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Exhibit 10.4
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), entered into this 15th day of November, 1996, by Peoples Federal
Savings and Loan Association of Massillon a savings and loan association
chartered under the laws of the United States (hereinafter referred to as the
"EMPLOYER"), and Xxxxx X. Xxxxxx, an individual (hereinafter referred to as the
"EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of the EMPLOYER;
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of the EMPLOYER desire to retain the services
of the EMPLOYEE as the Assistant Treasurer of the EMPLOYER;
WHEREAS, the EMPLOYEE desires to continue to serve as the Assistant
Treasurer of the EMPLOYER; and
WHEREAS, the EMPLOYEE and the EMPLOYER desire to enter into this
Agreement to set forth the terms and conditions of the employment relationship
between the EMPLOYER and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYER and the EMPLOYEE hereby agree as follows:
1. EMPLOYMENT AND TERM. Upon the terms and subject to the conditions of
this AGREEMENT, the EMPLOYER hereby employs the EMPLOYEE, and the EMPLOYEE
hereby accepts employment, as the Assistant Treasurer of the EMPLOYER. The term
of this AGREEMENT shall commence on the date hereof and shall end on November
14, 1999 (hereinafter referred to as the "TERM"). In January of each year, the
Board of Directors of the EMPLOYER shall review the EMPLOYEE's performance and
record the results of such review in the minutes of the Board of Directors. This
AGREEMENT shall not be renewed or extended without a taking of affirmative
action by the Board of Directors of the EMPLOYER to cause such renewal or
extension.
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2. DUTIES OF EMPLOYEE.
(a) General Duties and Responsibilities. As the Assistant Treasurer of
the EMPLOYER, the EMPLOYEE shall perform the duties and responsibilities
customary for such office to the best of her ability and in accordance with the
policies established by the Board of Directors of the EMPLOYER and all
applicable laws and regulations. The EMPLOYEE shall perform such other duties
not inconsistent with her position as may be assigned to her from time to time
by the Board of Directors of the EMPLOYER; provided, however, that the EMPLOYER
shall employ the EMPLOYEE during the TERM in a senior executive capacity without
material diminishment of the importance or prestige of her position.
(b) DEVOTION OF ENTIRE TIME TO THE BUSINESS OF THE EMPLOYER. 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 Board of
Directors of the EMPLOYER; provided, however, that the EMPLOYEE shall not be
precluded from (i) vacations and other leave time in accordance with Section
3(d) 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
EMPLOYER.
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 $35,640 until changed by the Board of Directors of
the EMPLOYER in accordance with Section 3(b) of this AGREEMENT.
(b) ANNUAL SALARY REVIEW. In January of each year throughout the TERM,
the annual salary of the EMPLOYEE shall be reviewed by the Board of Directors of
the EMPLOYER and shall be set, effective January 1, at an amount not less than
$35,640, based upon the EMPLOYEE's individual performance and the overall
profitability and financial condition of the EMPLOYER (hereinafter referred to
as the "ANNUAL REVIEW"). The results of the ANNUAL REVIEW shall be reflected in
the minutes of the Board of Directors of the EMPLOYER.
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(c) 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
EMPLOYER from time to time, including programs in respect of group health,
disability or life insurance, and all employee benefit plans or programs
hereafter adopted in writing by the Board of Directors of the EMPLOYER, 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 EMPLOYER 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 EMPLOYER 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 EMPLOYER 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 by 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 EMPLOYER make available an
employee group health insurance program which permits the EMPLOYER to make
coverage available for retirees.
(d) 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 Board of Directors
of the EMPLOYER for senior management officials of the EMPLOYER;
(ii) Vacation time shall be scheduled by the EMPLOYEE in a reasonable
manner subject to approval by the EMPLOYER.
(iii) The EMPLOYEE shall be entitled to annual sick leave as
established by the Board of Directors of the EMPLOYER for
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senior management officials of the EMPLOYER. Upon termination of
employment, the EMPLOYEE shall not be entitled to receive any
additional compensation from the EMPLOYER for unused sick leave.
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 EMPLOYER 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 EMPLOYER to the
EMPLOYEE upon the occurrence of the events described in such
subparagraphs:
(i) Termination for JUST CAUSE. In the event that the EMPLOYER
terminates 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 after a CHANGE OF CONTROL (as defined
hereinafter) of the EMPLOYER, (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 are materially
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:
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(I) The EMPLOYER 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 greater of the
annual salary set forth in Section 3(a) of this
AGREEMENT or the annual salary payable to the
EMPLOYEE as a result of any ANNUAL REVIEW, less (xx)
the amount paid to the EMPLOYEE pursuant to clause
(1) of this subparagraph (I);
(II) The EMPLOYEE, her dependents,
beneficiaries and estate shall continue to be covered
under all BENEFIT PLANS of the EMPLOYER at the
EMPLOYER'S 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 EMPLOYER hereunder,
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. Payments pursuant to this subsection also may not exceed the
limit set forth in Regulatory Bulletin 27a of the Office of Thrift
Supervision.
(iii) TERMINATION WITHOUT CHANGE OF CONTROL. In the event that the
employment of the EMPLOYEE is terminated before the expiration of the
TERM other than (A) for JUST CAUSE or (B) in connection with or within
one year after a CHANGE OF
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CONTROL, the EMPLOYER shall be obligated to continue (1) 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 (2) to provide to
the EMPLOYEE, at the EMPLOYER'S 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. Payments pursuant to this
subsection also may not exceed the limit set forth in Regulatory
Bulletin 27a of the Office of Thrift Supervision.
(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.
(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 EMPLOYMENT
TERM, either any person or entity obtains "conclusive control" of the EMPLOYER
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 rebuttable 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 EMPLOYER 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 EMPLOYER'S affairs by a notice served under
section 8(e)(3) or (g)(1) of the
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Federal Deposit Insurance Act (hereinafter referred to as the "FDIA"), the
EMPLOYER'S 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 EMPLOYER may, in its 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 EMPLOYER'S affairs by an order issued under
Section 8(e)(4) or (g)(1) of the FDIA, all obligations of the EMPLOYER 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 EMPLOYER 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 the EMPLOYER, (i) by the Director of
the Office of Thrift Supervision (hereinafter referred to as the "OTS"), or her
or her designee at the time that the Federal Deposit Insurance Corporation
enters into an agreement to provide assistance to or on behalf of Peoples
Federal under the authority contained in Section 13(c) of the FDIA or (ii) by
the Director of the OTS, or her or her designee, at any time the Director of the
OTS, or her or her designee, approves a supervisory merger to resolve problems
related to the operation of the EMPLOYER 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.
6. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this AGREEMENT
shall preclude the EMPLOYER from consolidating with, merging into, or
transferring all, or substantially all, of its assets to another corporation
that assumes all of the EMPLOYER'S obligations and undertakings hereunder. Upon
such a consolidation, merger or transfer of assets, the term "EMPLOYER," as used
herein, shall mean such other corporation or entity, and this AGREEMENT shall
continue in full force and effect.
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7. CONFIDENTIAL INFORMATION. The EMPLOYEE acknowledges that during her
employment she will learn and have access to confidential information regarding
the EMPLOYER and its 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 EMPLOYER consents
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 EMPLOYER, its subsidiaries or affiliates, or to any
of the businesses operated by it, and the EMPLOYEE confirms that such
information constitutes the exclusive property of the EMPLOYER. The EMPLOYEE
shall not otherwise knowingly act or conduct herself (a) to the material
detriment of the EMPLOYER, its subsidiaries, or affiliates, or (b) in a manner
which is inimical or contrary to the interests of the EMPLOYER.
8. NONASSIGNABILITY. Neither this AGREEMENT nor any right or interest
hereunder shall be assignable by the EMPLOYEE, her beneficiaries, or legal
representatives without the EMPLOYER'S 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 EMPLOYER and its 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.
12. WAIVER. No term or condition of this AGREEMENT shall be deemed to
have been waived, nor shall there be an estoppel
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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 EMPLOYER (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 three 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 supercedes any prior employment
agreement between the EMPLOYER or any predecessor of the EMPLOYER and the
EMPLOYEE.
17. NOTICES. Any notice or other communication required or permitted
pursuant to three 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:
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If to Peoples Federal Savings and Loan Association of Massillon:
Peoples Federal Savings and Loan Association of
Massillon
000 Xxxxxxx Xxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: President
With copies to:
Xxxx X. Xxxxx, Esq.
Vorys, Xxxxx, Xxxxxxx and Xxxxx
Atrium Two, Suite 2100
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
If to the EMPLOYEE to:
Xxxxx X. Xxxxxx
000 Xxxx Xxxxxx X.X.
Xxxxxxxxx, Xxxx 00000
IN WITNESS WHEREOF, the EMPLOYER 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: PEOPLES FEDERAL SAVINGS AND LOAN
ASSOCIATION OF MASSILLON
Xxxxx X. Xxxxxx By Xxxx xxx Xxxxxx
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Xxxx xxx Xxxxxx
its President
Attest:
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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