AMENDMENT TO EMPLOYMENT AGREEMENT BY AND BETWEEN FRANKLIN SAVINGS AND LOAN COMPANY AND JOHN OWENS
Exhibit 10(r)
This Amendment (this “Amendment”) to the Employment Agreement (“Agreement”) by and between
Franklin Savings and Loan Company (“Employer”) and Xxxx Xxxxx (“Employee”), effective as of
December 20, 2004, is effective as of the 30th day of December, 2008.
RECITALS
WHEREAS, the Employer and the Employee previously entered into the Agreement with a term
ending on December 20, 2011, as extended by the Employer pursuant to an Employment Agreement
Extension effective March 31, 2008; and
WHEREAS, the Employer and the Employee desire to amend the Agreement to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended, effective as of the
date first set forth above.
AMENDMENT
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Employer and the
Employee hereby agree as follows:
| 1. | Section 4(a)(i) of the Agreement is hereby deleted in its entirety and replaced with the following: |
(i) The Employer shall promptly, but in no event later than sixty (60) days
following the Employee’s termination, pay to the Employee or to his beneficiaries,
dependents or estate an amount equal to three times the Employee’s “average annual
compensation” as such term is defined in Section 280G of the Internal Revenue Code
of 1986, as amended (“Code”).
| 2. | Section 4(b) of the Agreement is hereby deleted in its entirety and replaced with the following: |
(b) Termination without Change of Control. In the event that the Employer
terminates the employment of the Employee for any reason other than Just Cause, and
the termination is not in connection with a Change of Control pursuant to Section
4(a) of this Agreement, the Employer shall be obligated to continue to (i) pay on a
monthly basis to the Employee, his designated beneficiaries or his estate, his
annual salary provided pursuant to Section 3(a) of this Agreement as of the
date of termination for a period of 12 months (provided, however, that the amount so
payable shall not exceed the lesser of (a) two times the Employee’s annualized
compensation or (b) two times the maximum amount that may be taken into account
under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in
which the Employee terminates); and (ii) provide to the Employee, his eligible
dependents and beneficiaries, at the Employer’s expense, group health benefits,
hospitalization and disability benefits substantially equal to those being provided
to the Employee at the date of termination of his employment, to the extent
permitted under the terms of such plans, until the earliest to occur of: (A) the
first anniversary of the effective date of the Employee’s termination, or (B) the
Employee is included in another employer’s plans providing comparable benefits and
coverage.
| 3. | New Section 4(g) is hereby added to the Agreement as follows: |
(g) Reimbursement or Payment of Certain Expenses. Notwithstanding the foregoing,
(i) any amounts or benefits that will be paid or provided under Section 4(a)(ii) or
4(b)(ii) with respect to group health or hospitalization benefits after completion
of the time period described in Treasury Regulation §1.409A-1(b)(9)(v)(B), and (ii)
any amounts or benefits that will be paid or provided under Section 4(a)(ii) or
4(b)(ii) with respect to disability insurance coverage shall be subject to the
following: (A) the amount of expenses eligible for reimbursement, or benefits
provided, during any taxable year of the Employee may not affect the expenses
eligible for reimbursement, or benefits to be provided, to the Employee in any other
taxable year; (B) the reimbursement of any eligible expense must be made on or
before the last day of the Employee’s taxable year following the Employee’s taxable
year in which the expense was incurred; and (C) the right to reimbursement or
benefits is not subject to liquidation or exchange for another benefit.
| 4. | New Section 4(h) is hereby added to the Agreement as follows: |
(h) Definition of “Termination”. For purposes of this Agreement, no payment on
account of the Employee’s “termination” shall be made pursuant to this Agreement
unless such termination also constitutes a “separation from service” within the
meaning of Section 409A of the Code by Employee from the Employer and all entities
with whom the Employer would be treated as a single employer under Sections 414(b)
and (c) of the Code.
| 5. | New Section 4(i) is hereby added to the Agreement as follows: |
(i) 6-Month Delay for Certain Payments. Notwithstanding the foregoing, if the
Employee is a “specified employee” of the Employer (within the meaning of Section
409A of the Code and as determined under the Employer’s policy for determining
specified employees) on the date of his termination, and the Employee is entitled to
a payment and/or a benefit under this Agreement that is
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required to be delayed pursuant to Section 409A(a)(2) of the Code, then such payment
or benefit shall not be paid or provided (or begin to be paid or provided) until the
first business day of the seventh month following the Employee’s date of termination
(or, if earlier, the Employee’s death). The first payment that can be made
following such postponement period shall include the cumulative amount of any
payments or benefits that could not be paid or provided during such postponement
period due to the application of Section 409A(a)(2)(B)(i) of the Code.
| 6. | Section 5(a) of the Agreement is hereby amended by adding the following sentence to the end thereof: |
To the extent that applicable law requires that payments of deferred compensation
subject to Section 409A of the Code be delayed, such payment shall be made on the
earliest date that the Employer reasonably believes that payment will comply with
applicable law.
| 7. | New Section 16 is hereby added to the Agreement as follows: |
16. Section 409A of the Code. The parties intend that this Agreement comply with,
or be exempt from, the requirements of Section 409A of the Code, as applicable, and,
to the maximum extent permitted by law, shall administer, operate and construe this
Agreement accordingly. Nothing herein shall be construed as the guarantee of any
particular tax treatment to the Employee. The Company shall have no liability in
the event this Agreement fails to comply with the requirements of Section 409A of
the Code.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date first
set forth above.
| EMPLOYER | EMPLOYEE | |||||||
| FRANKLIN SAVINGS AND LOAN COMPANY | /s/ Xxxx X. Xxxxx | |||||||
By:
|
/s/ Xxxxxxxx X. Xxxxxxx | |||||||
| Printed Name: Xxxxxxxx X. Xxxxxxx | ||||||||
Its:
|
President | |||||||
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