EMPLOYMENT AGREEMENT
Exhibit 99.1
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this “AGREEMENT”), entered into as of
the 10th day of April, 2009, by and among Greenville Federal Financial Corporation, a federally
chartered mid-tier savings and loan holding company (hereinafter referred to as “HOLDING COMPANY”),
Greenville Federal, a federally chartered savings bank and a wholly-owned subsidiary of HOLDING
COMPANY (hereinafter referred to as “BANK”), and Xxxx X. Xxxxxx, an individual (hereinafter
referred to as the “EMPLOYEE”);
WITNESSETH:
WHEREAS, as a result of the skill, knowledge and experience of the EMPLOYEE, HOLDING COMPANY
and BANK desire to retain the services of the EMPLOYEE as President and Chief Executive Officer of
HOLDING COMPANY and BANK (hereinafter collectively referred to as the “EMPLOYERS”);
WHEREAS, the EMPLOYEE desires to serve as the President and Chief Executive Officer of HOLDING
COMPANY and BANK; and
WHEREAS, the EMPLOYEE and the EMPLOYERS desire to enter into this Agreement to set forth the
terms and conditions of the employment relationship between the EMPLOYERS and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
EMPLOYERS and the EMPLOYEE hereby agree as follows:
Section l. Employment and Term.
(a) Term. Upon the terms and subject to the conditions of this AGREEMENT, the
EMPLOYERS hereby employ the EMPLOYEE, and the EMPLOYEE hereby accepts employment, as the President
and Chief Executive Officer of BANK and of HOLDING COMPANY commencing on May 1, 2009. The term of
this AGREEMENT shall commence on May 1, 2009, and shall end on June 30, 2011, subject to extension
pursuant to subsection (b) of this Section 1 (hereinafter, including any such extensions, referred
to as the “TERM’’), and to earlier termination as provided herein.
(b) Extension. Prior to June 30 of each year during the term of this AGREEMENT, the
Board of Directors of the EMPLOYERS shall review the performance of the EMPLOYEE and this AGREEMENT
and document the results of the review in the board minutes. In connection with such annual
review, the TERM shall be extended for a one-year period beyond the then-effective expiration date,
provided that the Boards of Directors of the EMPLOYERS determine in a duly adopted resolution that
this AGREEMENT should be extended. Any such extension shall be subject to the written consent of
the EMPLOYEE.
Section 2. Duties of the EMPLOYEE.
(a) General Duties and Responsibilities. As an officer of each of the EMPLOYERS, the
EMPLOYEE shall perform the duties and responsibilities customary for such offices to the best of
his ability and in accordance with the policies established by the Boards of Directors of the
EMPLOYERS and all applicable laws and regulations. The EMPLOYEE shall perform such other duties
not inconsistent with his position as may be assigned to him from time to time by the Boards of
Directors of the EMPLOYERS; provided, however, that the EMPLOYERS shall employ the EMPLOYEE during
the TERM in a senior executive capacity without diminishment of the importance or prestige of his
position.
(b) Devotion of Entire Time to the Business of the EMPLOYERS. 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 without the prior written consent of the Boards of Directors of the
EMPLOYERS; provided, however, that the EMPLOYEE shall not be precluded from (i) vacations and other
leave time in accordance with Section 3(e) hereof;
(ii) reasonable participation in community, civic, charitable or similar organizations; or (iii)
the pursuit of personal investments which do not interfere or conflict with the performance of the
EMPLOYEE’S duties to the EMPLOYERS.
(c) Appointment as Director. The EMPLOYERS agree that the EMPLOYEE shall be appointed
as a director of each of HOLDING COMPANY and BANK effective on the first day of the EMPLOYEE’S
employment by the EMPLOYERS.
Section 3. Compensation, Benefits and Reimbursements.
(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 $180,000
until changed by the Boards of Directors of the EMPLOYERS in accordance with Section 3(b) of this
AGREEMENT or otherwise.
(b) Annual Salary Review. Each year throughout the TERM, the annual salary of the
EMPLOYEE shall be reviewed by the Compensation Committee of the Board of Directors of BANK and
shall be set, effective for the next year, at a total amount of not less than $180,000, based upon
the EMPLOYEE’S individual performance and the overall profitability and financial condition of the
EMPLOYERS (hereinafter referred to as the “ANNUAL REVIEW”). The results of the ANNUAL REVIEW shall
be reflected in the minutes of the Compensation Committee.
(c) Expenses. In addition to any compensation received under Section 3(a) or (b) of
this AGREEMENT, the EMPLOYERS 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. Such reimbursement shall be made in
-2-
accordance with the
existing policies and procedures of the EMPLOYERS pertaining to reimbursement of expenses to senior
management officials.
(d) Employee Benefit Program. 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 EMPLOYERS from time to time, including programs in
respect of group health, disability or life insurance, reimbursement of membership fees in civic,
social and professional organizations and all employee benefit plans or programs hereafter adopted
in writing by the Boards of Directors of the EMPLOYERS, for which senior management personnel are
eligible, including any employee stock ownership plan, stock option plan or other stock benefit
plan (hereinafter collectively referred to as the “BENEFIT PLANS”). Notwithstanding the foregoing
sentence, the EMPLOYERS may discontinue or terminate at any time any such BENEFIT PLANS, now
existing or hereafter adopted, to the extent permitted by the terms of such plans and shall not be
required to compensate the EMPLOYEE for such discontinuance or termination.
(e) 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, subject to the
following conditions:
(i) The EMPLOYEE shall be entitled to an annual vacation in accordance with the
policies periodically established by the Boards of Directors of the EMPLOYERS for senior
management officials of the EMPLOYERS, the duration of which shall not be less than four
weeks each calendar year;
(ii) Vacation time shall be scheduled by the EMPLOYEE in a reasonable manner and shall
be subject to approval by the Boards of Directors of the EMPLOYERS. The EMPLOYEE shall not
be entitled to receive any additional compensation from the EMPLOYERS in the event of his
failure to take the full allotment of vacation time in any calendar year; and
(iii) The EMPLOYEE shall be entitled to annual sick leave as established by the Boards
of Directors of the EMPLOYERS for senior management officials of the EMPLOYERS. In the
event that any sick leave time shall not have been used during any calendar year, such leave
shall accrue to subsequent calendar years only to the extent authorized by the Boards of
Directors of the EMPLOYERS. Upon termination of employment, the EMPLOYEE shall not be
entitled to receive any additional compensation from the EMPLOYERS for unused sick leave.
(f) Signing Bonus. BANK shall pay the EMPLOYEE a $10,000 bonus to be paid at the end
of the EMPLOYEE’s first pay period.
(g) Equity Awards. The EMPLOYEE shall be awarded on the effective date of his
employment (i) an option to purchase 28,000 shares of common stock of HOLDING COMPANY and (ii)
11,200 retention shares pursuant to the Greenville Federal Financial Corporation 2006
-3-
Equity Plan (the “EQUITY PLAN”). The exercise price of the option shall be 100% of the fair market
value of the common stock of HOLDING COMPANY, as determined under the EQUITY PLAN. The option and
the retention shares will vest at the rate of one fifth per year for five years.
(h) Relocation Expense Reimbursement. BANK shall reimburse the EMPLOYEE for the
reasonable and necessary costs he incurs in connection with the following relocation expenses:
(i) packing, moving and unpacking household furnishings and personal effects, including
the hiring of a professional moving company and temporary storage of goods for up to 30
days;
(ii) overnight costs for two house hunting/temporary living location trips and
temporary living prior to relocation for up to 90 days;
(iii) closing costs related to the sale of the EMPLOYEE’s resident located at 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx (the “RESIDENCE”), including a broker’s fee/commission
up to 6% of the purchase price;
(iv) closing costs related to the purchase of a new residence, including payment of up
to 2 points for mortgage origination fees;
(v) incidental relocation expenses not included in subsections (i) to (iv) of this
Section 3(h) (e.g., utility set up fees), to a maximum total of $1,000; and
(vi) an increase in the amount of the relocation reimbursements in this Section 3(h) by
the amount of any income tax the EMPLOYEE owes and pays only with respect to the amount of
the reimbursements under this Section 3(h).
Any reimbursement made pursuant to this Section 3(h) shall be made no later than the 15th day
of the taxable year of the EMPLOYEE or the taxable year of HOLDING COMPANY, whichever is later,
following the year in which the expenses being reimbursed are incurred; provided, however, that
reimbursement of taxes pursuant to Section 3(h)(vi) shall be made no later than the end of the
taxable year of the EMPLOYEE following the year in which the EMPLOYEE remits the taxes being
reimbursed.
(i) Purchase of House. From and after the date of this AGREEMENT, the EMPLOYEE shall
attempt in good faith to sell the RESIDENCE, including listing the RESIDENCE for sale with a real
estate broker selected by the EMPLOYEE (but any such listing agreement shall exclude any sale of
the RESIDENCE by the EMPLOYEE to HOLDING COMPANY as provided below). If (a) by August 1, 2009, the
EMPLOYEE has not entered into a contract for the sale of the RESIDENCE, or (b) the EMPLOYEE enters
into a contract for the sale of the RESIDENCE by August 1, 2009, but such contract is thereafter
terminated for reasons other than a default by the EMPLOYEE thereunder, then, at the option of the
EMPLOYEE
-4-
exercisable by written notice to HOLDING COMPANY, HOLDING COMPANY shall purchase
the RESIDENCE from the EMPLOYEE for a purchase price equal to the then fair market value of the
RESIDENCE. If the EMPLOYEE has the right to and does exercise the EMPLOYEE’s option to require the
HOLDING COMPANY to purchase the RESIDENCE from the EMPLOYEE, each of the EMPLOYEE and HOLDING
COMPANY shall select a qualified real estate appraiser to determine the fair market value of the
RESIDENCE. Each such appraiser shall appraise the RESIDENCE promptly after selection and shall
give written notice of that appraiser’s determination of the fair market value of the RESIDENCE to
the EMPLOYEE and HOLDING COMPANY. The fair market value for purposes of the price to be paid by
HOLDING COMPANY shall be the average of the fair market values determined by the two appraisers.
Within 30 days after both appraisers have provided written notice of their determinations, the
EMPLOYEE shall convey to HOLDING COMPANY or HOLDING COMPANY’s nominee, by limited warranty deed in
the statutory form, marketable title to the fee simple interest in the RESIDENCE, with release of
dower if applicable, free and clear of all liens and encumbrances other than real estate taxes and
assessments not due and payable and easements, covenants, conditions and restrictions of record
that do not materially adversely affect the residential use of the RESIDENCE, and HOLDING COMPANY
shall pay to the EMPLOYEE, as the purchase price for the RESIDENCE, the fair market value of the
RESIDENCE, subject to customary prorations and adjustments. The EMPLOYEE shall pay the fees of the
appraiser appointed by the EMPLOYEE, and HOLDING COMPANY shall pay the fees of the appraiser
appointed by HOLDING COMPANY.
Section 4. Termination of Employment.
(a) General. For purposes of this AGREEMENT, (i) a termination of employment shall
mean the EMPLOYEE’S separation from service, as that phrase is defined in Section 409A of the
Internal Revenue Code of 1986, as amended (the “CODE”) and Treasury Regulation (“REG.”) §
1.409A-1(h); and (ii) any reference to a termination by or from the EMPLOYERS shall include a
termination by or from the EMPLOYERS, and any other entity that, along with the EMPLOYERS, would be
considered a “service recipient” within the meaning of Section 409A of the CODE and REG. §
1.409A-1(g). The following subsections (A), (B) and (C) of this Section 4(a) shall govern the
obligations of the EMPLOYERS to the EMPLOYEE upon the occurrence of the events described in such
subsections:
(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,
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 or plea of guilty or nolo contendere of a felony
or for fraud or embezzlement, or material breach of any provision of this AGREEMENT
(collectively, “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 and this
AGREEMENT shall terminate at that time. No act, or failure to act, on the
-5-
EMPLOYEE’S part shall be considered “willful” if he has
acted or failed to act with good faith and with a reasonable belief that his action or
failure to act was in the best interests of the EMPLOYERS.
(B) Termination in connection with CHANGE OF CONTROL.
(1) In the event that the EMPLOYERS terminate the employment of the EMPLOYEE
before the expiration of the TERM without JUST CAUSE and within six months before
the occurrence of a CHANGE OF CONTROL (as defined hereinafter) or within one year
following the occurrence of a CHANGE OF CONTROL, and if the EMPLOYEE signs a general
release as required by Section 4(d) of this AGREEMENT, then the following shall
occur:
(a) The EMPLOYERS shall promptly pay to the EMPLOYEE, or to his
dependents, beneficiaries or estate, an amount equal to three times the
EMPLOYEE’S COMPENSATION (as defined below) in a lump sum without reduction
for time value of money or other discount. This payment shall be made as
promptly as practicable, but in no event later than the 15th day of the
third month following the end of the taxable year of the EMPLOYEE in which
the termination (or, if the EMPLOYEE was terminated prior to a CHANGE OF
CONTROL, the CHANGE OF CONTROL) occurred or, if later, the end of the
taxable year of HOLDING COMPANY in which the termination occurred. For
purposes of this section, “EMPLOYEE’S COMPENSATION” shall mean: (I) the
higher of the EMPLOYEE’S annual base salary immediately prior to occurrence
of the CHANGE OF CONTROL or termination of the EMPLOYEE’S employment; plus
(II) the annual highest bonus paid to the EMPLOYEE by the EMPLOYERS during
the five years preceding his termination or such shorter period of time as
the EMPLOYEE has been employed by the EMPLOYERS;
(b) Provided the EMPLOYEE and/or any eligible dependents properly elect
COBRA (as defined herein) coverage, the EMPLOYERS or their successors,
survivors or assigns shall pay one hundred percent (100%) of all applicable
premiums for continuation coverage for the EMPLOYEE and/or his dependents
under the group health plan of the EMPLOYERS in which the EMPLOYEE was a
participant at the time of the termination of his employment until the date
on which the EMPLOYEE is eligible to participate in a group health plan of
another employer as a full-time employee; provided, however, that in no
event shall this period extend beyond the period of time during which the
EMPLOYEE would be entitled to continuation coverage under the group health
plan of BANK under Section 4980B (COBRA) of the CODE;
-6-
(c) The EMPLOYERS or their successors, survivors or assigns shall
reimburse the EMPLOYEE for one hundred percent (100%) of all
applicable premiums paid by the EMPLOYEE and not otherwise reimbursed or
compensated for by insurance for disability and life insurance policies not
to exceed, in scope or benefit, any group disability and/or life insurance
plan of the EMPLOYERS in which the EMPLOYEE was a participant at the time of
the termination of his employment until the earlier of eighteen (18) months
after the EMPLOYEE’S termination of employment or the date on which the
EMPLOYEE is eligible to participate in a similar disability or life
insurance plan of another employer as a full-time employee. Any
reimbursement made pursuant to this Section 4(a)(B)(1)(c) shall (I) be
limited to the amount the EMPLOYERS pay for each such disability and life
insurance policies for their then current employees; (II) not affect the
expenses eligible for reimbursement in any other taxable year of the
EMPLOYEE; (III) be made on or before the last day of the taxable year of the
EMPLOYEE following the taxable year of the EMPLOYEE in which the expense was
incurred; and (IV) not be subject to liquidation or exchange for another
benefit;
(d) 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 subsections (b) and (c); and
(e) Notwithstanding the foregoing, no amounts will be distributed
pursuant to this Section 4(a)(B)(1) with respect to the termination of
employment of the EMPLOYEE without JUST CAUSE by the EMPLOYERS within six
months prior to the occurrence of a CHANGE OF CONTROL unless the events or
actions giving rise to the CHANGE OF CONTROL also constitute a “change of
control event” under Section 409A of the CODE and Treasury Regulation §
1.409A-3(i)(5).
(2) The EMPLOYEE may terminate his employment with the EMPLOYERS for GOOD
REASON (as defined below) during the one-year period following the occurrence of a
CHANGE OF CONTROL and, if the EMPLOYEE signs a general release as required by
Section 4(d) of this AGREEMENT, shall be entitled to the compensation and benefits
as set forth in Section 4(a)(B)(1) of this AGREEMENT. For purposes of this
subsection, the term “GOOD REASON” shall mean the occurrence of any of the following
during the one-year period following the occurrence of a CHANGE OF CONTROL:
-7-
(a) a material diminution in the EMPLOYEE’S base compensation;
(b) a material diminution in the EMPLOYEE’S authority, duties, or
responsibilities (for this purpose and without limiting the foregoing, a
material diminution shall be deemed to occur if the EMPLOYEE is no longer
the President or Chief Executive Officer of the EMPLOYERS);
(c) a requirement that the EMPLOYEE report to a corporate officer or
employee instead of reporting directly to the Board of Directors of the
EMPLOYERS or any of their successors, survivors or assigns;
(d) a material diminution in the budget over which the EMPLOYEE retains
authority;
(e) a material change in the geographic location at which the EMPLOYEE
is required to perform services; or
(f) the EMPLOYERS or any of their successors, survivors or assigns
otherwise breaches this AGREEMENT in any material respect.
The EMPLOYEE shall be required to provide written notice to the EMPLOYERS or their
successors, survivors or assigns within ninety (90) days of the initial existence of
the condition constituting GOOD REASON, and the EMPLOYERS shall have thirty (30)
days from the giving of this written notice in which to remedy the condition
constituting GOOD REASON and not be required to pay the compensation and benefits
described in Section 4(a)(B)(1). If the EMPLOYEE shall fail to provide such written
notice to the EMPLOYERS within the period described above, then he will be deemed to
have consented to such condition and the EMPLOYERS shall have no obligation to pay
the compensation and benefits described in Section 4(a)(B)(1) with respect to such
condition.
(3) Definition of “CHANGE OF CONTROL”. A “CHANGE OF CONTROL” shall
mean any one of the following events: (a) the acquisition, directly or indirectly,
of ownership or power to vote more than 50% of the voting stock of either of the
EMPLOYERS; (b) the merger of either of the EMPLOYERS into, or the consolidation of
either of the EMPLOYERS with, another corporation, or the merger of another
corporation into either of the EMPLOYERS, on a basis whereby less than fifty percent
of the total voting power of the surviving corporation is represented by shares held
by former shareholders of HOLDING COMPANY prior to such merger or consolidation; (c)
the acquisition of the ability to control the election of a majority of the
directors of either of the EMPLOYERS; (d) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of HOLDING
-8-
COMPANY or BANK 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 HOLDING
COMPANY or BANK 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 HOLDING COMPANY or BANK; (e) the acquisition by any person or entity of
the power to direct either of BANK’s management or policies, if the Board of
Directors has made a determination that such acquisition constitutes or will
constitute an acquisition of control of either of the EMPLOYERS for the purpose of
the Bank Holding Company Act or the Change in Bank Control Act and the regulations
thereunder; or (f) BANK shall have sold substantially all of its assets. For
purposes of this paragraph, the term “person” refers to an individual or
corporation, partnership, trust, association, joint venture, pool, syndicate or
other organization or entity.
Notwithstanding the foregoing, in no event shall (I) the ownership of stock of BANK
by HOLDING COMPANY or the ownership of stock of HOLDING COMPANY by Greenville
Federal MHC, or (II) the conversion of the EMPLOYERS or Greenville Federal MHC from
the mutual holding company form of organization to the full stock form of
organization, constitute a CHANGE OF CONTROL.
(C) Termination Without CHANGE OF CONTROL. In the event that the employment of
the EMPLOYEE is terminated by the EMPLOYERS before the end of the TERM for any reason other
than death, the inability to perform his duties because of a medically diagnosable condition
as provided in Section 4(c) of this AGREEMENT, JUST CAUSE or in connection with or within
six months before or one year after a CHANGE IN CONTROL, or in the event that the employment
of the EMPLOYEE is terminated by the EMPLOYEE for GOOD REASON, and if the EMPLOYEE signs a
general release as required by Section 4(d) of this AGREEMENT, the EMPLOYERS shall be
obligated (1) to make a lump sum payment to the EMPLOYEE within two weeks after the
EMPLOYEE’S termination of employment in an amount equal to one-half of the annual salary
required to be paid to the EMPLOYEE under Section 3(a) of this AGREEMENT, as the amount may
have been adjusted under Section 3(b) of this AGREEMENT;
(2) until the earliest of (i) the EMPLOYEE and his spouse both becoming 65 years of age,
(ii) the EMPLOYEE’S becoming employed full-time by another employer, or (iii) the expiration
of the period of time during which the EMPLOYEE would be entitled to continuation coverage
under the group health plan of BANK under Section 4980B (COBRA) of the CODE, to provide to
the EMPLOYEE and/or his dependents at the EMPLOYEE’S expense life and disability benefits
substantially equal to those being provided to the EMPLOYEE at the date of termination of
his employment; and (3) provided the EMPLOYEE and/or any eligible dependents properly elect
COBRA coverage, to provide to the EMPLOYEE and/or any eligible dependents continuation
coverage under the group health plan of BANK under COBRA. The EMPLOYERS’ obligation to
provide life and disability benefits shall be contingent on the EMPLOYEE
-9-
and/or his
dependents being insurable in the EMPLOYERS’ group insurance plans. Notwithstanding the
foregoing provisions, the EMLOYEE and his spouse may only participate in a health insurance
program for as long as the EMPLOYERS make available
an employee group health insurance program which permits the EMPLOYERS to make coverage
available for similarly situated former employees; provided, however, that the EMPLOYERS
shall not be required to provide or maintain any employee group insurance program.
(b) Death of the EMPLOYEE. The TERM automatically terminates upon the death of the
EMPLOYEE, unless the employment of the EMPLOYEE has been terminated prior to the EMPLOYEE’S death
pursuant to Section 4(a) of this AGREEMENT. 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.
(c) Medically Diagnosable Condition: Inability of the EMPLOYEE to Perform Duties. If
the EMPLOYEE is unable to perform his duties as set forth in Section 2 of this AGREEMENT because of
a medically diagnosable physical or mental condition for a period of one hundred eighty (180)
consecutive days or more, the EMPLOYERS shall have the right to terminate the employment of the
EMPLOYEE by giving him written notice. In the event that the employment of the EMPLOYEE is
terminated by the EMPLOYERS before the end of the TERM as provided in this Section 4(c), and if the
EMPLOYEE signs a general release as required by Section 4(d) of this AGREEMENT, the EMPLOYERS shall
be obligated to make a lump sum payment to the EMPLOYEE within two weeks after the EMPLOYEE’S
termination of employment in the amount equal to one-half of the amount of the EMPLOYEE’S annual
salary provided pursuant to Sections 3(a) and 3(b) of this AGREEMENT.
(d) Payments Conditioned on General Release. As a condition precedent to the payment
by the EMPLOYERS to the EMPLOYEE of any amounts and/or the providing to the EMPLOYEE and/or his
dependents any benefits provided in Sections 4(a)(B), 4(a)(C) and/or 4(c) of this AGREEMENT, the
EMPLOYEE shall execute a valid general release of any and all claims against the EMPLOYERS in a
form prescribed by the EMPLOYERS. If such release is not executed and returned to the EMPLOYERS
within one hundred fifty days after the Participant’s termination, the Participant shall forfeit
all rights under Sections 4(a)(B), 4(a)(C) and 4(c) of this AGREEMENT.
(e) “Golden Parachute” Provision.
(i) 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. §1828(k) and FDIC regulation
12 C.F.R. Part 359, Golden Parachute and Indemnification Payments.
(ii) In the event that payments pursuant to Section 4(a), alone or in combination with
any other compensation, would result in the imposition of a penalty tax
-10-
pursuant to Sections
280G and 4999 of the CODE and the regulations promulgated thereunder (collectively, “SECTION
280G”), such payments shall be reduced to the maximum amount that may be paid under SECTION
280G without resulting in the
imposition of a penalty tax. For purposes of this Section, any determination that a
payment is subject to SECTION 280G shall be made in writing by the principal certified
public accounting firm or other professional selected by the EMPLOYERS in their sole
discretion. Any reduction pursuant to this Section 4(e)(ii) shall be first applied against
amounts that are not subject to Section 409A of the CODE and, thereafter, shall be applied
against all remaining amounts subject to Section 409A of the CODE on a pro rata basis.
(f) Termination of Agreement. This AGREEMENT shall terminate, as follows:
(i) If the EMPLOYEE signs a general release as required by Section 4(d) of this
AGREEMENT on or before the one hundred eightieth (180th) day after the termination of his
employment, when the EMPLOYERS have satisfied any obligations to the EMPLOYEE under Sections
4(a)(B), 4(a)(C) and/or 4(c) of this AGREEMENT.
(ii) If the EMPLOYEE does not sign a binding general release as required by Section
4(d) of this AGREEMENT, on or before the one hundred eightieth (180th) day after the
termination of his employment, at the end of that one-hundred-eighty-day period.
Section 5. Special Regulatory Events. Notwithstanding Section 4 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 their
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.
-11-
(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 6. 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; provided, however, that the assumption of the EMPLOYERS’
obligations and undertakings hereunder shall not affect the EMPLOYEE’S right to payments pursuant
to Section 4(a)(B) of this AGREEMENT in connection with such consolidation, merger or transfer of
assets.
Section 7. Covenant Not to Compete and Confidential Information.
(a) Throughout the employment of the EMPLOYEE under this AGREEMENT and for a period of one
year after termination of employment for any reason, subject to the geographic limitation contained
in subsection (c) of this Section 7, the EMPLOYEE agrees that he will not, except on behalf of the
EMPLOYERS or with the written consent of the EMPLOYERS:
(i) engage in any business activity, directly or indirectly, on his own behalf or as a
partner, stockholder (except by ownership of less than 5% of the outstanding stock of a
publicly held corporation), director, trustee, principal, agent, employee, consultant or
otherwise of any person, firm or corporation, which is engaged in any activity in which the
EMPOYERS or any parent, subsidiary or affiliate of the EMPLOYERS is engaged at the time;
(ii) allow the use of his name by or in connection with any business that is
competitive with any activity in which the EMPLOYERS or any parent, subsidiary or affiliate
of the EMPLOYERS is engaged; or
(iii) offer employment to or employ, for himself or on behalf of any competitor of the
EMPLOYERS or any parent, subsidiary or affiliate, any person who at any time within the
prior three years shall have been employed by the EMPLOYERS or any parent, subsidiary or
affiliate of the EMPLOYERS.
-12-
(b) The parties acknowledge that this Section 7 is fair and reasonable under the
circumstances. It is the desire and intent of the parties that the provisions of this Section 7
shall be enforced to the fullest extent permitted by law. Accordingly, if any particular portion
of this Section 7 shall be adjudicated to be invalid or unenforceable, this Section 7 shall be deemed
amended to:
(i) reform the particular portion to provide for such maximum restrictions as will be
valid and enforceable, or if that is not possible,
(ii) delete the portion found invalid or unenforceable, such reformation or deletion to
apply only with respect to the operation of this Section 7 in the particular jurisdiction in
which such adjudication is made.
(c) During the term of the EMPLOYEE’s employment, the covenants contained in this Section 7
shall apply without regard to geographic location. Upon the termination of the EMPLOYEE’s
employment, the covenants contained in this Section 7 shall be limited to a 20-mile radius of any
office of the EMPLOYERS.
(d) Notwithstanding any other provision of this Agreement to the contrary, in the event the
EMPLOYEE violates the above restrictive covenants, all amounts otherwise owing to the EMPLOYEE by
the EMPLOYERS shall be forfeited by the EMPLOYEE, and the EMPLOYERS, in addition to any other
remedy, shall be under no further obligation to the EMPLOYEE.
(e) The EMPLOYEE acknowledges that during his employment he will learn and have access to
confidential information regarding the EMPLOYERS and their 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 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
himself (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 8. Nonassignability. Neither this AGREEMENT nor any right or interest
hereunder shall be assignable by the EMPLOYEE, his beneficiaries, or legal representatives without
the EMPLOYERS’ prior written consent; provided, however, that nothing in this Section 8 shall
preclude (a) the EMPLOYEE from designating a beneficiary to receive any benefits payable hereunder
upon his death, or (b) 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.
-13-
Section 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.
Section 10. 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 11. Amendment of AGREEMENT. This AGREEMENT may not be modified or amended,
except by an instrument in writing signed by the parties hereto.
Section 12. Section 409A of the CODE. The compensation and benefits payable pursuant
to this AGREEMENT are intended to be exempt from the requirements of Section 409A of the CODE and,
to the maximum extent permitted by law, shall be interpreted in a manner that results in its
continued exemption from the requirements of that section. In the event the EMPLOYEE is a
“specified employee,” within the meaning of Section 409A of the CODE and the Treasury Regulations
promulgated thereunder and as determined under HOLDING COMPANY’S policy for determining specified
employees, on the date of termination, then payment of any amounts subject to Section 409A of the
CODE shall be paid on the first business day of the seventh month following the date of the
EMPLOYEE’S termination, or, if earlier, the date of the EMPLOYEE’S death.
Section 13. 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 14. 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 15. 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.
-14-
Section 16. 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 17. 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 18. 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 HOLDING COMPANY and/or BANK:
Greenville Federal
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chairman of the Board
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chairman of the Board
With copies to:
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
Suite 2000, Atrium Two
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Suite 2000, Atrium Two
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
If to the EMPLOYEE to:
Xx. Xxxx X. Xxxxxx
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
-15-
IN WITNESS WHEREOF, the EMPLOYERS have caused this AGREEMENT to be executed by their duly
authorized officers, and the EMPLOYEE has signed this AGREEMENT, each as of the day and year first
above written.
Attest:
|
GREENVILLE FEDERAL FINANCIAL CORPORATION | |||
/s/ Xxxxx X. Xxxxxxx
|
By | Xxxxx X. Xxxx | ||
| Xxxxx X. Xxxx | ||||
| its Chairman | ||||
Attest:
|
GREENVILLE FEDERAL | |||
/s/ Xxxxx X. Xxxxxxx
|
By | Xxxxx X. Xxxx | ||
| Xxxxx X. Xxxx | ||||
| its Chairman | ||||
Attest: |
||||
| /s/ Xxxx X. Xxxxxx | ||||
| Xxxx X. Xxxxxx | ||||
-16-
