EXHIBIT 10.2 AMENDMENT TO EMPLOYMENT AGREEMENT BETWEEN DELPHOS CITIZENS
BANCORP, INC. AND PRESIDENT AND CHIEF EXECUTIVE OFFICER
FIRST AMENDMENT
DELPHOS CITIZENS BANCORP, INC.
EMPLOYMENT AGREEMENT
WHEREAS, the Delphos Citizens Bancorp, Inc. (the "Company") and Xxxxxx
X. Xxxxxxxxxx ("Executive") entered into an employment agreement effective April
21, 1997 (the "Agreement");
WHEREAS, the Company and Executive desire to amend the Agreement to
clarify the definition of "average annual compensation" and to provide for tax
indemnification to Executive in the event necessary as a result of a change in
control; and
WHEREAS, Section 14 of the Agreement provides that the Agreement may be
modified by a written instrument signed by the parties to the Agreement.
NOW, THEREFORE, the Company and Executive agree to amend the Agreement,
effective immediately, as follows:
ITEM ONE
Section 5(c) of the Agreement is amended by deleting the second sentence thereof
in its entirety and replacing it with the following language:
"In determining "average annual compensation," annual compensation
shall include Base Salary and any other taxable income, including but
not limited to amounts related to the granting, vesting or exercise of
restricted stock or stock option awards, commissions, bonuses,
severance payments, retirement benefits, director or committee fees and
fringe benefits paid or to be paid to Executive or paid for Executive's
benefit during any applicable year, as well as pension, profit sharing
or other tax-qualified retirement plan contributions or benefits
(whether or not taxable) contributed or accrued on behalf of Executive
for any applicable year."
SECOND ITEM
Section 6 of the Agreement shall be deleted in its entirety and replaced with
the following new Section 6:
6. CHANGE IN CONTROL RELATED PROVISIONS.
(a) Notwithstanding any other provision of this Agreement, for
any taxable year in which Executive shall be liable for the payment of
an excise tax under Section 4999 of the Internal Revenue Code of 1986,
as amended, (or any successor provision thereto), with respect to any
payment in the nature of the compensation made by the Holding Company
or the Institution to (or for the benefit of) Executive pursuant to
this Agreement or otherwise, the Holding Company shall pay to Executive
an amount determined under the following formula:
An amount equal to: (E x P) + X
WHERE:
X = E x P
--------------------------------------
1 - [(FI x (1 - SLI)) + SLI + E]
E = the rate at which the excise tax is
assessed under Section
4999 of the Code;
P = the amount with respect to which
such excise tax is assessed,
determined without regard to this
Section 2;
FI = the highest marginal rate of federal
income, employment, and other taxes
(other than taxes imposed under
Section 4999 of the Code) applicable
to Executive for the taxable year in
question; and
SLI = the sum of the highest marginal
rates of income and payroll tax
applicable to Executive under
applicable state and local laws for
the taxable year in question.
With respect to any payment in the nature of compensation that is made
to (or for the benefit of) Executive under the terms of this Agreement
or otherwise and on which an excise tax under Section 4999 of the Code
will be assessed, the payment determined under this Section 6 shall be
made to Executive on the earliest of (i) the date the Holding Company
is required to withhold such tax, (ii) the date the tax is required to
be paid by Executive, or (iii) at the time of the Change in Control. It
is the intention of the parties that the Holding Company provide
Executive with a full tax gross-up under the provisions of this
Agreement, so that on a net after-tax basis, the result to Executive
shall be the same as if the excise tax under Section 4999 (or any
successor provisions) of the Code had not been imposed. The tax
gross-up may be adjusted if alternative minimum tax rules are
applicable to Executive.
(b) Notwithstanding the foregoing, if it shall subsequently be
determined in a final judicial determination or a final administrative
settlement to which Executive is a party that the excess parachute
payment as defined in Section 4999 of the Code, reduced as described
above, is more than the amount determined as "P", above (such greater
amount being hereafter referred to as the "Determinative Excess
Parachute Payment") then the Holding Company's independent accountants
shall determine the amount (the "Adjustment Amount"), the Holding
Company must pay to the Executive, in order to put the Executive (or
the Holding Company, as the case may be) in the same position as the
Executive (or the Holding Company, as the case may be) would have been
if the amount determined as "P" above had been equal to the
Determinative Excess Parachute Payment. In determining the Adjustment
Amount, the independent accountants shall take into account any and all
taxes (including any penalties and interest) paid by or for Executive
or refunded to Executive or for Executive's benefit. As soon as
practicable after the Adjustment Amount has been so determined, the
Holding Company shall pay the Adjustment Amount to Executive.
(c) In each calendar year that Executive receives payments or
benefits under this Agreement, Executive shall report on his state and
federal income tax returns such information as is consistent with the
determination made by the independent accountants of the Holding
Company as described above. The Holding Company shall indemnify and
hold Executive harmless from any and all losses, costs and expenses
(including without limitation, reasonable attorney's fees, interest,
fines and penalties) which Executive incurs as a result of so reporting
such information. Executive shall promptly notify the Holding Company
in writing whenever the Executive receives notice of the Bank 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 Supplemental Agreement is being reviewed or is in
dispute. The Holding Company 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 Executive
to resolve any such proceeding with respect to any matter unrelated to
amounts paid or payable pursuant to this contract) and Executive shall
cooperate fully with the Holding Company in any such proceeding.
Executive shall not enter into any compromise or settlement or
otherwise prejudice any rights the Holding Company may have in
connection therewith without prior consent to the Holding Company.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed and its
seal to be affixed hereunto by its duly authorized officer and its directors,
and Executive has signed this Amendment, on the 20th day of December, 1999.
ATTEST: DELPHOS CITIZENS BANCORP, INC.
/s/ Xxxx X. Xxxxxx By: /s/ P. Xxxxxxx Xxxxxx
--------------------------- --------------------------------
Secretary Director
[SEAL]
WITNESS:
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------- ---------------------------------
Executive
