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Exhibit 10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), is entered into this 1st day of January, 1998, by and between The
Home Loan Savings Bank, a savings and loan association incorporated under Ohio
law (hereinafter referred to as the "BANK"), and Xxxxxx X. Xxxxxxxx, an
individual (hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is currently employed as the President of the
BANK;
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of the BANK desires to retain the services of
the EMPLOYEE as the President of the BANK;
WHEREAS, the EMPLOYEE desires to continue to serve as the President of
the BANK; and
WHEREAS, the EMPLOYEE and the BANK desire to enter into this AGREEMENT
to set forth the terms and conditions of the employment relationship between the
BANK and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the BANK and the EMPLOYEE hereby agree as follows:
1. EMPLOYMENT AND TERM.
(a) TERM. Upon the terms and subject to the conditions of this
AGREEMENT, the BANK hereby employs the EMPLOYEE, and the EMPLOYEE hereby accepts
employment, as the President of the BANK. The term of this AGREEMENT shall
commence on the date hereof and shall end on December 31, 2000, unless extended
by the BANK, with the consent of the EMPLOYEE, as provided in subsection (b) of
this Section 1 (hereinafter referred to, together with such extensions, as the
"TERM").
(b) EXTENSION. On or before each anniversary of the date of
this AGREEMENT, the Board of Directors of the BANK shall review this AGREEMENT,
document its justification and approval of this AGREEMENT in the board minutes,
and the TERM shall be extended for a one-year period beyond the then effective
expiration date, provided the Board of Directors determines that this AGREEMENT
should be extended. Any such extension shall be subject to the written consent
of the EMPLOYEE.
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2. DUTIES OF THE EMPLOYEE.
(a) GENERAL DUTIES AND RESPONSIBILITIES. The EMPLOYEE shall
serve as the President of the BANK. Subject to the direction of the Board of
Directors of the BANK, the EMPLOYEE shall have responsibility for the general
management of the business and affairs of the BANK and shall perform all duties
and shall have all powers which are commonly incident to the office of President
or which, consistent therewith, are delegated to him by the Board of Directors.
Such duties shall include, but not be limited to, (i) managing the day to day
operations of the BANK, (ii) managing the efforts of the BANK to comply with
applicable laws and regulations, (iii) marketing the BANK and its services, (iv)
supervising other employees of the BANK, (v) providing reports to the Board of
Directors of the BANK regarding the affairs and conditions of the BANK, and (vi)
making recommendations to the Board of Directors of the BANK concerning the
strategies, capital structure, tactics and general operations of the BANK.
(b) DEVOTION OF ENTIRE TIME TO THE BUSINESS OF THE BANK. The
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
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 other than the BANK, Home Loan Financial Corporation
(hereinafter referred to as the "HOLDING COMPANY"), the sole shareholder of the
BANK, or any subsidiary of the BANK or the HOLDING COMPANY without the prior
written consent of the Board of Directors of the BANK; provided, however, that
the EMPLOYEE shall not be precluded from (i) vacations and other leave time in
accordance with Section 3(d) below, (ii) reasonable participation in community,
civic, charitable or similar organizations, (iii) reasonable participation in
industry-related activities, including, but not limited to, attending state and
national trade association meetings and serving as an officer, director or
trustee of a state or national trade association or Federal Home Loan Bank, (iv)
serving as an officer or director of the HOLDING COMPANY or any subsidiary of
the BANK or the HOLDING COMPANY and receiving a salary, director's fees or other
compensation or benefits, as appropriate, or (v) pursuing personal investments
which do not interfere or conflict with the performance of the EMPLOYEE's duties
to the BANK.
3. COMPENSATION.
(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 $165,000 until changed by the Board of
Directors of the BANK in accordance with Section 3(b) below.
(b) ANNUAL SALARY REVIEW. On or before each anniversary of the
date of this AGREEMENT, the annual salary of the EMPLOYEE shall be reviewed by
the Board of Directors of the BANK and shall be set at an amount not less than
$165,000, based upon the EMPLOYEE's individual performance and the overall
profitability and financial condition of the BANK (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 BANK.
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(c) EMPLOYEE BENEFIT PROGRAMS. 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 BANK or the HOLDING COMPANY from time to time and all employee benefit
plans or programs hereafter adopted in writing by the Board of Directors of the
BANK or the HOLDING COMPANY for which senior management personnel of the BANK
are eligible, including any employee stock ownership plan, stock option plan or
other stock benefit plan (hereinafter collectively referred to as "BENEFIT
PLANS") in accordance with the terms and conditions of such BENEFIT PLANS,
including, but not limited to, satisfaction of any participation or vesting
requirements. Notwithstanding any statement to the contrary contained elsewhere
in this AGREEMENT, the BANK may at any time discontinue or terminate any BENEFIT
PLAN now existing or hereafter adopted, to the extent permitted by the terms of
such BENEFIT PLAN, and shall not be required to compensate the EMPLOYEE for such
discontinuance or termination.
(d) VACATION AND SICK LEAVE. The EMPLOYEE shall be entitled,
without loss of pay, to be absent voluntarily from the performance of his duties
under this AGREEMENT, in accordance with the policies periodically established
by the Board of Directors of the BANK for senior management officials of the
BANK. The EMPLOYEE shall be entitled to annual sick leave as established by the
Board of Directors of the BANK for senior management officials of the BANK.
(e) EXPENSES. In addition to any compensation received under
Section 3(d), the BANK shall pay or reimburse the EMPLOYEE for all reasonable
travel, entertainment and miscellaneous expenses incurred in connection with the
performance of his duties under this AGREEMENT, including participation in
industry-related activities.
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 (i) at the option of the BANK
upon the delivery by the BANK of written notice of termination to the EMPLOYEE,
or (ii) at the option of the EMPLOYEE upon delivery by the EMPLOYEE of written
notice of termination to the BANK if, in connection with a CHANGE IN CONTROL
(hereinafter defined), the present capacity or circumstances in which the
EMPLOYEE is employed are materially adversely changed (including, but not
limited to, a material reduction in responsibilities or authority or the
assignment of duties or responsibilities substantially inconsistent with those
normally associated with the EMPLOYEE's position described in Section 2(a) of
this AGREEMENT, change of title or removal as a director of the BANK or the
HOLDING COMPANY or the requirement that the EMPLOYEE regularly perform his
principal executive functions more than thirty-five (35) miles from his primary
office as of the date of the commencement of the TERM of this AGREEMENT) or the
EMPLOYEE's compensation or other benefits provided under this AGREEMENT are
reduced, unless the benefit reductions are part of a Company-wide reduction. For
purposes of this AGREEMENT, an event shall be deemed to have occurred "in
connection with a CHANGE
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OF CONTROL" if such event occurs within one year before or after a CHANGE OF
CONTROL. The following subsections (A), (B) and (C) of this Section 4(a) shall
govern the obligations of the BANK to the EMPLOYEE upon the occurrence of the
events described in such subparagraphs:
(A) TERMINATION FOR JUST CAUSE. In the event that the BANK
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 other minor 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.
(B) TERMINATION IN CONNECTION WITH CHANGE OF CONTROL. In the
event that the employment of the EMPLOYEE is terminated by the BANK in
connection with a CHANGE OF CONTROL for any reason other than JUST CAUSE or is
terminated by the EMPLOYEE as provided in Section 4(a)(ii) above, then the
following shall occur:
(I) The BANK shall promptly pay to the EMPLOYEE or to
his beneficiaries, dependents or estate an amount equal to the product of 2.99
multiplied by the EMPLOYEE's "base amount" as defined in 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");
(II) The EMPLOYEE, his dependents, beneficiaries and
estate shall continue to be covered at the BANK's expense under all health,
life, disability and other benefit plans of the BANK in which the EMPLOYEE was a
participant prior to the effective date of the termination of his employment as
if the EMPLOYEE were still employed under this AGREEMENT until the earlier 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 BANK
hereunder, except as specifically stated in subparagraph (II) above.
(C) TERMINATION NOT IN CONNECTION WITH CHANGE OF CONTROL. In
the event that the employment of the EMPLOYEE is terminated before the
expiration of the TERM not for JUST CAUSE and not in connection with a CHANGE OF
CONTROL, then the following shall occur:
(I) The BANK shall be obligated to continue to pay on
a monthly basis, until the expiration of the TERM, to the EMPLOYEE, his
designated beneficiaries or his
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estate, the annual salary in effect at the time of termination pursuant to
Section 3 above, plus a cash bonus equal to the cash bonus, if any, paid to the
EMPLOYEE in the twelve month period prior to the termination of employment;
(II) The BANK shall continue to provide to the
EMPLOYEE, at the BANK's expense, health, life, disability and other benefits
substantially equal to those being provided to the EMPLOYEE at the date of
termination of his employment until the earliest to occur 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 BANK
hereunder, except as specifically stated in subparagraph II above.
(b) DEATH OF THE EMPLOYEE. The TERM shall automatically expire
upon the death of the EMPLOYEE. In such event, 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. In the event that any
payments pursuant to this Section 4 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 such limits.
Payments pursuant to this Section 4. Any payments made to the EMPLOYEE pursuant
to this AGREEMENT 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 mean any one of the following events; (i) the acquisition of ownership or
power to vote more than 25% of the voting stock of the BANK or the HOLDING
COMPANY; (ii) the acquisition of the ability to control the election of a
majority of the directors of the BANK or the HOLDING COMPANY; (iii) during any
period of up to two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the BANK or the HOLDING COMPANY
cease for any reason to constitute at least a majority thereof; provided,
however, that any individual whose election or nomination for election as a
member of the Board of Directors of the BANK or the HOLDING COMPANY was approved
by a vote of at least two-thirds of the directors then in office shall be
considered to have continued to be a member of the Board of Directors of the
BANK or the HOLDING COMPANY; or (iv) the acquisition by any person or entity of
"conclusive control" of the BANK within the meaning of 12 C.F.R. Section
574.4(a), or the acquisition by any person or entity of "rebuttable control"
within the meaning of 12 C.F.R. Section 574.4(b) that has not been rebutted in
accordance with 12 C.F.R. Section 574.4(c). For purposes of this paragraph, the
term "person" refers to an individual or corporation, partnership, trust,
association or other organization, but does not include the EMPLOYEE and any
person or
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persons with whom the EMPLOYEE is "acting in concert" within the meaning of 12
C.F.R. Part 574.
5. SPECIAL REGULATORY EVENTS. Notwithstanding the provisions of Section 4 of
this AGREEMENT, the obligations of the BANK 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 BANK's affairs by a notice served under
section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (hereinafter
referred to as the "FDIA"), the BANK'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 BANK shall 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 BANK's affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the FDIA, all obligations of the BANK 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 BANK 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 BANK, (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 enters
into an agreement to provide assistance to or on behalf of the BANK 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 approves a
supervisory merger to resolve problems related to the operation of the BANK or
when the BANK is determined by the Director of the OTS to be in an unsafe or
unsound condition; provided, however that no vested rights of the EMPLOYEE shall
not be affected by any such termination; and
(e) The provisions of this Section 5 are governed by the
requirements of 12 C.F.R. Section 563.39(b) and in the event that any statements
in this Section 5 are inconsistent with 12 C.F.R. Section 563.39(b), the
provisions of 12 C.F.R. Section 563.39(b) shall be controlling.
6. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this AGREEMENT shall
preclude the BANK or the HOLDING COMPANY from consolidating with, merging into,
or transferring all, or substantially all, of their assets to another
corporation that assumes all of their obligations and undertakings hereunder.
Upon such a consolidation, merger or transfer of assets, the term
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"BANK" 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 his
employment he will learn and have access to confidential information regarding
the BANK and its customers and businesses. The EMPLOYEE agrees and covenants not
to disclose or use for his own benefit, or the benefit of any other person or
entity, any confidential information, unless or until the BANK consents to such
disclosure or use or such information 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 BANK, its 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 BANK.
The EMPLOYEE shall not otherwise knowingly act or conduct himself to the
material detriment of the BANK, its subsidiaries, or affiliates or in a manner
which is inimical or contrary to the interests of the BANK.
8. NON-ASSIGNABILITY. Neither this AGREEMENT nor any right or interest hereunder
shall be assignable by the EMPLOYEE, his beneficiaries or legal representatives
without the BANK's prior written consent; provided, however, that nothing in
this Section VIII shall preclude the EMPLOYEE from designating a beneficiary to
receive any benefits payable hereunder upon his death or the executors,
administrators or other legal representatives of the EMPLOYEE or his 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 BANK 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.
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
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and effect. If this AGREEMENT is held invalid or cannot be enforced, then any
prior AGREEMENT between the BANK (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 the 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 BANK or any predecessor of the BANK 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 the BANK:
The Home Loan Savings Bank
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
If to the EMPLOYEE:
Xx. Xxxxxx X. Xxxxxxxx
000 X. Xxxx Xxxxxx
Xxxx Xxxxxxxxx, Xxxx 00000
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IN WITNESS WHEREOF, the BANK 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: The Home Loan Savings Bank
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
its Chairman of the Board
Attest:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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