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Exhibit 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), entered into this 15th day of November, 1996, by and between
Peoples Financial Corporation, a savings and loan holding company incorporated
under Ohio law (hereinafter referred to as "PFC"), Peoples Federal Savings and
Loan Association of Massillon, a savings and loan association chartered under
the laws of the United States and a wholly-owned subsidiary of PFC (hereinafter
referred to as "Peoples Federal"), and Xxxx xxx Xxxxxx, an individual
(hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of PFC and Peoples 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 14, 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
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results of such review in the minutes of the Board of Directors. This AGREEMENT
shall not be renewed or extended without a taking of affirmative action by the
Boards of Directors of the EMPLOYERS to cause such renewal or extension.
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 material 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(d) 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 $102,408 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 $102,408, based upon the EMPLOYEE's individual performance and the overall
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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) 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, 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 by 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 make available an
employee group health insurance program which permits the EMPLOYERS to make
coverage available for retirees.
(d) 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 EMPLOYERS for senior
management officials of the EMPLOYERS;
(ii) Vacation time shall be scheduled by the EMPLOYEE in a reasonable
manner subject to approval by the EMPLOYERS; and
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(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. Upon termination of employment,
the EMPLOYEE shall not be entitled to receive any additional
compensation from the EMPLOYERS for unused sick leave.
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 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 after 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 are materially changed before the expiration of the
TERM, or (C) the EMPLOYEE's responsibilities, authority,
compensation or other benefits provided under this
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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 greater of the
annual salary set forth in Section 3(a) of this
AGREEMENT or the annual salary payable to the
EMPLOYEE as a result of any ANNUAL REVIEW, 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 hereunder,
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.
Payments pursuant to this subsection also may not exceed the
limit set forth in Regulatory Bulletin 27a of the Office of
Thrift Supervision.
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(iii) TERMINATION WITHOUT CHANGE OF CONTROL. In the event that
the employment of the EMPLOYEE is terminated before the
expiration of the TERM other than (A) for JUST CAUSE or (B) in
connection with or within one year after a CHANGE OF CONTROL,
the EMPLOYERS shall be obligated to continue (1) 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 (2) 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.
Payments pursuant to this subsection also may not exceed the
limit set forth in Regulatory Bulletin 27a of the Office of
Thrift Supervision.
(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 EMPLOYMENT
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 rebuttable 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
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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 Peoples Federal's 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 Peoples Federal's or PFC's 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 Peoples Federal is 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
enters into an agreement to provide assistance to or on behalf of Peoples
Federal 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 Peoples Federal or when Peoples Federal is
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
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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.
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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:
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If to PFC and/or Peoples' Federal:
Peoples Federal Savings and Loan Association of Massillon
000 Xxxxxxx Xxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Secretary
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 xxx Xxxxxx
0000 Xxxxxx Xxxxxx, X.X.
Xxxxxxxxx, Xxxx 00000
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: PEOPLES FINANCIAL CORPORATION
Xxxxx X. Xxxxxx By Xxxxx X. Xxxxxxxx
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its Treasurer
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Attest: PEOPLES FEDERAL SAVINGS AND LOAN
ASSOCIATION OF MASSILLON
Xxxxx X. Xxxxxx By Xxxxx X. Xxxxxx
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its Secretary
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Attest:
Xxxxx X. Xxxxxx Xxxx xxx Xxxxxx
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Xxxx xxx Xxxxxx
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