EXHIBIT 10.8
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (hereinafter referred to as this "AGREEMENT") is
entered into as of the 1st day of July, 2003, by and between The Xxxxxx Savings
and Loan Co., a savings and loan association incorporated under Ohio law
(hereinafter referred to as "XXXXXX"), and Xxxxxxx X. Xxxxxx, an individual
(hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is currently employed as the Secretary and Treasurer
of XXXXXX;
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of XXXXXX desires to retain the services of the
EMPLOYEE as the Secretary and Treasurer of XXXXXX;
WHEREAS, the EMPLOYEE desires to continue to serve as the Secretary and
Treasurer of XXXXXX; and
WHEREAS, the EMPLOYEE and XXXXXX desire to enter into this AGREEMENT to
set forth their understanding as to their respective rights and obligations in
the event of the termination of EMPLOYEE'S employment under the circumstances
set forth in this AGREEMENT.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, XXXXXX and the EMPLOYEE hereby agree as follows:
1. Term. This AGREEMENT shall commence on the date set forth above and
shall end twelve (12) months thereafter, subject to earlier termination as
provided herein (hereinafter referred to as the "TERM").
2. Termination of Employment.
(a) Termination for JUST CAUSE. In the event that XXXXXX terminates the
employment of the EMPLOYEE before the expiration of the TERM because of
the EMPLOYEE'S personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure or
refusal to perform the duties and responsibilities assigned in this
AGREEMENT, willful violation of any law, rule, regulation (other than
traffic violations or similar offenses) or final cease-and-desist order,
conviction of a felony or for fraud or embezzlement, or material breach of
any provision of this AGREEMENT (hereinafter collectively referred to as
"JUST CAUSE"), the EMPLOYEE shall not receive, and shall have no right to
receive, any compensation or other benefits for any period after such
termination.
(b) Termination without JUST CAUSE and without a CHANGE OF CONTROL. In the
event that XXXXXX terminates the employment of the EMPLOYEE before the
expiration of the TERM without JUST CAUSE and on a date which is more than
six months before a CHANGE OF CONTROL (hereinafter defined) or which is
after one year following a CHANGE OF CONTROL, the EMPLOYEE shall not
receive, and shall have no right to receive, any compensation or other
benefits for any period after such termination.
(c) Termination in Connection with a CHANGE OF CONTROL.
(i) In the event that XXXXXX terminates the employment of the EMPLOYEE
before the expiration of the TERM without JUST CAUSE and within six months
before a CHANGE OF CONTROL or within one year after a CHANGE OF CONTROL,
then the following shall occur:
(A) XXXXXX shall promptly pay to the EMPLOYEE or to his dependents,
beneficiaries or estate $85,250 within seven (7) days after such
termination;
(B) The EMPLOYEE, his dependents, beneficiaries and estate shall be
covered under either the health, life and disability plans of the
EMPLOYER or the health, life and disability plans of the successors,
survivors or assigns of the EMPLOYERS without any material
diminution in coverage or benefit of the expense of the EMPLOYERS or
the successors, survivors or assigns of the EMPLOYERS as if the
EMPLOYEE were still employed under this AGREEMENT until the earliest
of the expiration of the TERM or the date on which the EMPLOYEE is
included in another employer's benefit plans as a full-time
employee; and
(C) The EMPLOYEE shall not be required to mitigate the amount of any
payment provided for in this AGREEMENT by seeking other employment
or otherwise, nor shall any amounts received from other employment
or otherwise by the EMPLOYEE offset in any manner the obligations of
XXXXXX hereunder, except as specifically stated in subparagraph (B).
(ii)The EMPLOYEE may voluntarily terminate his employment pursuant to this
AGREEMENT within one year following a CHANGE OF CONTROL and shall be
entitled to compensation as set forth in Section 2(c)(i) of this AGREEMENT
in the event that:
(A) The present capacity or circumstances in which the EMPLOYEE is
employed are materially adversely changed (including, without
limitation, a material reduction in responsibilities or authority,
or the assignment of duties or responsibilities substantially
inconsistent with those normally associated with the position of
Secretary and Treasurer) without the EMPLOYEE's written consent;
(B) The EMPLOYEE is no longer the Secretary and Treasurer of XXXXXX;
(C) The EMPLOYEE is required to move his personal residence, or
perform his principal executive functions, more than thirty-five
(35) miles from his primary office as of the date of the
commencement of the TERM of this AGREEMENT; or
(D) XXXXXX otherwise breaches this AGREEMENT in any material
respect.
In the event that the value of the payments pursuant to this subsection
(c), when combined with the value of other payments attributable to the
same CHANGE OF CONTROL, would result in the imposition of a penalty tax
pursuant to Section 280G(b)(3) of the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder (hereinafter
collectively referred to as "SECTION 280G"), such payments shall be
reduced to the maximum amount which may be paid under SECTION 280G without
exceeding such limits. Payments pursuant to this subsection (c) also may
not exceed applicable limits established by the Office of Thrift
Supervision (hereinafter
referred to as the "OTS"), as set forth in OTS Regulatory Bulletin 32-12.
In the event a reduction in payments is necessary in order to comply with
the requirements of this AGREEMENT relating to the limitations of SECTION
280G or applicable OTS limits, the EMPLOYEE may determine, in his sole
discretion, which categories of payments are to be reduced or eliminated.
(d) Death of the EMPLOYEE. The TERM shall automatically terminate upon the
death of the EMPLOYEE, unless the employment of EMPLOYEE has been
terminated prior to EMPLOYEE's death pursuant to Section 2(c) of this
AGREEMENT. In the event of such death, the EMPLOYEE'S estate shall be
entitled to receive the compensation due the EMPLOYEE through the last day
of the calendar month in which the death occurred, except as otherwise
specified herein.
(e) "Golden Parachute" Provision. Any payments made to the EMPLOYEE
pursuant to this AGREEMENT, or otherwise, are subject to and conditioned
upon their compliance with 12 U.S.C.Section1828(k) and FDIC regulation 12
C.F.R. Part 359, Golden Parachute and Indemnification Payments.
(f) Definition of "CHANGE OF CONTROL". A "CHANGE OF CONTROL" shall mean
any one of the following events: (i) the acquisition of ownership or power
to vote more than 25% of the voting stock of XXXXXX or Xxxxxx Financial
Corporation, an Ohio corporation (hereinafter referred to as "WFC"); (ii)
the acquisition of the ability to control the election of a majority of
the directors of either of XXXXXX or WFC; (iii) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of WFC or WINTON cease for any reason to
constitute at least a majority thereof; provided, however, that any
individual whose election or nomination for election as a member of the
Board of Directors of WFC or XXXXXX was approved by a vote of at least
two-thirds of the directors then in office shall be considered to have
continued to be a member of the Board of Directors of WFC or XXXXXX; or
(iv) the acquisition by any person or entity of "conclusive control" of
XXXXXX within the meaning of 12 C.F.R. Section574.4(a), or the acquisition
by any person or entity of "rebuttable control" within the meaning of 12
C.F.R. Section574.4(b) that has not been rebutted in accordance with 12
C.F.R. Section574.4(c). For purposes of this paragraph, the term "person"
refers to an individual or corporation, partnership, trust, association,
or other organization, but does not include the EMPLOYEE and any person or
persons with whom the EMPLOYEE is "acting in concert" within the meaning
of C.F.R. Part 574.
(g) Legal Fees. XXXXXX shall promptly pay all legal fees and expenses
which the EMPLOYEE may incur as a result of the EMPLOYEE or XXXXXX
contesting the validity or enforceability of this AGREEMENT if a court of
competent jurisdiction renders a final decision in favor of the EMPLOYEE
with respect to any such contest, or to the extent agreed to by XXXXXX and
the EMPLOYEE in an agreement of settlement with respect to any such
contest.
3. Special Regulatory Events. Notwithstanding Section 2 of this AGREEMENT,
the obligations of XXXXXX to the EMPLOYEE shall be as follows in the event of
the following circumstances:
(a) If the EMPLOYEE is suspended and/or temporarily prohibited from
participating in the conduct of XXXXXX'X affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act
(hereinafter referred to as the "FDIA"), XXXXXX'X obligations under this
AGREEMENT shall be suspended as of the date of service of such notice,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, XXXXXX shall (i) pay the EMPLOYEE all of the compensation
withheld while the obligations in this AGREEMENT were suspended and (ii)
reinstate any of the obligations that were suspended.
(b) If the EMPLOYEE is removed and/or permanently prohibited from
participating in the conduct of XXXXXX'X affairs by an order issued under
Section 8(e)(4) or (g)(1) of the FDIA, all obligations of XXXXXX
under this AGREEMENT shall terminate as of the effective date of such
order; provided, however, that vested rights of the EMPLOYEE shall not be
affected by such termination.
(c) If XXXXXX is in default as defined in Section 3(x)(1) of the FDIA, all
obligations under this AGREEMENT shall terminate as of the date of
default; provided, however, that vested rights of the EMPLOYEE shall not
be affected.
(d) All obligations under this AGREEMENT shall be terminated, except to
the extent of a determination that the continuation of this AGREEMENT is
necessary for the continued operation of XXXXXX, (i) by the Director of
the OTS, or his or her designee, at the time that the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or
on behalf of XXXXXX under the authority contained in Section 13(c) of the
FDIA; or (ii) by the Director of the OTS, or his or her designee, at any
time the Director of the OTS, or his or her designee, approves a
supervisory merger to resolve problems related to the operation of XXXXXX
or when XXXXXX is determined by the Director of the OTS to be in an unsafe
or unsound condition. No vested rights of the EMPLOYEE shall be affected
by any such action.
4. Consolidation, Merger or Sale of Assets. Nothing in this AGREEMENT
shall preclude XXXXXX from consolidating with, merging into, or transferring
all, or substantially all, of its assets to another corporation that assumes all
of XXXXXX'X obligations and undertakings hereunder. Upon such a consolidation,
merger or transfer of assets, the term "XXXXXX" as used herein shall mean such
other corporation or entity and this AGREEMENT shall continue in full force and
effect; provided, however, that the assumption of the EMPLOYERS' obligations and
undertakings hereunder shall not affect the EMPLOYEE'S right to payments
pursuant to Section 2(c)(i)(A) of this AGREEMENT in connection with such
consolidation, merger or transfer of assets.
5. Confidential Information. The EMPLOYEE acknowledges that during his
employment he will learn and have access to confidential information regarding
XXXXXX and WFC, and their customers and businesses. The EMPLOYEE agrees and
covenants not to disclose or use for his own benefit, or the benefit of any
other person or entity, any confidential information, unless or until XXXXXX and
WFC consent to such disclosure or use or such information becomes common
knowledge in the industry or is otherwise legally in the public domain. The
EMPLOYEE shall not knowingly disclose or reveal to any unauthorized person any
confidential information relating to XXXXXX and WFC, their parents, subsidiaries
or affiliates, or to any of the businesses operated by them, and the EMPLOYEE
confirms that such information constitutes the exclusive property of XXXXXX and
WFC. The EMPLOYEE shall not otherwise knowingly act or conduct himself (a) to
the material detriment of XXXXXX and WFC, their parents, subsidiaries or
affiliates, or (b) in a manner which is inimical or contrary to the interests of
XXXXXX and WFC.
6. Nature of Employment. Nothing contained in this AGREEMENT shall create
any employment relationship between XXXXXX and the EMPLOYEE other than an
employment relationship which is terminable "at will." XXXXXX may terminate the
EMPLOYEE'S employment at any time, subject to providing any payments specified
herein in accordance with the terms hereof.
7. Nonassignability. Neither this AGREEMENT nor any right or interest
hereunder shall be assignable by the EMPLOYEE, his beneficiaries or his legal
representatives without XXXXXX'X prior written consent; provided, however, that
nothing in this Section 7 shall preclude (a) the EMPLOYEE from designating a
beneficiary to receive any benefits payable hereunder upon his death, or (b) the
executors, administrators, or other legal representatives of the EMPLOYEE or his
estate from assigning any rights hereunder to the person or persons entitled
thereto.
8. No Attachment. Except as required by law, no right to receive payment
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 of assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
9. Binding Agreement. This AGREEMENT shall be binding upon, and inure to
the benefit of, the EMPLOYEE and XXXXXX and their respective permitted
successors and assigns.
10. Amendment of AGREEMENT. This AGREEMENT may not be modified or amended,
except by an instrument in writing signed by the parties hereto.
11. Waiver. No term or condition of this AGREEMENT shall be deemed to have
been waived, nor shall there be an 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 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 the act specifically waived.
12. Severability. If, for any reason, any provision of this AGREEMENT is
held invalid, such invalidity shall not affect the other provisions of this
AGREEMENT not held so invalid, and each such other provision shall, to the full
extent consistent with applicable law, continue in full force and effect.
13. Headings. The headings of the paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this AGREEMENT.
14. Governing Law; Regulatory Authority. This AGREEMENT has been executed
and delivered in the State of Ohio and its validity, interpretation, performance
and enforcement shall be governed by the laws of the State of Ohio, except to
the extent that federal law is governing. References to the OTS included herein
shall include any successor primary federal regulatory authority of XXXXXX.
15. Effect of Prior Agreements. This AGREEMENT contains the entire
understanding between the parties hereto and supersedes any other prior
agreement between XXXXXX or any predecessor of XXXXXX and the EMPLOYEE.
16. Notices. Any notice or other communication required or permitted
pursuant to this AGREEMENT shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:
If to XXXXXX:
President
The Xxxxxx Savings and Loan Co.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000-0000
With copies to:
Xxxx X. Xxxxx, Esq.
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
Suite 2000, Atrium Two
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
If to the EMPLOYEE:
Xxxxxxx X. Xxxxxx
--------------------------
Cincinnati, Ohio
IN WITNESS WHEREOF, XXXXXX has caused this AGREEMENT to be executed by its
duly authorized officer, and the EMPLOYEE has signed this AGREEMENT, each as of
the day and year first above written.
Attest: THE XXXXXX SAVINGS AND LOAN CO.
/s/ Xxxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxx
--------------------------------- --------------------------------
its President
--------------------------------
Attest:
/s/ Xxxx Xxxx Xxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
