EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), entered into this 22d day of May, 1998, by and between Xxxxxx
Financial Corporation, a savings and loan holding company incorporated under
Ohio law (hereinafter referred to as "WFC"), The Xxxxxx Savings and Loan Co., a
savings and loan association incorporated under Ohio law and a wholly-owned
subsidiary WFC (hereinafter referred to as "XXXXXX"), and Xxxxxx X. Xxxxxx, an
individual (hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of WFC and XXXXXX (hereinafter
collectively referred to as the "EMPLOYERS");
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Boards of Directors of the EMPLOYERS desire to retain the services
of the EMPLOYEE as the President of XXXXXX and of WFC;
WHEREAS, the EMPLOYEE desires to continue to serve as the President of
XXXXXX and of WFC; and
WHEREAS, the EMPLOYEE and the EMPLOYERS desire to enter into this
Agreement to set forth the terms and conditions of the employment relationship
between the EMPLOYERS and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYERS and the EMPLOYEE hereby agree as follows:
Section l. Employment and Term. Upon the terms and subject to the
conditions of this AGREEMENT, the EMPLOYERS hereby employ the EMPLOYEE, and the
EMPLOYEE hereby accepts employment, as the President of XXXXXX and of WFC. The
term of this AGREEMENT shall commence on the date hereof and shall end on April
30, 2001 (hereinafter referred to as the "TERM").
Section 2. Duties of EMPLOYEE.
(a) General Duties and Responsibilities. As an officer of each of the
EMPLOYERS, the EMPLOYEE shall perform the duties and responsibilities customary
for such office to the best of his ability and in accordance with the policies
established by the Boards of Directors of the EMPLOYERS and all applicable laws
and regulations. The EMPLOYEE shall perform such other duties not inconsistent
with his position as may be assigned to him from time to time by the Boards of
Directors of the EMPLOYERS; provided, however, that the EMPLOYERS shall employ
the EMPLOYEE during the TERM in a senior executive capacity without diminishment
of the importance or prestige of his position.
(b) Devotion of Entire Time to the Business of the EMPLOYERS. The
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
duties under this AGREEMENT. The EMPLOYEE shall not directly or indirectly
render any services of a business, commercial or professional nature to any
person or organization without the prior written consent of the Boards of
Directors of the EMPLOYERS; provided, however, that the EMPLOYEE shall not be
precluded from (i) vacations and other leave time in accordance with Section
3(e) hereof; (ii) reasonable participation in community, civic, charitable or
similar organizations; or (iii) the pursuit of personal investments which do not
interfere or conflict with the performance of the EMPLOYEE'S duties to the
EMPLOYERS.
Section 3. Compensation, Benefits and Reimbursements.
(a) Salary. The EMPLOYEE shall receive during the TERM an annual salary
payable in equal installments not less often than monthly. The amount of such
annual salary shall be $182,000 until changed by the Boards of Directors of the
EMPLOYER in accordance with Section 3(b) of this AGREEMENT.
(b) Annual Salary Review. In December of each year throughout the TERM,
the annual salary of the EMPLOYEE shall be reviewed by the Boards of Directors
of the EMPLOYERS and shall be set, effective January l of the following year, at
an amount not less than $182,000, based upon the EMPLOYEE'S individual
performance and the overall profitability and financial condition of the
EMPLOYERS (hereinafter referred to as the "ANNUAL REVIEW"). The results of the
ANNUAL REVIEW shall be reflected in the minutes of the Boards of Directors of
the EMPLOYERS.
(c) Expenses. In addition to any compensation received under Section
3(a) or (b) of this AGREEMENT, the EMPLOYERS shall pay or reimburse the EMPLOYEE
for all reasonable travel, entertainment and miscellaneous expenses incurred in
connection with the performance of his duties under this AGREEMENT. Such
reimbursement shall be made in accordance with the existing policies and
procedures of the EMPLOYERS pertaining to reimbursement of expenses to senior
management officials.
(d) Employee Benefit Program. (i) During the TERM, the EMPLOYEE shall
be entitled to participate in all formally established employee benefit, bonus,
pension and profit-sharing plans and similar programs that are maintained by the
EMPLOYERS from time to time, including programs in respect of group health,
disability or life insurance, reimbursement of membership fees in civic, social
and professional organizations and all employee benefit plans or programs
hereafter adopted in writing by the Boards of Directors of the EMPLOYERS, for
which senior management personnel are eligible, including any employee stock
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ownership plan, stock option plan or other stock benefit plan (hereinafter
collectively referred to as the "BENEFIT PLANS"). Notwithstanding the foregoing
sentence, the EMPLOYERS may discontinue or terminate at any time any such
BENEFIT PLANS, now existing or hereafter adopted, to the extent permitted by the
terms of such plans and shall not be required to compensate the EMPLOYEE for
such discontinuance or termination.
(ii) After the expiration of the TERM or the termination of the
employment of the EMPLOYEE for any reason other than JUST CAUSE (as defined
hereinafter), the EMPLOYERS shall provide a group health insurance program in
which the EMPLOYEE and his spouse will be eligible to participate and which
shall provide substantially the same benefits as are available to retired
employees of the EMPLOYERS on the date of this AGREEMENT until both the EMPLOYEE
and his spouse become 65 years of age; provided, however that all premiums for
such program shall be paid by the EMPLOYEE and/or his spouse after the
EMPLOYEE's retirement; provided further, however, that the EMPLOYEE may only
participate in such program for as long as the EMPLOYERS make available an
employee group health insurance program which permits the EMPLOYERS to make
coverage available for retirees.
(e) Vacation and Sick Leave. The EMPLOYEE shall be entitled, without
loss of pay, to be absent voluntarily from the performance of his duties under
this AGREEMENT, subject to the following conditions:
(i) The EMPLOYEE shall be entitled to an annual vacation in
accordance with the policies periodically established by the Boards of
Directors of the EMPLOYERS for senior management officials of the
EMPLOYERS, the duration of which shall not be less than four weeks each
calendar year;
(ii) Vacation time shall be scheduled by the EMPLOYEE in a
reasonable manner and shall be subject to approval by the Boards of
Directors of the EMPLOYERS. The EMPLOYEE shall not be entitled to
receive any additional compensation from the EMPLOYERS in the event of
his failure to take the full allotment of vacation time in any calendar
year; provided, however, that a maximum of one week of unused vacation
time in any calendar year may be carried over into any succeeding
calendar year; and
(iii) The EMPLOYEE shall be entitled to annual sick leave as
established by the Boards of Directors of the EMPLOYERS for senior
management officials of the EMPLOYERS. In the event that any sick leave
time shall not have been used during any calendar year, such leave
shall accrue to subsequent calendar years, only to the extent
authorized by the Boards of Directors of the EMPLOYERS. Upon
termination of employment, the EMPLOYEE shall not be entitled to
receive any additional compensation from the EMPLOYERS for unused sick
leave.
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Section 4. Termination of Employment.
(a) General. In addition to the termination of the employment of the
EMPLOYEE upon the expiration of the TERM, the employment of the EMPLOYEE shall
terminate at any other time during the TERM upon the delivery by the EMPLOYERS
of written notice of employment termination to the EMPLOYEE. Without limiting
the generality of the foregoing sentence, the following subparagraphs (i), (ii)
and (iii) of this Section 4(a) shall govern the obligations of the EMPLOYERS to
the EMPLOYEE upon the occurrence of the events described in such subparagraphs:
(i) Termination for JUST CAUSE. In the event that the
EMPLOYERS terminate the employment of the EMPLOYEE during 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 or final cease-and-desist order (other than
traffic violations or similar offenses), 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.
(ii) Termination after CHANGE OF CONTROL. In the event that,
before the expiration of the TERM and in connection with or within one
year of a CHANGE OF CONTROL (as defined hereinafter) of either one of
the EMPLOYERS, (A) the employment of the EMPLOYEE is terminated for any
reason other than JUST CAUSE before the expiration of the TERM, (B) the
present capacity or circumstances in which the EMPLOYEE is employed is
changed before the expiration of the TERM, or (C) the EMPLOYEE'S
responsibilities, authority, compensation or other benefits provided
under this AGREEMENT are materially reduced, then the following shall
occur:
(I) The EMPLOYERS shall promptly pay to the EMPLOYEE
or to his beneficiaries, dependents or estate an amount equal
to the sum of (l) the amount of compensation to which the
EMPLOYEE would be entitled for the remainder of the TERM under
this AGREEMENT, plus (2) the difference between (x) the
product of three, multiplied by the greater of the annual
salary set forth in Section 3(a) of this AGREEMENT or the
annual salary payable to the EMPLOYEE as a result of any
ANNUAL REVIEW, less (xx) the amount paid to the EMPLOYEE
pursuant to clause (l) of this subparagraph (I);
(II) The EMPLOYEE, his dependents, beneficiaries and
estate shall continue to be covered under all BENEFIT PLANS of
the EMPLOYERS at the EMPLOYERS' expense 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
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(III) 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 the EMPLOYERS
hereunder, except as specifically stated in subparagraph (II).
In the event that payments pursuant to this subsection (ii) 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.
(iii) Termination Without CHANGE OF CONTROL. In the event that
the employment of the EMPLOYEE is terminated before the expiration of
the TERM for any reason other than JUST CAUSE or in connection with or
within one year of a CHANGE OF CONTROL, the EMPLOYERS shall be
obligated to continue (A) to pay on a monthly basis to the EMPLOYEE,
his designated beneficiaries or his estate, his annual salary provided
pursuant to Section 3(a) or (b) of this AGREEMENT until the expiration
of the TERM and (B) to provide to the EMPLOYEE at the EMPLOYERS'
expense, health, life, disability, and other benefits substantially
equal to those being provided to the EMPLOYEE at the date of
termination of his employment until the earliest to occur of the
expiration of the TERM or the date the EMPLOYEE becomes employed
full-time by another employer. In the event that payments pursuant to
this subsection (iii) would result in the imposition of a penalty tax
pursuant to SECTION 280G, such payments shall be reduced to the maximum
amount which may be paid under SECTION 280G without exceeding those
limits.
(b) Death of the EMPLOYEE. The TERM automatically terminates upon the
death of the EMPLOYEE. 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.
(c) "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. ss.1828(k) and any regulations promulgated
thereunder.
(d) Definition of "CHANGE OF CONTROL". A "CHANGE OF CONTROL" shall be
deemed to have occurred in the event that, at any time during the TERM, either
any person or entity obtains "conclusive control" of the EMPLOYERS within the
meaning of 12 C.F.R. ss.574.4(a), or any person or entity obtains "rebuttable
control" within the meaning of 12 C.F.R. ss.574.4(b) and has not rebutted
control in accordance with 12 C.F.R. ss.574.4(c).
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Section 5. Special Regulatory Events. Notwithstanding Section 4 of
this AGREEMENT, the obligations of the EMPLOYERS 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 the EMPLOYERS' 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"), the EMPLOYERS' 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, the
EMPLOYERS may, in its discretion, pay the EMPLOYEE all or part of the
compensation withheld while the obligations in this AGREEMENT were suspended and
reinstate, in whole or in part, any of the obligations that were suspended.
(b) If the EMPLOYEE is removed and/or permanently prohibited from
participating in the conduct of the EMPLOYERS' affairs by an order issued under
Section 8(e) (4) or (g) (l) of the FDIA, all obligations of the EMPLOYERS 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 the EMPLOYERS are 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 the EMPLOYERS, (i) by the Director of
the Office of Thrift Supervision (hereinafter referred to as the "OTS"), or his
or her designee at the time that the Federal Deposit Insurance Corporation or
the Resolution Trust Corporation enters into an agreement to provide assistance
to or on behalf of the EMPLOYERS 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 the EMPLOYERS or when the
EMPLOYERS are 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.
Section 6. Consolidation, Merger or Sale of Assets. Nothing in this
AGREEMENT shall preclude the EMPLOYERS from consolidating with, merging into, or
transferring all, or substantially all, of their assets to another corporation
that assumes all of the EMPLOYERS' obligations and undertakings hereunder. Upon
such a consolidation, merger or transfer of assets, the term "EMPLOYERS" as used
herein, shall mean such other corporation or entity, and this AGREEMENT shall
continue in full force and effect.
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Section 7. Confidential Information. The EMPLOYEE acknowledges that
during his employment he will learn and have access to confidential information
regarding the EMPLOYERS 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 the
EMPLOYERS 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 the EMPLOYERS, their subsidiaries or
affiliates, or to any of the businesses operated by them, and the EMPLOYEE
confirms that such information constitutes the exclusive property of the
EMPLOYERS. The EMPLOYEE shall not otherwise knowingly act or conduct himself (a)
to the material detriment of the EMPLOYERS, their subsidiaries, or affiliates,
or (b) in a manner which is inimical or contrary to the interests of the
EMPLOYERS.
Section 8. Nonassignabilitv. Neither this AGREEMENT nor any right or
interest hereunder shall be assignable by the EMPLOYEE, his beneficiaries, or
legal representatives without the EMPLOYERS' prior written consent; provided,
however, that nothing in this Section 8 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.
Section 9. 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.
Section l0. Binding Agreement. This AGREEMENT shall be binding upon,
and inure to the benefit of, the EMPLOYEE and the EMPLOYERS and their respective
permitted successors and assigns.
Section 11. Amendment of AGREEMENT. This AGREEMENT may not be modified
or amended, except by an instrument in writing signed by the parties hereto.
Section 12. 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.
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Section 13. 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. If this AGREEMENT is held invalid or cannot be enforced, then any prior
AGREEMENT between the EMPLOYERS (or any predecessor thereof) and the EMPLOYEE
shall be deemed reinstated to the full extent permitted by law, as if this
AGREEMENT had not been executed.
Section 14. 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.
Section 15. Governing Law. 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 this State of Ohio, except to
the extent that federal law is governing.
Section 16. Effect of Prior Agreements. This AGREEMENT contains the
entire understanding between the parties hereto and supersedes any prior
employment agreement between the EMPLOYERS and the EMPLOYEE, each of which is
hereby terminated and is of no further force or effect.
Section 17. 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 Financial Corporation and/or The Xxxxxx Savings & Loan
Company:
Xxxxxx Financial Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000-0000
With copies to:
Xxxx X. Xxxxx, Esq.
Vorys, Xxxxx, Xxxxxxx and Xxxxx
Atrium Two, Suite 2100
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
If to the EMPLOYEE to:
Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
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IN WITNESS WHEREOF, the EMPLOYERS have 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: XXXXXX FINANCIAL CORPORATION
_____________________________ By ________________________________
________________________________
its ____________________________
Attest: THE XXXXXX SAVINGS AND LOAN CO.
_____________________________ By ________________________________
________________________________
its ____________________________
Attest:
_____________________________ ________________________________
Xxxxxx X. Xxxxxx
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