Exhibit 10.3
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CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into
this _______________, 2003 ("Effective Date"), by and between CHEVIOT SAVINGS
BANK ("Association") and XXXXXXX XXXXXX ("Employee").
WHEREAS, Employee is currently employed by Association as the Chief
Lending Officer and is experienced in all phases of the business of Association;
and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of Association and Employee if Association should undergo a
change in control (as defined hereinafter in the Agreement) after the Effective
Date.
NOW THEREFORE, it is agreed as follows:
1. Employment. Employee is employed in the capacity as the Chief Lending
Officer of Association. Employee will render such administrative and
management services to Association and Cheviot Financial Corp.
("Parent") as are currently rendered and as are customarily performed
by persons situated in a similar executive capacity. Employee will
promote to the extent permitted by law the business of Association and
Parent. Employee's other duties will be such as the Board of Directors
for Association (the "Board of Directors" or "Board") may from time to
time reasonably direct, including normal duties as an officer of
Association.
2. Terms of Agreement. The term of this Agreement will be for the period
commencing on the Effective Date and ending thirty-six (36) months
thereafter. Additionally, on, or before, each annual anniversary date
from the Effective Date, the term of this Agreement will be extended
for an additional one-year period beyond the then effective expiration
date upon a determination and resolution of the Board of Directors that
the performance of Employee has met the requirements and standards of
the Board, and that the term of such Agreement will be extended.
3. Termination of Employment in Connection with or Subsequent to a Change
in Control.
3.1 Involuntary Termination. Notwithstanding any provision herein
to the contrary, in the event of the involuntary termination
of Employee's employment under this Agreement, absent Cause,
in connection with, or within twelve (12) months after, any
change in control of Association or Parent, Employee will be
paid an amount equal to two times the prior calendar year's
cash compensation paid to Employee by Association (whether
said amounts were received or deferred by Employee). Said sum
will be paid, at the option of Employee, either in one (1)
lump sum not later than the date of such termination of
employment or in periodic payments
over the next 24 months, and such payments will be in lieu of
any other future payments which Employee would be otherwise
entitled to receive. Notwithstanding the foregoing, all sums
payable hereunder will be reduced in such manner and to such
extent so that no such payments made hereunder when aggregated
with all other payments to be made to Employee by Association
or the Parent will be deemed an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Codes of
1986, as amended (the "Code"), and be subject to the excise
tax provided at Section 4999(a) of the Code. The term
"control" will refer to the ownership, holding or power to
vote more than 25% of the Parent's or Association's voting
stock, the control of the election of a majority of the
Parent's or Association's directors, or the exercise of a
controlling influence over the management or policies of the
Parent or Association by any person or by persons acting as a
group within the meaning of Section 13(d) of the Securities
Exchange Act of 1934. The term "person" means an individual
other than Employee, or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form
of entity not specifically listed herein.
3.2 Voluntary Termination. Notwithstanding any other provision of
this Agreement to the contrary, Employee may voluntarily
terminate his employment under this Agreement within twelve
(12) months following a change in control of Association or
Parent, and Employee will thereupon be entitled to receive the
payment described in Section 3.1 of this Agreement, upon the
occurrence, or within ninety (90) days thereafter, of any of
the following events, which have not been consented to in
advance by Employee in writing: (i) if Employee would be
required to move his personal residence or perform his
principal executive functions more than thirty-five (35) miles
from Employee's primary office as of the signing of this
Agreement; (ii) if in the organizational structure of
Association or Parent, Employee would be required to report to
a person or persons other than the President of Association or
Parent; (iii) if Association or Parent should fail to maintain
existing employee benefits plans, including material fringe
benefit, stock option and retirement plans, except to the
extent that such reduction in benefit programs is part of an
overall adjustment in benefits for all employees of
Association or Parent and does not disproportionately
adversely impact Employee; (iv) if Employee would be assigned
duties and responsibilities other than those normally
associated with his position as referenced at Section 1,
herein, for a period of more than six (6) months, or if such
additional assigned duties and responsibilities result in
additional cost to be incurred by Employee not otherwise
associated with the previously assigned duties and
responsibilities, which costs are not reimbursed by
Association within forty-five (45) days of being incurred; or
(v) if Employee's responsibilities or authority have in any
way been materially diminished or reduced for a period of more
than six (6) months.
3.3 Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, will be
settled by arbitration in accordance with the rules then in
effect of the district office of the American Arbitration
Association ("AAA") nearest to the home office of Association,
and judgment
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upon the award rendered may be entered in any court having
jurisdiction thereof, except to the extent that the parties
may otherwise reach a mutual settlement of such issue.
Association will incur the cost of all fees and expenses
associated with filing a request for arbitration with the AAA,
whether such filing is made on behalf of Association or
Employee, and the costs and administrative fees associated
with employing the arbitrator and related administrative
expenses assessed by the AAA. Association will reimburse
Employee for all costs and expenses, including reasonable
attorneys' fees, arising from such dispute, proceedings or
actions, notwithstanding the ultimate outcome thereof,
following the delivery of the decision of the arbitrator
finding in favor of Employee or settlement of the matter;
provided that if such finding of the Arbitrator is not in
favor of Employee, then such Employee will reimburse
Association for the initial filing fee paid by Association to
the AAA. Such settlement to be approved by the Board of
Association or the Parent may include a provision for the
reimbursement by Association or Parent to Employee for all
costs and expenses, including reasonable attorneys' fees,
arising from such dispute, proceedings or actions, or the
Board of Association or the Parent may authorize such
reimbursement of such costs and expenses by separate action
upon a written action and determination of the Board. Such
reimbursement will be paid within ten (10) days of Employee
furnishing to Association or Parent evidence, which may be in
the form, among other things, of a canceled check or receipt,
of any costs or expenses incurred by Employee.
4. Other Changes in Employment Status.
4.1 Notwithstanding the provisions of Section 3, herein, the Board
of Directors may terminate Employee's employment at any time,
but any termination by the Board of Directors other than
termination for Cause, will not prejudice Employee's right to
compensation or other benefits under the Agreement. Employee
will have no right to receive compensation or other benefits
for any period after termination for Cause. Termination for
"Cause" will include termination because of Employee's
personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material
breach of any provision of the Agreement.
4.2 If Employee is removed and/or permanently prohibited from
participating in the conduct of Association's affairs by an
order issued under Sections 8(e)(4) or 8(g)(l) of the Federal
Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) and
(g)(1)), all obligations of Association under this Agreement
will terminate, as of the effective date of the order, but the
vested rights of the parties will not be affected.
4.3 If this Association is in default (as defined in Section
3(x)(l) of FDIA), all obligations under this Agreement will
terminate as of the date of default, but this Section will not
affect any vested rights of the contracting parties.
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4.4 All obligations under this Agreement will be terminated,
except to the extent determined that continuation of this
Agreement is necessary for the continued operation of
Association: (i) by the Director of the Office of Thrift
Supervision ("Director of OTS") or his or her designee, at the
time that the Federal Deposit Insurance Corporation ("FDIC")
enters into an agreement to provide assistance to or on behalf
of Association under the authority continued in Section 13(c)
of FDIA; or (ii) by the Director of the OTS, or his or her
designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems
related to operation of Association or when Association is
determined by the Director of the OTS to be in an unsafe or
unsound condition. Any rights of the parties that have already
vested, however, will not be affected by such action.
4.5 Notwithstanding anything herein to the contrary, any payments
made to Employee pursuant to the Agreement, or otherwise, will
be subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and any regulations promulgated thereunder.
5. Suspension of Employment. If Employee is suspended and/or temporarily
prohibited from participating in the conduct of Association's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818 (e)(3) and (g)(1)), Association's obligations under the
Agreement shall be suspended as of the date of service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed,
Association may in its discretion, (i) pay Employee all or part of the
compensation withheld while its contract obligations were suspended,
and (ii) reinstate (in whole or in part) any of its obligations which
were suspended.
6. Successors and Assigns.
6.1 This Agreement will inure to the benefit of and be binding
upon any corporate or other successor of Association which
will acquire, directly or indirectly, by merger,
consolidation, purchase or otherwise, all or substantially all
of the assets or stock of Association.
6.2 Employee will be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written
consent of Association.
7. Amendments. No amendments or additions to this Agreement will be
binding upon the parties hereto unless made in writing and signed by
both parties, except as herein otherwise specifically provided.
8. Applicable Law. This Agreement will be governed by all respects whether
as to validity, construction, capacity, performance or otherwise, by
the laws of the State of Ohio, except to the extent that Federal law
will be deemed to apply.
9. Severability. The provisions of this Agreement will be deemed severable
and the invalidity or unenforceability of any provision will not affect
the validity or enforceability of the other provisions hereof.
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10. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, will
constitute the entire agreement between the parties hereto.
Signed as of _______________________, 2003.
ASSOCIATION:
CHEVIOT SAVINGS BANK
By:
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Xxxxxx X. Xxxxxxxx
President and CEO
EMPLOYEE:
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Xxxxxxx Xxxxxx
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