WAYNE SAVINGS COMMUNITY BANK AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.1
XXXXX
SAVINGS COMMUNITY BANK
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered
into as of November 30, 2006 by and between Xxxxx Savings Community Bank (the
“Bank”), an Ohio savings and loan association, with its principal administrative
office at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxx and Xxxxxxx X. Xxxxxx (the
“Executive”). Any reference to “Company” herein shall mean Xxxxx Savings
Bancshares, Inc. the stock holding company parent of the Bank or any successor
thereto.
WHEREAS,
the
Executive is currently employed as President and Chief Executive Officer of
the
Bank pursuant to an employment agreement between the Bank and the Executive
entered into effective as of February 15, 2005 (the “Prior Employment
Agreement”);
WHEREAS,
the
Bank desires to amend and restate the Prior Employment Agreement in order to
make changes to comply with Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), as well as certain other changes;
WHEREAS,
the
Bank desires to be ensured of the continued services of the Executive for the
period provided in this Agreement; and
WHEREAS,
Executive is willing to continue to serve in the employ of the Bank on a
full-time basis for said period.
NOW,
THEREFORE,
in
consideration of the mutual covenants herein contained, and upon the other
terms
and conditions hereinafter provided, the parties hereby agree as
follows:
1. POSITION
AND
RESPONSIBILITIES
During
the period of his employment hereunder, Executive agrees to serve as President
and Chief Executive Officer for the Bank (the “Executive Position”), having such
power, authority and responsibility and performing such duties as are prescribed
by or under the Bylaws of the Bank and as are customarily associated with such
positions. The Executive shall devote his full business time, attention, skills
and efforts (other than during weekends, holidays, vacation periods, and periods
of illness or leaves of absence) to the business and affairs of the Bank and
the
Company as he has customarily done as an officer and employee of the Bank and
shall use his best efforts to advance the interests of the Bank and Company.
During said period, Executive also agrees to serve, if elected, as an officer
of
any subsidiary or affiliate of the Bank. Failure to reelect Executive to the
Executive Position without the consent of the Executive during the term of
this
Agreement (except for any termination for Cause, as defined herein) shall
constitute a breach of this Agreement.
2. TERMS
AND DUTIES
(a) The
period of Executive's employment under this Agreement shall begin as of the
date
first above written and shall continue for a period of thirty-six full calendar
months
thereafter.
Within thirty days prior to the first anniversary date of this Agreement, and
within thirty days prior to each anniversary date thereafter, the Board of
Directors of the Bank (“Board”) will conduct a performance evaluation and review
of the Executive for purposes of determining whether to extend the Agreement,
and the results thereof shall be included in the minutes of the Board's meeting
and communicated to Executive. Upon a favorable performance evaluation, the
Board shall renew the term of the Agreement for an additional year from the
anniversary date such that the remaining term shall be three years; provided,
however, if written notice of nonrenewal is provided to Executive at least
ten
days and not more than thirty days prior to any anniversary date, the Agreement
shall expire at the end of thirty-six months following such anniversary
date.
(b) During
the period of his employment hereunder, except for periods of absence occasioned
by illness, reasonable vacation periods, and reasonable leaves of absence,
Executive shall devote substantially all his business time, attention, skill,
and efforts to the faithful performance of his duties hereunder including
activities and services related to the organization, operation and management
of
the Bank; provided, however, that, with the approval of the Board, as evidenced
by a resolution of such Board, from time to time, Executive may serve, or
continue to serve, on the boards of directors of, and hold any other offices
or
positions in, business companies or business organizations, which, in such
Board's judgment, will not present any conflict of interest with the Bank,
or
materially affect the performance of Executive's duties pursuant to this
Agreement (for purposes of this Section 2(b), Board approval shall be deemed
provided as to service with any such business companies or organizations that
Executive was serving as provided on the attached exhibit to the Prior
Employment Agreement).
3. COMPENSATION
AND REIMBURSEMENT.
(a) The
compensation specified under this Agreement shall constitute the salary and
benefits paid for the duties described in Section 2(b). The Bank shall pay
Executive as compensation a salary of not less than $160,000 per year (“Base
Salary”). Such Base Salary shall be payable biweekly. During the period of
this Agreement, Executive's Base Salary shall be reviewed at least annually.
Such review shall be conducted by a Committee designated by the Board, and
the
Board may increase, but not decrease (except a decrease that is generally
applicable to all employees), Executive's Base Salary (any increase in Base
Salary shall become the “Base Salary” for purposes of this Agreement). In
addition to the Base Salary provided in this Section 3(a), the Bank shall
provide Executive at no cost to Executive with all such other benefits as are
provided uniformly to permanent full-time employees of the Bank. Base Salary
shall include any amounts of compensation deferred by Executive under qualified
and nonqualified plans maintained by the Bank.
(b) The
Bank
will provide Executive with employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or
otherwise deriving benefit from immediately prior to the beginning of the term
of this Agreement, and the Bank will not, without Executive's prior written
consent, make any changes in such plans, arrangements or perquisites which
would
adversely affect Executive's rights or benefits thereunder, except as to any
changes that are applicable to all employees or as reasonably or customarily
available. Without limiting the generality of the foregoing provisions of
this
2
Subsection
(b), Executive will be entitled to participate in or receive benefits under
any
employee benefit plans including but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident plans, medical coverage or any other employee benefit plan
or arrangement made available by the Bank in the future to its senior executives
and key management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and arrangements.
Executive will be entitled to incentive compensation and bonuses as provided
in
any plan of the Bank in which Executive is eligible to participate (and he
shall
be entitled to a pro rata distribution under any incentive compensation or
bonus
plan as to any year in which a termination of employment occurs, other than
termination for Cause). Nothing paid to the Executive under any such plan or
arrangement will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.
(c) In
addition to the Base Salary provided for by paragraph (a) of this Section 3,
the
Bank shall pay or reimburse Executive for all reasonable travel and other
reasonable expenses incurred by Executive performing his obligations under
this
Agreement and may provide such additional compensation in such form and such
amounts as the Board may from time to time determine.
4. PAYMENTS
TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon
the
occurrence of an Event of Termination (as herein defined) during the Executive's
term of employment under this Agreement, the provisions of this Section shall
apply. As used in this Agreement, an “Event of Termination” shall mean and
include any one or more of the following: (i) the termination by the Bank or
the
Company of Executive's full-time employment hereunder for any reason other
than
(A) termination for Cause (as defined in Section 8 hereof), (B) upon Retirement
(as defined in Section 7 hereof), or (C) for Disability (as set forth in Section
6 hereof); (ii) Executive's resignation from the Bank's employ following (A)
any
failure to elect or reelect or to appoint or reappoint Executive to the
Executive Position, (B) a material change in Executive's function, duties,
or
responsibilities, which change would cause Executive's position to become one
of
lesser responsibility, importance, or scope from the position and attributes
thereof described in Section 1 above, to which Executive has not agreed in
writing (and any such material change shall be deemed a continuing breach of
this Agreement), (C) a relocation of Executive's principal place of employment
to a location more than 30 miles outside the City of Wooster, or a material
reduction in the benefits and perquisites, including Base Salary, to the
Executive from those being provided as of the effective date of this Agreement
(except for any reduction that is part of an employee-wide reduction in pay
or
benefits), (D) a liquidation or dissolution of the Bank or the Company, or
(E)
material breach of this Agreement by the Bank; and (iii) the event specified
in
Section 4(b) hereof. Upon the occurrence of any event described in clauses
(ii)
(A), (B), (C), (D) or (E) above, Executive shall have the right to elect to
terminate his employment under this Agreement by resignation upon not less
than
thirty (30) days prior written notice given within a reasonable period of time
(not to exceed, except in case of a continuing breach, four calendar months)
after the event giving rise to said right to elect, which termination by
Executive shall be an Event of Termination. No payments or benefits shall be
due
to Executive under this Agreement upon the termination of Executive's employment
except as provided in Sections 3, 4, 5 or 6 hereof.
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(b) As
used
in this Agreement, an Event of Termination shall also mean and include
Executive's involuntary termination or voluntary resignation from the Bank's
employ on the effective date of, or at any time following, a Change in Control
during the term of this Agreement. For these purposes, a Change in Control
shall
mean a
change
in the ownership of the Bank or the Company, a change in the effective control
of the Bank or the Company or a change in the ownership of a substantial portion
of the assets of the Bank or the Company, in each case as provided under Section
409A of the Code and the regulations thereunder.
(c) Within
30
days upon the occurrence of an Event of Termination, as defined in Section
4(a)
or 4(b), the Bank shall pay Executive, or, in the event of his subsequent death,
his beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages (but not both), a lump sum cash amount
equal
to three (3) times the sum of: (i) the highest annual rate of Base Salary paid
to Executive at any time under this Agreement, and (ii) the greater of (x)
the
average annual cash bonus paid to Executive with respect to the two completed
fiscal years prior to the Event of Termination, or (y) the cash bonus paid
to
Executive with respect to the fiscal year ended prior to the Event of
Termination, and (iii) the value of the employer matching contributions made
on
the Executive’s behalf in the Xxxxx Savings 401(k) Retirement Plan, or any
successor thereto, and the value of the employer contribution or allocation
made
on the Executive’s behalf in the Xxxxx Savings Community Bank Restated Employee
Stock Ownership Plan, or any successor thereto, in the calendar year preceding
the year in which the Event of Termination occurs; provided
however,
that if
the Bank is not in compliance with its minimum capital requirements or if such
payments would cause the Bank's capital to be reduced below its minimum capital
requirements, such payments shall be deferred until such time as the Bank is
in
capital compliance. Such payments shall not be reduced in the event the
Executive obtains other employment following termination of employment.
(d) Upon
the
occurrence of an Event of Termination, the Bank will cause to be continued
life,
medical and dental coverage substantially comparable, as reasonably or
customarily available, to the coverage maintained by the Bank for Executive,
at
no cost to the Executive, prior to his termination, except to the extent such
coverage may be changed in its application to all Bank employees or is not
available on an individual basis to a terminated employee. Such coverage shall
cease thirty-six (36) months following the Event of Termination. If
the
provision of any of the benefits covered by this Section 4(d) would trigger
the
20% tax and interest penalties under Section 409A of the Code, then the
benefit(s) that would trigger such tax and interest penalties shall not be
provided (collectively, the “Excluded Benefits”), and in lieu of the Excluded
Benefits the Bank shall pay to the Executive, in a lump sum within 30 days
following termination of employment or within 30 days after such determination
should it occur after termination of employment, a cash amount equal to the
cost
to the Bank of providing the Excluded Benefits.
5. TAX
INDEMNIFICATION.
(a) If
the
payments and benefits pursuant to this Agreement, either alone or together
with
other payments and benefits which the Executive has the right to receive from
the Company and the Bank would constitute a “parachute payment” as defined in
Section 280G(b)(2) of the
4
Code
(the
“Initial Parachute Payment”), then the Bank shall pay to the Executive, at the
time such payments or benefits are paid and subject to applicable withholding
requirements, a cash amount equal to the sum of the following:
(i) twenty
(20) percent (or such other percentage equal to the tax rate imposed by Section
4999 of the Code) of the amount by which the Initial Parachute Payment exceeds
the Executive’s “base amount” from the Company and its subsidiaries, as defined
in Section 280G(b)(3) of the Code, with the difference between the Initial
Parachute Payment and the Executive’s base amount being hereinafter referred to
as the “Initial Excess Parachute Payment”;
(ii) such
additional amount (tax allowance) as may be necessary to compensate the
Executive for the payment by the Executive of state and federal income and
excise taxes on the payment provided under clause (i) above and on any payments
under this clause (ii). In computing such tax allowance, the payment to be
made
under clause (i) above shall be multiplied by the “gross up percentage” (“GUP”).
The GUP shall be determined as follows:
|
|
Tax
Rate
|
|
|
GUP
=
|
1-
Tax Rate
|
The
Tax
Rate for purposes of computing the GUP shall be the highest marginal federal
and
state income and employment-related tax rate (including Social Security and
Medicare taxes), including any applicable excise tax rate, applicable to the
Executive in the year in which the payment under clause (i) above is made,
and
shall also reflect the phase-out of deductions and the ability to deduct certain
of such taxes.
(b) Notwithstanding
the foregoing, if it shall subsequently be determined in a final judicial
determination or a final administrative settlement to which the Executive is
a
party that the actual excess parachute payment as defined in Section 280G(b)(1)
of the Code is different from the Initial Excess Parachute Payment (such
different amount being hereafter referred to as the “Determinative Excess
Parachute Payment”), then the Bank’s independent tax counsel or accountants
shall determine the amount (the “Adjustment Amount”) which either the Executive
must pay to the Bank or the Bank must pay to the Executive in order to put
the
Executive (or the Bank, as the case may be) in the same position the Executive
(or the Bank, as the case may be) would have been if the Initial Excess
Parachute Payment had been equal to the Determinative Excess Parachute Payment.
In determining the Adjustment Amount, the independent tax counsel or accountants
shall take into account any and all taxes (including any penalties and interest)
paid by or for the Executive or refunded to the Executive or for the Executive’s
benefit. As soon as practicable after the Adjustment Amount has been so
determined, the Bank shall pay the Adjustment Amount to the Executive or the
Executive shall repay the Adjustment Amount to the Bank, as the case may
be.
(c) In
each
calendar year that the Executive receives payments of benefits that constitute
a
parachute payment, the Executive shall report on his state and federal income
tax returns such information as is consistent with the determination made by
the
independent tax
5
counsel
or accountants of the Bank as described above. The Bank shall indemnify and
hold
the Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys’ fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information. The
Executive shall promptly notify the Bank in writing whenever the Executive
receives notice of the institution of a judicial or administrative proceeding,
formal or informal, in which the federal tax treatment under Section 4999 of
the
Code of any amount paid or payable under this Section 5 is being reviewed or
is
in dispute. The Bank shall assume control at its expense over all legal and
accounting matters pertaining to such federal tax treatment (except to the
extent necessary or appropriate for the Executive to resolve any such proceeding
with respect to any matter unrelated to amounts paid or payable pursuant to
this
Section 5) and the Executive shall cooperate fully with the Bank in any such
proceeding. The Executive shall not enter into any compromise or settlement
or
otherwise prejudice any rights the Bank may have in connection therewith without
the prior consent of the Bank.
6. TERMINATION
FOR DISABILITY.
(a) If
the
Executive (i) is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three months under
an
accident and health plan covering employees of the Bank,
the
Bank may terminate Executive’s employment for “Disability.”
(b) The
Bank
will pay Executive, as disability pay, a bi-weekly payment equal to 75% of
the
Executive's bi-weekly rate of Base Salary on the effective date of such
termination. These disability payments shall commence on the effective date
of
Executive's termination and will end on the earlier of (i) the date Executive
returns to the full-time employment of the Bank in the same capacity as he
was
employed prior to his termination for Disability and pursuant to an employment
agreement between Executive and the Bank; (ii) Executive's full-time employment
by another employer; (iii) Executive attaining a Retirement age of age 65 as
identified in Section 7; or (iv) Executive's death. The disability pay shall
be
reduced by the amount, if any, paid to the Executive under any plan of the
Bank
or the Company providing disability benefits to the Executive.
(c) The
Bank
will cause to be continued life, medical, and dental coverage substantially
comparable, as reasonable or customarily available, to the coverage maintained
by the Bank for Executive prior to his termination for Disability, except to
the
extent such coverage may be changed in its application to all Bank employees.
This coverage shall cease upon the earlier of (i) the date Executive returns
to
the full-time employment of the Bank in the same capacity as he was employed
prior to his termination for Disability and pursuant to an employment agreement
between Executive and the Bank; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the Retirement age as identified in Section
7; or (iv) Executive's death.
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(d) Notwithstanding
the foregoing, there will be no reduction in the compensation otherwise payable
to Executive during any period during which Executive is incapable of performing
his duties hereunder by reason of temporary disability.
7. TERMINATION
UPON RETIREMENT.
Termination
by the Bank of the Executive based on “Retirement” shall mean termination of
executive in accordance with any retirement policy established with Executive's
consent with respect to him. Upon termination of Executive upon Retirement,
no
amounts or benefits shall be due Executive under this Agreement and the
Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.
8. TERMINATION
FOR CAUSE.
The
term
“Termination for Cause” shall mean termination because of the Executive's
personal dishonesty, incompetence, willful misconduct, any 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 this Agreement. Notwithstanding the foregoing, Executive shall
not
be deemed to have been Terminated for Cause unless and until there shall have
been delivered to him a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the members of the Board at a meeting of
the
Board called and held for that purpose (after reasonable notice to Executive
and
an opportunity for him, together with counsel, to be heard before the Board),
finding that in the good faith opinion of the Board, Executive was guilty of
conduct justifying Termination for Cause and specifying the particulars thereof
in detail. The Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause (other than any vested
stock options, vested restricted stock or vested benefits under any tax
qualified or non-qualified employee benefit plan). Any non-vested stock
options or restricted stock granted to Executive under any stock option plan
or
restricted stock plan of the Bank, the Company or any subsidiary or affiliate
thereof, shall become null and void effective upon Executive's receipt of Notice
of Termination for Cause pursuant to Section 9 hereof, and any non-vested stock
options shall not be exercisable by Executive at any time subsequent to such
Termination for Cause, (unless it is determined in arbitration that grounds
for
termination of Executive for Cause did not exist, in which event all terms
of
the options or restricted stock as of the date of termination shall apply,
and
any time periods for exercising such options shall commence from the date of
resolution in arbitration).
9. NOTICE.
(a) Any
purported termination by the Bank for Cause shall be communicated by Notice
of
Termination to the Executive. For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated. If,
within thirty (30) days after any Notice of Termination for Cause is given,
the
Executive notifies the Bank or the Company that a dispute exists concerning
the
termination, the
7
parties
shall promptly proceed to arbitration. Notwithstanding the pendency of any
such
dispute, the Bank and the Company may discontinue to pay Executive compensation
until the dispute is finally resolved in accordance with this Agreement. If
it
is determined that Executive is entitled to compensation and benefits under
Section 4 of this Agreement, the payment of such compensation and benefits
by
the Bank and Company shall commence immediately following the date of resolution
by arbitration, with interest due Executive on the cash amount that would have
been paid pending arbitration (at the prime rate as published in the
Wall
Street Journal
from
time to time).
(b) Any
other
purported termination by the Bank or by Executive shall be communicated by
a
Notice of Termination to the other party. For purposes of this Agreement, a
“Notice of Termination” shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth
in detail the facts and circumstances claimed to provide a basis for termination
of employment under the provision so indicated. “Date of Termination” shall mean
the date of the Notice of Termination. If, within thirty (30) days after any
Notice of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination,
the
parties shall promptly proceed to arbitration as provided in Section 19 of
this
Agreement. Notwithstanding the pendency of any such dispute, the Bank shall
continue to pay the Executive his Base Salary, and other compensation and
benefits in effect when the notice giving rise to the dispute was given (except
as to termination of Executive for Cause). In the event of the voluntary
termination by the Executive of his employment, which is disputed by the Bank,
and if it is determined in arbitration that Executive is not entitled to
termination benefits pursuant to this Agreement, he shall return all cash
payments made to him pending resolution by arbitration, with interest thereon
at
the prime rate as published in the Wall
Street Journal
from
time to time if it is determined in arbitration that Executive's voluntary
termination of employment was not taken in good faith and not in the reasonable
belief that grounds existed for his voluntary termination.
10. POST-TERMINATION
OBLIGATIONS.
(a) All
payments and benefits to Executive under this Agreement shall be subject to
Executive's compliance with paragraph (b) of this Section 10 during the term
of
this Agreement and for one (1) full year after the expiration or termination
hereof.
(b) Executive
shall, upon reasonable notice, furnish such information and assistance to the
Bank as may reasonably be required by the Bank in connection with any litigation
in which it or any of its subsidiaries or affiliates is, or may become, a
party.
(c) Executive
recognizes and acknowledges that the knowledge of the business activities and
plans for business activities of the Bank and affiliates thereof, as it may
exist from time to time, is a valuable, special and unique asset of the business
of the Bank. Executive will not, during or after the term of his employment,
disclose any knowledge of the past, present, planned or considered business
activities of the Bank or affiliates thereof to any person, firm, corporation,
or other entity for any reason or purpose whatsoever (except for such disclosure
as may be required to be provided to the Office of Thrift Supervision (“OTS”),
the Federal Deposit Insurance Corporation (the “FDIC”), or other federal banking
agency with jurisdiction over the
8
Bank
or
Executive). Notwithstanding the foregoing, Executive may disclose any knowledge
of banking, financial and/or economic principles, concepts or ideas which are
not solely and exclusively derived from the business plans and activities of
the
Bank, and Executive may disclose any information regarding the Bank or the
Company which is otherwise publicly available. In the event of a breach or
threatened breach by the Executive of the provisions of this Section 9, the
Bank
will be entitled to an injunction restraining Executive from disclosing, in
whole or in part, the knowledge of the past, present, planned or considered
business activities of the Bank or affiliates thereof, or from rendering any
services to any person, firm, corporation, other entity to whom such knowledge,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein will be construed as prohibiting the Bank from pursuing any
other
remedies available to the Bank for such breach or threatened breach, including
the recovery of damages from Executive.
11. SOURCE
OF PAYMENTS.
All
payments provided in this Agreement shall be timely paid in cash or check from
the general funds of the Bank. The Company, however, guarantees payment and
provision of all amounts and benefits due hereunder to Executive and, if such
amounts and benefits due from the Bank are not timely paid or provided by the
Bank, such amounts and benefits shall be paid or provided by the
Company.
12. EFFECT
ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This
Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Bank or any predecessor
of
the Bank and Executive, except that this Agreement shall not affect or operate
to reduce any benefit or compensation inuring to the Executive of a kind
elsewhere provided. No provision of this Agreement shall be interpreted to
mean
that Executive is subject to receiving fewer benefits than those available
to
him without reference to this Agreement.
13. NO
ATTACHMENT.
(a) Except
as
required by law, no right to receive payments 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 or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void, and of no
effect.
(b) This
Agreement shall be binding upon, and inure to the benefit of, Executive and
the
Bank and their respective successors and assigns.
14. MODIFICATION
AND WAIVER.
(a) This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto. In
addition, notwithstanding anything in this Agreement to
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the
contrary, the Bank may amend in good faith any terms of this Agreement,
including retroactively, in order to comply with Section 409A of the
Code.
(b) No
term
or condition of this Agreement shall be deemed to have been waived, nor shall
there be any 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 such 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 as to any act other than that specifically
waived.
15. REQUIRED
REGULATORY PROVISIONS.
(a) The
Bank's Board of Directors may terminate the Executive's employment at any time,
but any termination by the Bank's Board of Directors, other than Termination
for
Cause, shall not prejudice Executive's right to compensation or other benefits
under this Agreement. Executive shall not have the right to receive compensation
or other benefits for any period after Termination for Cause as defined in
Section 9 hereinabove.
(b) If
the
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 U.S.C. §§ 1818(e)(3)) or 8(g) (12 U.S.C.
§ 1818(g)) of the Federal Deposit Insurance Act (the “FDI Act”), the Bank's
obligations under this contract shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Executive all or part
of
the compensation withheld while their contract obligations were suspended and
(ii) reinstate (in whole or in part) any of the obligations which were
suspended.
(c) If
the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank's affairs by an order issued under Section 8(e) (12 U.S.C.
§§ 1818(e)) or 8(g) (12 U.S.C. § 1818(g)) of the FDI Act, all
obligations of the Bank under this contract shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.
(d) If
the
Bank is in default as defined in Section 3(x) (12 U.S.C. § 1813(x)(1)) of
the FDI Act, all obligations of the Bank under this contract shall terminate
as
of the date of default, but this paragraph shall not affect any vested rights
of
the contracting parties.
(e) All
obligations of the Bank under this contract shall be terminated, except to
the
extent determined that continuation of the contract is necessary for the
continued operation of the Bank, (i) by the Director, at the time the FDIC
or
the Resolution Trust Corporation enters into an agreement to provide assistance
to or on behalf of the Bank; or (ii) by the OTS at the time the OTS or its
District Director approves a supervisory merger to resolve problems related
to
the operations of the Bank or when the Bank is determined by the OTS or FDIC
to
be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
10
(f) Any
payments made to Executive pursuant to this Agreement, or otherwise, are subject
to and conditioned upon their compliance with 12 USC Section 1828(k) and any
regulations promulgated thereunder.
16. SEVERABILITY.
If,
for
any reason, any provision of this Agreement, or any part of any provision,
is
held invalid, such invalidity shall not affect any other provision of this
Agreement or any part of such provision not held so invalid, and each such
other
provision and part thereof shall to the full extent consistent with law continue
in full force and effect.
17. HEADINGS
FOR REFERENCE ONLY.
The
headings of sections and 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.
18. GOVERNING
LAW.
This
Agreement shall be governed by the laws of the State of Ohio but only to the
extent not superseded by federal law.
19. ARBITRATION.
Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in a location selected by the employee within the Cleveland
metropolitan area, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award
in
any court having jurisdiction; provided, however, that Executive shall be
entitled to seek specific performance of his right to be paid until the Date
of
Termination during the pendency of any dispute or controversy arising under
or
in connection with this Agreement.
20. PAYMENT
OF LEGAL FEES.
All
reasonable legal fees paid or incurred by Executive pursuant to any dispute
or
question of interpretation relating to this Agreement shall be paid or
reimbursed by the Bank, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in the Executive's
favor.
21. INDEMNIFICATION.
The
Bank
and the Company shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) to the fullest extent permitted under
federal law against all expenses and liabilities reasonably incurred by him
in
connection with or arising out of any action, suit or proceeding in which he
may
be
11
involved
by reason of his having been a director or officer of the Bank or the Company
(whether or not he continues to be a director or officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees
and
the cost of reasonable settlements (such settlements must be approved by the
Board of Directors of the Bank or the Company, as appropriate), provided,
however, neither the Bank nor Company shall be required to indemnify or
reimburse the Executive for legal expenses or liabilities incurred in connection
with an action, suit or proceeding arising from any illegal or fraudulent act
committed by the Executive.
22. SUCCESSOR
TO THE BANK.
The
Bank
shall require any successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Bank or the Company, expressly and unconditionally
to
assume and agree to perform the Bank's obligations under this Agreement, in
the
same manner and to the same extent that the Bank would be required to perform
if
no such succession or assignment had taken place.
[Signature
page follows]
12
SIGNATURES
IN
WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be
executed and their seals to be affixed hereunto by their duly authorized
officers, and Executive has signed this Agreement, on the day and date first
above written.
|
ATTEST:
|
XXXXX
SAVINGS COMMUNITY BANK
|
|||
| /s/ Xxxxx X. Xxxxxxx |
By:
|
/s/ X. Xxxxxxx Xxxx Xxxxxx, III | ||
|
|
Executive
Vice President and Chief Financial Officer
|
|||
|
|
||||
|
WITNESS:
|
EXECUTIVE:
|
|||
| /s/ Xxxxx X. Xxxxxxx |
/s/
Xxxxxxx X. Xxxxxx
|
|||
|
Xxxxxxx
X. Xxxxxx
|
||||
|
CONSENT
OF GUARANTOR (PURSUANT
|
||||
|
TO
SECTION TEN HEREOF)
|
||||
|
XXXXX
SAVINGS BANCSHARES, INC.
|
||||
|
By:
|
/s/ X. Xxxxxxx Xxxx Xxxxxx, III | |||
|
Executive
Vice President and Chief Financial Officer
|
||||
13
