EXHIBIT 10.4
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), entered into this 1st day of October, 2001, by and between
First Federal Bancorp, Inc., a savings and loan holding company incorporated
under Ohio law (hereinafter referred to as "Bancorp"), First Federal Savings
Bank of Eastern Ohio, a savings bank chartered under the laws of the United
States and a wholly-owned subsidiary of Bancorp (hereinafter referred to as
"First Federal"), and Xxxxxx Xxxxx XxXxxxxx, an individual (herein after
referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of Bancorp and First Federal
(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 Senior Vice President and Treasurer of each
of the EMPLOYERS;
WHEREAS, the EMPLOYEE desires to continue to serve as the Senior Vice
President and Treasurer of each of the EMPLOYERS; 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:
1. 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 Senior Vice President and
Treasurer of each of the EMPLOYERS. The term of this AGREEMENT shall
commence on the date hereof and shall end on September 30, 2004 (hereinafter
referred to as the "TERM"). In September of each year, the Boards of
Directors of the EMPLOYERS shall review the EMPLOYEE's performance and
record the results of such review in the minutes of the Board of Directors.
2. Duties of EMPLOYEE.
(a} General Duties and Responsibilities. As the Senior Vice
President and Treasurer of each of the EMPLOYERS, the EMPLOYEE shall
perform the duties and
responsibilities customary for such offices to the best of her 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 her
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 her
position.
(b) Devotion of Entire Time to the Business of the EMPLOYERS.
The EMPLOYEE shall devote her entire productive time, ability and
attention during normal business hours throughout the TERM to the
faithful performance of her 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.
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 $106,288.00 until
changed by the Boards of Directors of the EMPLOYERS in accordance with
Section 3(b) of this AGREEMENT.
(b) Annual Salary Review. In September 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 October 1, at an amount not less than $106,288.00, 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
her 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
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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 anagement
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 her 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 her spouse become 65
years of age; provided, however that all premiums for such
program shall be paid equally by the EMPLOYERS and the EMPLOYEE
and/or her spouse after the EMPLOYEE's retirement; provided
further, however, that the EMPLOYEE may only participate in such
program for as long as the EMPLOYERS elect in their sole
discretion to make available an employee group health insurance
program which permits the EMPLOYERS to make coverage available
for retirees.
(c) Vacation and Sick Leave. The EMPLOYEE shall be entitled,
without loss of pay, to be absent voluntarily from the performance of
her 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;
(ii) Vacation time shall be scheduled by the EMPLOYEE in
a reasonable manner. The EMPLOYEE shall not be entitled to
receive any additional compensation from the EMPLOYERS in the
event of her failure to take the full allotment of vacation time
during any one year. Vacation time accrued in any one year may
not be carried over into any succeeding 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
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during any year, such leave shall accrue to subsequent years;
provided, however, that the number of accrued days of sick leave
shall not exceed 35 days.
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 failure to comply with the Human
Resources Policies of the EMPLOYERS or 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 her beneficiaries, dependents or estate an
amount equal to the sum of (1) 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 total
compensation paid to the EMPLOYEE for the immediately
preceding calendar year as set forth on the Form W-2 of
the EMPLOYEE, less (xx) the amount paid to the EMPLOYEE
pursuant to clause (1) of this subparagraph (I);
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(II) The EMPLOYEE, her 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
(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 thereunder, 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, her designated beneficiaries or
her estate, her 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 her 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.
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(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
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. (SECTION)574.4(a), or
any person or entity obtains "rebuttable control" within the meaning
of 12 C.F.R. (SECTION)574.4(b) and has not rebutted control in
accordance with 12 C.F.R. (SECTION)574.4(c).
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)(1) 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
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unsound condition. No vested rights of the EMPLOYEE shall be affected
by any such action.
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.
7. Confidential Information. The EMPLOYEE acknowledges that during
her employment she 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 her 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.
8. Nonassignability. Neither this AGREEMENT nor any right or
interest hereunder shall be assignable by the EMPLOYEE, her 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 her death, or (b) the executors, administrators, or other
legal representatives of the EMPLOYEE or her estate from assigning any
rights hereunder to the person or persons entitled thereto.
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.
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.
11. Amendment of AGREEMENT. This AGREEMENT may not be modified or
amended, except by an instrument in writing signed by the parties hereto.
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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.
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.
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.
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.
16. Effect of Prior Agreements. This AGREEMENT contains the entire
understanding between the parties hereto and supersedes any prior employment
agreement between the EMPLOYERS or any predecessor of the EMPLOYERS and the
EMPLOYEE.
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 Bancorp and/or First Federal:
First Federal Savings Bank of Eastern Ohio
Xxxxx & Xxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000
With copies to:
Xxxx X. Xxxxx, Esq.
Vorys, Xxxxx, Xxxxxxx and Xxxxx
Atrium Two, Suite 2100
000 Xxxx Xxxxxx Xxxxxx
0
Xxxxxxxxxx, Xxxx 00000-0000
If to the EMPLOYEE:
Xxx. Xxxxxx Xxxxx XxXxxxxx
000 Xxxxxxx Xxx.
Xxxxxxxxxx, Xxxx 00000
IN WITNESS WHEREOF, each of the EMPLOYERS 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: FIRST FEDERAL BANCORP, INC.
/s/ Xxx X. XxXxxx By /s/ J. Xxxxxxx Xxxxxxx
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J. Xxxxxxx Xxxxxxx
its President/CEO
Attest: FIRST FEDERAL SAVINGS BANK
OF EASTERN OHIO
/s/ Xxx X. XxXxxx By /s/ J. Xxxxxxx Xxxxxxx
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J. Xxxxxxx Xxxxxxx
its President/CEO
Attest:
/s/ Xxx X. XxXxxx /s/ Xxxxxx Xxxxx XxXxxxxx
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Xxxxxx Xxxxx XxXxxxxx
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