EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this "AGREEMENT"),
entered into this 6th day of November, 1996, by and between First Federal
Bancorp, Inc., a savings and loan holding company incorporated under Ohio law
(hereinafter referred to as "Bancorp"), First Federal Savings Bank of Eastern
Ohio, a savings bank chartered under the laws of the United States and a
wholly-owned subsidiary of Bancorp (hereinafter referred to as "First Federal"),
and J. Xxxxxxx Xxxxxxx, an individual (hereinafter referred to as the
"EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of Bancorp and First Federal
(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 the President and Chief Executive Officer of each of the
EMPLOYERS;
WHEREAS, the EMPLOYEE desires to continue to serve as the President and
Chief Executive Officer of each of the EMPLOYERS; 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:
1. Employment and 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 each of the
EMPLOYERS. The term of this AGREEMENT shall commence on the date hereof and
shall end on November 5th, 1999 (hereinafter referred to as the "TERM"). In
January of each year, the Boards of Directors of the EMPLOYERS shall review the
EMPLOYEE's performance and record the results of such review in the minutes of
the Board of Directors.
2. Duties of EMPLOYEE.
(a) General Duties and Responsibilities. As the President and Chief
Executive 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 (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.
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 $121,437 until changed by the Boards of
Directors of the EMPLOYERS in accordance with Section 3(b) of this
AGREEMENT.
(b) Annual Salary Review. In January of each year throughout the TERM,
the annual salary of the EMPLOYEE shall be reviewed by the Boards of
Directors of the EMPLOYERS and shall be set, effective January 1, at an
amount not less than $121,437, 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 Boards of
Directors of the EMPLOYERS.
(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 accordance with the
existing policies and procedures of the EMPLOYERS pertaining to
reimbursement of expenses to senior management officials.
(d) Employee Benefit Program.
(i) 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.
(ii) After the expiration of the TERM or the termination of the
employment of the employee for any reason other than JUST CAUSE (as
defined hereinafter), the EMPLOYERS shall provide a group health
insurance program in which the EMPLOYEE and his spouse will be
eligible to participate and which shall provide substantially the
same benefits as are available to retired employees of the EMPLOYERS
on the date of this AGREEMENT until both the EMPLOYEE and his spouse
become 65 years of age; provided, however that all premiums for such
program shall be paid equally by the EMPLOYERS and the EMPLOYEE
and/or his spouse after the EMPLOYEE's retirement; provided further,
however, that the EMPLOYEE may only participate in such program for
as long as the EMPLOYERS elect in their sole discretion to make
available an employee group health insurance program which permits
the EMPLOYERS to make coverage available for retirees.
(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;
(ii) Vacation time shall be scheduled by the EMPLOYEE in a
reasonable manner. 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 during any one
year. Vacation time accrued in any one year may not be carried over
into any succeeding 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; provided, however,
that the number of accrued days of sick leave shall not exceed 35
days.
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 upon the delivery by the
EMPLOYERS of written notice of employment termination to the EMPLOYEE.
Without limiting the generality of the foregoing sentence, the following
subparagraphs (i), (ii) and (iii) of this Section 4(a) shall govern the
obligations of the EMPLOYERS to the EMPLOYEE upon the occurrence of the
events described in such subparagraphs:
(i) Termination for JUST CAUSE. In the event that the EMPLOYERS
terminate the employment of the EMPLOYEE during the TERM because of
the EMPLOYEE's failure to comply with the Human Resources Policies
of the EMPLOYERS or 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.
(ii) 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, (A) the employment of the EMPLOYEE is terminated for any
reason other than JUST CAUSE before the expiration of the TERM, (B)
the present capacity or circumstances in which the EMPLOYEE is
employed is changed before the expiration of the TERM, or (C) the
EMPLOYEE's responsibilities, authority, compensation or other
benefits provided under this AGREEMENT are materially reduced, then
the following shall occur:
(I) The EMPLOYERS shall promptly pay to the EMPLOYEE or to
his beneficiaries, dependents or estate an amount equal to the
sum of (1) the amount of compensation to which the EMPLOYEE
would be entitled for the remainder of the TERM under this
AGREEMENT, plus (2) the difference between (x) the product of
three, multiplied by the total compensation paid to the
EMPLOYEE for the immediately preceding calendar year as set
forth on the Form W-2 of the EMPLOYEE, less (xx) the amount
paid to the EMPLOYEE pursuant to clause (1) of this
subparagraph (I);
(II) The EMPLOYEE, his 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
(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 EMPLOYERS
thereunder, except as specifically stated in subparagraph
(II).
In the event that payments pursuant to this subsection (ii) 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.
(iii) Termination Without CHANGE OF CONTROL. In the event that the
employment of the EMPLOYEE is terminated before the expiration of
the TERM for any reason other than JUST CAUSE or in connection with
or within one year of a CHANGE OF CONTROL, the EMPLOYERS shall be
obligated to continue (A) to pay on a monthly basis to the EMPLOYEE,
his designated beneficiaries or his estate, his annual salary
provided pursuant to Section 3(a) or (b) of this AGREEMENT until the
expiration of the TERM and (B) to provide to the EMPLOYEE at the
EMPLOYERS' 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 the EMPLOYEE becomes employed
full-time by another employer. In the event that payments pursuant
to this subsection (iii) 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 those limits.
(b) 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.
(c) "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. [SECTION] 1828(k) and any regulations
promulgated thereunder.
(d) 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. [SECTION] 574.4(a), or any person or
entity obtains "rebuttable control" within the meaning of 12 C.F.R.
[SECTION] 574.4(b) and has not rebutted control in accordance with 12
C.F.R. [SECTION] 574.4(c).
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)(1) 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.
(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 or the Resolution Trust 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.
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.
7. Confidential Information. 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.
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.
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 EMPLOYERS 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 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.
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 this 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 EMPLOYERS or any predecessor of the EMPLOYERS 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 Bancorp and/or First Federal:
First Federal Savings Bank of Eastern Ohio
Xxxxx & Xxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000
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:
Mr. J. Xxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
IN WITNESS WHEREOF, each of the EMPLOYERS 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: FIRST FEDERAL BANCORP, INC.
/s/ Xxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxxxx, III
------------------------------- ----------------------------------------
Xxxx X. Xxxxxxxx, III
its Chairman
Attest: FIRST FEDERAL SAVINGS BANK OF EASTERN OHIO
/s/ Xxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxxxx, III
------------------------------- ----------------------------------------
Xxxx X. Xxxxxxxx, III
its Chairman
Attest:
/s/ Xxxxx X. Xxxxxx /s/ J. Xxxxxxx Xxxxxxx
------------------------------- ----------------------------------------
J. Xxxxxxx Xxxxxxx
