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