination by the Employers of the Executive's
employment because of Disability, the Employers shall provide continued
medical insurance in the Employers' health plan for the benefit of the
Executive and his spouse until the Executive shall have attained the age of
65, and such insurance shall be comparable to that which is provided to the
Executive as of the date of this Agreement notwithstanding anything to the
contrary in this Agreement. In the event of the Executive's death before he
attains the age of 65, the Employers shall provide the Executive's spouse
said medical insurance for two years from the date of the Executive's death.
(e) In the event of the Executive's death during the term of this
Agreement, the Executive's spouse, estate, legal representative or named
beneficiaries (as directed by the Executive in writing) shall be paid on a
monthly basis the greater of (i) the death benefits which may be available
under one or more policies of the Employers or (ii) the Executive's annual
compensation from the Employers at the rate in effect at the time of the
Executive's death for a period of twelve (12) months from the date of the
Executive's death.
(f) The Executive's compensation, benefits and expenses which are
required to be provided under this Agreement shall be paid by the Corporation
and the Savings Bank in the same proportion as the time and services actually
expended by the Executive on behalf of each respective Employer.
4. EXPENSES. The Employers shall reimburse Executive or otherwise
provide for or pay for all reasonable expenses incurred by Executive in
furtherance of, or in connection with the business of the Employers,
including, but not by way of limitation, traveling expenses, subject to such
reasonable documentation and other limitations as may be established by the
Board of Directors of the Employers. If such expenses are paid in the first
instance by Executive, the Employers shall reimburse the Executive therefor.
5. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and Executive shall have
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the right, upon prior Notice of Termination, to terminate his employment
hereunder for any reason.
(b) In the event that (i) Executive's employment is terminated by the
Employers for Cause, Disability or Retirement or in the event of the Executive's
death, or (ii) Executive terminates his employment hereunder other than for Good
Reason, Executive shall have no right pursuant to this Agreement to compensation
or other benefits for any period after the applicable Date of Termination, other
than as set forth in subsections 3(d) and 3(e) hereinabove.
(c) In the event that (i) Executive's employment is terminated by the
Employers for other than Cause, Disability, Retirement or the Executive's death,
or (ii) such employment is terminated by the Executive (a) due to a material
breach of this Agreement by the Employers, which breach has not been cured
within fifteen (15) days after a written notice of non-compliance has been given
by the Executive to the Employers, or (b) for Good Reason, then the Employers
shall:
(A) pay to the Executive, in thirty-six (36) equal monthly
installments beginning with the first business day of the month following
the Date of Termination, a cash severance amount equal to three (3) times
the Executive's Base Salary, and
(B) maintain and provide for a period ending at the earlier of (i)
the expiration of the remaining term of employment pursuant hereto prior to
the Notice 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 additional cost to the
Executive beyond that which the Executive is responsible for prior to the
Date of Termination, the Executive's continued participation in all group
insurance, life insurance, health and accident, disability and other
employee benefit plans, programs and arrangements in which the Executive
was entitled to participate immediately prior to the Date of Termination
(other than stock option and restricted stock plans of the Employers),
provided that in the event that the Executive's participation in any plan,
program or arrangement as provided in this subparagraph (B) is barred, or
during such period any such plan, program or arrangement is discontinued or
the benefits thereunder are materially reduced, the Employers shall arrange
to provide the Executive with benefits substantially similar to those which
the Executive was entitled to receive under such plans, programs and
arrangements immediately prior to the Date of Termination.
6. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which Executive has the right to receive from the
Employers, would constitute a
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"parachute payment" under Section 280G of the Code, the payments and benefits
pursuant to Section 5 hereof shall be reduced, in the manner determined by
the Executive, by the amount, if any, which is the minimum necessary to
result in no portion of the payments and benefits under Section 5 being
non-deductible to the Employers pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code. The
determination of any reduction in the payments and benefits to be made
pursuant to Section 5 shall be based upon the opinion of independent tax
counsel selected by the Employers' independent public accountants and paid by
the Employers. Such counsel shall be reasonably acceptable to the Employers
and the Executive; shall promptly prepare the foregoing opinion, but in no
event later than thirty (30) days from the Date of Termination; and may use
such actuaries as such counsel deems necessary or advisable for the purpose.
In the event that the Employers and/or the Executive do not agree with the
opinion of such counsel, (i) the Employers shall pay to the Executive the
maximum amount of payments and benefits pursuant to Section 5, as selected by
the Executive, which such opinion indicates that there is a high probability
do not result in any of such payments and benefits being non-deductible to
the Employers and subject to the imposition of the excise tax imposed under
Section 4999 of the Code and (ii) the Employers may request, and Executive
shall have the right to demand that the Employers request, a ruling from the
IRS as to whether the disputed payments and benefits pursuant to Section 5
hereof have such consequences. Any such request for a ruling from the IRS
shall be promptly prepared and filed by the Employers, but in no event later
than thirty (30) days from the date of the opinion of counsel referred to
above, and shall be subject to Executive's approval prior to filing, which
shall not be unreasonably withheld. The Employers and Executive agree to be
bound by any ruling received from the IRS and to make appropriate payments to
each other to reflect any such rulings, together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.
Nothing contained herein shall result in a reduction of any payments or
benefits to which the Executive may be entitled upon termination of
employment under any circumstances other than as specified in this Section 6,
or a reduction in the payments and benefits specified in Section 5 below zero.
7. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) In the event that the Employers are required to make payments to
the Executive pursuant to Section 5 hereof in connection with a termination
of Executive's employment for other than Good Reason, the cash severance
amount required to be paid by the Employers shall be reduced during each year
that such payments are required to be made by 50% of any payments made to the
Executive by any other employer. In all other circumstances, the Executive
shall not be required to mitigate the amount of any benefits hereunder by
seeking other employment or otherwise, nor shall the amount of any such
benefits be reduced by any compensation earned by the Executive as a result
of employment by another employer after the Date of Termination or otherwise.
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(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. ASSIGNABILITY. The Employers may assign this Agreement and their
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
their assets, if in any such case said corporation, bank or other entity shall
by operation of law or expressly in writing assume all obligations of the
Employers hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or their rights and obligations
hereunder. The Executive may not assign or transfer this Agreement or any
rights or obligations hereunder.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Secretary
First Federal Financial Bancorp, Inc.
First Federal Savings Bank of Ironton
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
To the Executive: I. Xxxxxxx Xxxx
000 Xxxxxxxx Xxxx 000
Xxxxxxx, Xxxx 00000
11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Employers to sign on
their behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
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12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United
States where applicable and otherwise by the substantive laws of the State of
Ohio.
13. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
xrequire the Employers to create a trust of any kind to fund any benefits
which may be payable hereunder, and to the extent that the Executive acquires
a right to receive benefits from the Employers hereunder, such right shall be
no greater than the right of any unsecured general creditor of the Employers.
14. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
17. REGULATORY PROHIBITION. Notwithstanding any other provision of
this Agreement to the contrary, any payments made to the Executive pursuant
to this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and any
regulations promulgated thereunder.
The following provisions shall be applicable to the parties to the
extent that they are required to be included in employment agreements between
a savings association and its employees pursuant to Section 563.39(b) of the
Regulations Applicable to all Savings Associations, 12 C.F.R. Section
563.39(b), or any successor thereto, and shall be controlling in the event of
a conflict with any other provision of this Agreement, including without
limitation Section 5 hereof.
(a) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Employers' affairs pursuant to
notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA")(12 U.S.C. Sections 1818(e)(3) and 1818(g)(1)), the
Employers' obligations under this Agreement shall be suspended as of the date
of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Employers may, in their discretion: (i) pay
Executive all or part of the compensation withheld while its obligations
under this Agreement were
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suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
(b) If Executive is removed from office 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 FDIA (12 U.S.C.
Sections 1818(e)(4) and (g)(1)), all obligations of the Employers under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the Executive and the Employers as of the date of termination shall
not be affected.
(c) If the Savings Bank is in default, as defined in Section 3(x)(1) of
the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement
shall terminate as of the date of default, but vested rights of the Executive
and the Employers as of the date of termination shall not be affected.
(d) All obligations under this Agreement shall be terminated pursuant
to 12 C.F.R. Section 563.39(b)(5) (except to the extent that it is determined
that continuation of the Agreement for the continued operation of the
Employers is necessary): (i) by the Director of the Office of Thrift
Supervision ("OTS"), or his/her designee, at the time the Federal Deposit
Insurance Corporation ("FDIC") or Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Savings Bank under the
authority contained in Section 13(c) of the FDIA (12 U.S.C. Section 1823(c));
or (ii) by the Director of the OTS, or his/her designee, at the time the
Director or his/her designee approves a supervisory merger to resolve
problems related to operation of the Savings Bank or when the Savings Bank is
determined by the Director of the OTS to be in an unsafe or unsound
condition, but vested rights of the Executive and the Employers as of the
date of termination shall not be affected.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
Attest: FIRST FEDERAL FINANCIAL BANCORP, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------- ---------------------------------
Xxxxx X. Xxxxxxx, Secretary Xxxxxx X. Xxxxxxxx
Chairman
Attest: FIRST FEDERAL SAVINGS BANK
OF IRONTON
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------- ---------------------------------
Xxxxx X. Xxxxxxx, Secretary Xxxxxx X. Xxxxxxxx
Chairman
EXECUTIVE
By: /s/ I. Xxxxxxx Xxxx
---------------------------------
I. Xxxxxxx Xxxx
