Exhibit 10.3
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (hereinafter referred to as this "AGREEMENT"),
entered into this 22d day of May, 1998, by and between Xxxxxx Financial
Corporation, a savings and loan holding company incorporated under Ohio law
(hereinafter referred to as "WFC"); The Xxxxxx Savings and Loan Co., a savings
and loan association incorporated under Ohio law and a wholly-owned subsidiary
of WFC (hereinafter referred to as "XXXXXX"); and Xxxx X. Xxxxx, an individual
(hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of WFC and XXXXXX (hereinafter
collectively referred to as the "EMPLOYERS");
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Boards of Directors of the EMPLOYERS desire to retain the services
of the EMPLOYEE as Treasurer of the EMPLOYERS;
WHEREAS, the EMPLOYEE desires to continue to serve as Treasurer of the
EMPLOYERS; and
WHEREAS, the EMPLOYEE and the EMPLOYERS desire to enter into this
AGREEMENT to set forth their understanding as to their respective rights and
obligations in the event of the termination of EMPLOYEE'S employment under the
circumstances set forth in this AGREEMENT;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYERS and the EMPLOYEE hereby agree as follows:
Section l. Term. This AGREEMENT shall commence on the date hereof
and shall terminate on May 22, 2000 (hereinafter referred to as the "TERM").
Section 2. Termination of Employment.
(a) Termination for JUST CAUSE. In the event that the
EMPLOYERS terminate 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.
(b) Termination after CHANGE OF CONTROL. In the event that,
before the expiration of the TERM and in connection with or within one
year of a CHANGE OF CONTROL (as defined hereinafter) of either one of
the EMPLOYERS, (i) the employment of the EMPLOYEE is terminated for any
reason other than JUST CAUSE before the expiration of the TERM, (ii)
the present capacity or circumstances in which the EMPLOYEE is employed
is changed before the expiration of the TERM, or (iii) the EMPLOYEE'S
responsibilities, authority, compensation or other benefits provided
under this AGREEMENT are materially reduced, then the following shall
occur:
(A) The EMPLOYERS shall promptly pay to the EMPLOYEE
or to his beneficiaries, dependents or estate an amount equal
to the sum of (I) the amount of compensation to which the
EMPLOYEE would be entitled for the remainder of the TERM under
this AGREEMENT, plus (II) the difference between (x) the
product of two, multiplied by the annual base salary payable
to the EMPLOYEE at the time of such termination, less (xx) the
amount paid to the EMPLOYEE pursuant to clause (I) of this
subparagraph (A);
(B) The EMPLOYEE, her dependents, beneficiaries and
estate shall continue to be covered under all benefit plans of
the EMPLOYERS at the EMPLOYERS' expense as if the EMPLOYEE
were still employed under this AGREEMENT until the earliest of
the expiration of the TERM or the date on which the EMPLOYEE
is included in another employer's benefit plans as a full-time
employee; and
(C) The EMPLOYEE shall not be required to mitigate
the amount of any payment provided for in this AGREEMENT by
seeking other employment or otherwise, nor shall any amounts
received from other employment or otherwise by the EMPLOYEE
offset in any manner the obligations of the EMPLOYERS
hereunder, except as specifically stated in subparagraph (B).
In the event that payments pursuant to this subsection (b) 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.
(c) Termination Without CHANGE OF CONTROL. In the event that
the employment of the EMPLOYEE is terminated before the expiration of
the TERM by the EMPLOYERS or by the EMPLOYEE for any reason other than
JUST CAUSE or in connection with or within one year of a CHANGE OF
CONTROL, the EMPLOYERS shall pay to the EMPLOYEE the amount of
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compensation earned by the EMPLOYEE up to the date of such termination.
After the date of such termination, all benefits under any benefit
plans of the EMPLOYERS shall terminate and the EMPLOYEE shall have no
right to receive, and shall not receive, any benefit for any period
after the date of such termination.
(d) 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.
(e) "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. ss.1828(k) and any regulations promulgated
thereunder.
(f) Definition of "CHANGE OF CONTROL". A "CHANGE OF CONTROL" shall be
deemed to have occurred in the event that, at any time during the TERM, either
any person or entity obtains "conclusive control" of the EMPLOYERS within the
meaning of 12 C.F.R. ss.574.4(a), or any person or entity obtains "rebuttable
control" within the meaning of 12 C.F.R. ss.574.4(b) and has not rebutted
control in accordance with 12 C.F.R. ss.574.4(c).
Section 3. Special Regulatory Events. Notwithstanding Section 2
of this AGREEMENT, the obligations of the EMPLOYERS to the EMPLOYEE shall be as
follows in the event of the following circumstances:
(a) If the EMPLOYEE is suspended and/or temporarily prohibited from
participating in the conduct of the EMPLOYERS' affairs by a notice served under
section 8(e) (3) or (g) (1) of the Federal Deposit Insurance Act (hereinafter
referred to as the "FDIA"), the EMPLOYERS' obligations under this AGREEMENT
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
EMPLOYERS may, in 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 EMPLOYERS' affairs by an order issued under
Section 8(e) (4) or (g) (l) of the FDIA, all obligations of the EMPLOYERS under
this AGREEMENT shall terminate as of the effective date of such order; provided,
however, that vested rights of the EMPLOYEE shall not be affected by such
termination.
(c) If the EMPLOYERS are in default, as defined in section 3(x) (1) of
the FDIA, all obligations under this AGREEMENT shall terminate as of the date of
default; provided, however, that vested rights of the EMPLOYEE shall not be
affected.
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(d) All obligations under this AGREEMENT shall be terminated, except to
the extent of a determination that the continuation of this AGREEMENT is
necessary for the continued operation of the EMPLOYERS, (i) by the Director of
the Office of Thrift Supervision (hereinafter referred to as the "OTS"), or his
or her designee at the time that the Federal Deposit Insurance Corporation
enters into an agreement to provide assistance to or on behalf of the EMPLOYERS
under the authority contained in Section 13(c) of the FDIA or (ii) by the
Director of the OTS, or his or her designee, at any time the Director of the
OTS, or his or her designee, approves a supervisory merger to resolve problems
related to the operation of the EMPLOYERS or when the EMPLOYERS are determined
by the Director of the OTS to be in an unsafe or unsound condition. No vested
rights of the EMPLOYEE shall be affected by any such action.
Section 4. Consolidation, Merger or Sale of Assets. Nothing in this
AGREEMENT shall preclude the EMPLOYERS from consolidating with, merging into, or
transferring all, or substantially all, of their assets to another corporation
that assumes all of the EMPLOYERS' obligations and undertakings hereunder. Upon
such a consolidation, merger or transfer of assets, the term "EMPLOYERS" as used
herein, shall mean such other corporation or entity, and this AGREEMENT shall
continue in full force and effect.
Section 5. Confidential Information. The EMPLOYEE acknowledges that
during his employment she will learn and have access to confidential information
regarding the EMPLOYERS and her customers and businesses. The EMPLOYEE agrees
and covenants not to disclose or use for her own benefit, or the benefit of any
other person or entity, any confidential information, unless or until the
EMPLOYERS consent to such disclosure or use or such information becomes common
knowledge in the industry or is otherwise legally in the public domain. The
EMPLOYEE shall not knowingly disclose or reveal to any unauthorized person any
confidential information relating to the EMPLOYERS, their subsidiaries or
affiliates, or to any of the businesses operated by them, and the EMPLOYEE
confirms that such information constitutes the exclusive property of the
EMPLOYERS. The EMPLOYEE shall not otherwise knowingly act or conduct herself (a)
to the material detriment of the EMPLOYERS, their subsidiaries, or affiliates,
or (b) in a manner which is inimical or contrary to the interests of the
EMPLOYERS.
Section 6. Nonassignability. Neither this AGREEMENT nor any right or
interest hereunder shall be assignable by the EMPLOYEE, her beneficiaries, or
legal representatives without the EMPLOYERS' prior written consent; provided,
however, that nothing in this Section 6 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.
Section 7. 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.
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Section 8. Binding Agreement. This AGREEMENT shall be binding upon,
and inure to the benefit of, the EMPLOYEE and the EMPLOYERS and their respective
permitted successors and assigns.
Section 9. Amendment of AGREEMENT. This AGREEMENT may not be modified
or amended, except by an instrument in writing signed by the parties hereto.
Section 10. 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.
Section 11. Severability. If, for any reason, any provision of this
AGREEMENT is held invalid, such invalidity shall not affect the other provisions
of this AGREEMENT not held so invalid, and each such other provision shall, to
the full extent consistent with applicable law, continue in full force and
effect. If this AGREEMENT is held invalid or cannot be enforced, then any prior
AGREEMENT between the EMPLOYERS (or any predecessor thereof) and the EMPLOYEE
shall be deemed reinstated to the full extent permitted by law, as if this
AGREEMENT had not been executed.
Section 12. 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.
Section 13. Governing Law. This AGREEMENT has been executed and
delivered in the State of Ohio and its validity, interpretation, performance,
and enforcement shall be governed by the laws of this State of Ohio, except to
the extent that federal law is governing.
Section 14. Effect of Prior Agreements. This AGREEMENT contains the
entire understanding between the parties hereto and supersedes any prior
employment agreement between the EMPLOYERS and the EMPLOYEE, each of which is
hereby terminated and is of no further force or effect.
Section 15. 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:
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If to Xxxxxx Financial Corporation and/or The Xxxxxx Savings & Loan
Company:
Xxxxxx Financial Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000-0000
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:
Xxxx X. Xxxxx
IN WITNESS WHEREOF, the EMPLOYERS have 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: XXXXXX FINANCIAL CORPORATION
_____________________________ By ________________________________
________________________________
its ____________________________
Attest: THE XXXXXX SAVINGS AND LOAN CO.
_____________________________ By ________________________________
________________________________
its ____________________________
Attest:
_____________________________ ________________________________
Xxxx X. Xxxxx
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