EXHIBIT 10.4
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (hereinafter referred to as this "AGREEMENT")
is entered into as of the 1st day of January, 2004, 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 $88,250
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 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);
(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 payments pursuant to this subsection (c) 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. 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. Section 1828(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.
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 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
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
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/ Xxxx Xxxx Xxxx By /s/ Xxxxxx X. Xxxxxx
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its President
Attest:
/s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
