EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), entered into as of the 1st day of January, 2004, by and among
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 of WFC (hereinafter referred to as "XXXXXX"), and Xxxxxx
X. Xxxxxx, an individual (hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is currently employed as President 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 January 1, 2004 and shall end on
December 31, 2006 (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 $213,000 until changed by the Boards of Directors of
the EMPLOYERS in accordance with Section 3(b) of this AGREEMENT or otherwise.
(b) Annual Salary Review. Each year throughout the TERM, the
annual salary and annual bonus of the EMPLOYEE shall be reviewed by the
Compensation Committee of the Board of Directors of XXXXXX and shall be set,
effective January l of the following year, at a total amount of not less than
$230,000, 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 Compensation Committee.
(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 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 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 termination of employment; provided
further, however, that the EMPLOYEE and his spouse 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 similarly situated 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.
Section 4. Termination of Employment.
(a) General. The employment of the EMPLOYEE shall terminate at any
time during the TERM (i) at the option of the EMPLOYERS, upon the delivery by
the EMPLOYERS of written notice of termination to the EMPLOYEE, or (ii) at the
option of the EMPLOYEE, upon delivery by the EMPLOYEE of written notice of
termination to the EMPLOYERS if the present capacity or circumstances in which
the EMPLOYEE is employed are materially adversely changed without the EMPLOYEE's
written consent, including, but not limited to, a material reduction in
responsibilities or authority, the assignment of duties or responsibilities
substantially inconsistent with those normally associated with the EMPLOYEE'S
position described in Section 2(a) of this AGREEMENT, a change of title, the
requirement that the EMPLOYEE regularly perform his principal executive
functions more than thirty-five (35) miles from his primary office as of the
date of this AGREEMENT or the reduction of the EMPLOYEE'S benefits provided
under this AGREEMENT, unless the benefit reductions are part of a company-wide
reduction. The following subsections (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, the employment of the EMPLOYEE is
terminated for any reason other than JUST CAUSE or is terminated by the
EMPLOYEE as provided in Section 4(a)(ii) above, then the following
shall occur:
(A) The EMPLOYERS shall promptly pay to the EMPLOYEE or to his
dependents, beneficiaries 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 EMPLOYEE'S "base amount" [as defined
in Section 280G(b)(3) of the Internal Revenue Code of 1986, as
amended and applicable regulations of the Internal Revenue
Service] as of the date of the CHANGE OF CONTROL, less (y) the
sum of (i) $1.00 plus (ii) the amount paid to the EMPLOYEE
pursuant to clause (l) of this subparagraph (A);
(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 at 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 the EMPLOYERS hereunder, except as
specifically stated in subparagraph (B) above.
Provided, however, that in the event that the value of the payments
pursuant to this subsection (II), 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.
This reduction will be applied through the following procedure:
(Y) First, at least 30 days before the payment is due
under this subsection (II), the EMPLOYER will apprise the
EMPLOYEE of the value of each of the benefits payable because
of the CHANGE OF CONTROL and the maximum amount which may be
paid under SECTION 280G without exceeding such limits and
afford the EMPLOYEE an opportunity to select the benefit (or
portion of the benefit) to be reduced.
(Z) Second, if, before the end of that 30 day period, the
EMPLOYEE apprises the EMPLOYER in writing of the benefit or
benefits to be reduced (and the amount of each reduction), the
EMPLOYEE'S election will be implemented and, subject to the
next subparagraph, the adjusted payment made promptly.
But, if, before the end of that 30 day period, the EMPLOYEE does not
apprise the EMPLOYER of the benefit or benefits to be reduced or if the
amount of the reductions the EMPLOYEE specifies does not reduce the
value of all benefits payable because of the CHANGE OF CONTROL to the
maximum amount that may be paid under SECTION 280G without exceeding
such limits, the EMPLOYER will reduce the amount payable under this
agreement by an amount needed to ensure that the limits imposed under
SECTION 280G are not exceeded.
(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 death, 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 dependents, beneficiaries or 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, his
dependents, beneficiaries and estate 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; provided,
however, that 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.
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 (III)(B) above.
(b) Death of the EMPLOYEE. The TERM automatically terminates upon
the death of the EMPLOYEE, unless the employment of EMPLOYEE has been terminated
prior to EMPLOYEE's death pursuant to Section 4(a) 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.
(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. Section 1828(k) and FDIC
regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments.
(d) 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 either of the EMPLOYERS; (ii) the
acquisition of the ability to control the election of a majority of the
directors of either of the EMPLOYERS; (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. Section 574.4(a), or the
acquisition by any person or entity of "rebuttable control" within the
meaning of 12 C.F.R. Section 574.4(b) that has not been rebutted in accordance
with 12 C.F.R. Section 574.4(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 12 C.F.R. Part 574.
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 their 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
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; provided, however, that the assumption of the
EMPLOYERS' obligations and undertakings hereunder shall not affect the
EMPLOYEE'S right to payments pursuant to Section 4(a)(II) of this AGREEMENT in
connection with such consolidation, merger or transfer of assets.
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. Nonassignability. 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 10. 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.
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
Co.:
Chairman of the Board of Directors
Xxxxxx Financial Corporation
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 to:
Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
IN WITNESS WHEREOF, the EMPLOYERS have caused this AGREEMENT to be
executed by their duly authorized officers, and the EMPLOYEE has signed this
AGREEMENT, each as of the day and year first above written.
Attest: XXXXXX FINANCIAL CORPORATION
/s/ Xxxx Xxxx Xxxx By /s/ Xxxxx X. Xxxxxxxxx
---------------------------- -------------------------------
-------------------------------
its Chairman
Attest: THE XXXXXX SAVINGS AND LOAN
CO.
/s/ Xxxxx X. Hack By /s/ Xxxxx X. Xxxxxxxxx
---------------------------- -------------------------------
-------------------------------
its Chairman
Attest:
/s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxx
---------------------------- ----------------------------------
Xxxxxx X. Xxxxxx
