Exhibit No. 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into this 6 th day of March, 1997 ("Effective
Date"), by and between First Federal Savings and Loan Association of
Sistersville (the "Savings Association") and Xxxxxxx X. Xxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by the Savings
Association as President and Chief Executive Officer and is experienced in all
phases of the business of the Savings Association; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Savings Association and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as Savings
Association as President and Chief Executive Officer. The Employee shall render
such administrative and management services to the Savings Association and the
parent holding company of the Savings Association ("Parent") as are currently
rendered and as are customarily performed by persons situated in a similar
executive capacity. The Employee shall promote the business of the Savings
Association and Parent. The Employee's other duties shall be such as the Board
of Directors for the Savings Association (the "Board of Directors" or "Board")
may from time to time reasonably direct, including normal duties as an officer
of the Savings Association.
2. Base Compensation. The Savings Association agrees to pay the Employee
during the Term of this Agreement (as hereinafter defined at Section 5) a salary
at the rate of $ per annum, payable in cash not less frequently than
monthly; provided, that the rate of such salary shall be reviewed by the Board
of Directors not less often than annually, and Employee shall be entitled to
receive annually an increase at such percentage or in such an amount as the
Board of Directors in its sole discretion may decide at such time.
3. Discretionary Bonus. The Employee shall be entitled to participate in
an equitable manner with all other senior management employees of the Savings
Association in discretionary bonuses that may be authorized and declared by the
Board of Directors to its senior management employees from time to time. No
other compensation provided for in this Agreement shall be deemed a substitute
for the Employee's right to participate in such discretionary bonuses when and
as declared by the Board of Directors.
4. (a) Participation in Retirement and Medical Plans. The
Employee shall be entitled to participate in any plan of the
Savings Association relating to pension, profit-sharing, or other
retirement benefits and medical coverage or reimbursement plans
that the Savings Association may adopt for the benefit of its
employees.
(b) Employee Benefits; Expenses. The Employee shall be eligible to
participate in any fringe benefits which may be or may become applicable to the
Savings Association's senior management employees, including by example,
participation in any stock option or incentive plans adopted by the Board of
Directors of Savings Association or Parent, reimbursement for club memberships,
a reasonable expense account, receipt of an appropriate automobile reimbursement
allowance and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this
Agreement. The Savings Association shall reimburse Employee for all reasonable
out-of-pocket expenses which Employee shall incur in connection with his service
for the Savings Association.
5. Term. The term of employment of Employee under this Agreement shall be
for the period commencing on the Effective Date and ending thirty-six (36)
months thereafter ("Term"). Additionally, on, or before, each annual anniversary
date from the Effective Date, the Term of employment under this Agreement shall
be extended for up to an additional one year period beyond the then effective
expiration date upon a determination and resolution of the Board of Directors
that the performance of the Employee has met the requirements and standards of
the Board, and that the Term of such Agreement shall be extended.
6. Loyalty; Noncompetition.
(a) The Employee shall devote his full time and attention to the
performance of his employment under this Agreement. During the term of
Employee's employment under this Agreement, the Employee shall not engage in any
business or activity contrary to the business affairs or interests of the
Savings Association or Parent.
(b) Nothing contained in this Section 6 shall be deemed to prevent or
limit the right of Employee to invest in the capital stock or other securities
of any business dissimilar from that of the Savings Association or Parent, or,
solely as a passive or minority investor, in any business.
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7. Standards. The Employee shall perform his duties under this Agreement in
accordance with such reasonable standards expected of employees with comparable
positions in comparable organizations and as may be established from time to
time by the Board of Directors.
8. Vacation and Sick Leave. At such reasonable times as the Board of
Directors shall in its discretion permit, the Employee shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of his
employment under this Agreement, with all such voluntary absences to count as
vacation time; provided that:
(a) The Employee shall be entitled to annual vacation leave in accordance
with the policies as are periodically established by the Board of Directors for
senior management employees of the Savings Association.
(b) The Employee shall not be entitled to receive any additional
compensation from the Savings Association on account of his failure to take
vacation leave and Employee shall not be entitled to accumulate unused vacation
from one fiscal year to the next, except in either case to the extent authorized
by the Board of Directors for senior management employees of the Savings
Association.
(c) In addition to the aforesaid paid vacations, the Employee shall be
entitled without loss of pay, to absent himself voluntarily from the performance
of his employment with the Savings Association for such additional periods of
time and for such valid and legitimate reasons as the Board of Directors in its
discretion may determine. Further, the Board of Directors shall be entitled to
grant to the Employee a leave or leaves of absence with or without pay at such
time or times and upon such terms and conditions as the Board of Directors in
its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick leave
benefit as established by the Board of Directors for senior management employees
of the Savings Association. In the event that any sick leave benefit shall not
have been used during any year, such leave shall accrue to subsequent years only
to the extent authorized by the Board of Directors for employees of the Savings
Association.
9. Termination and Termination Pay.
The Employee's employment under this Agreement shall be terminated upon
any of the following occurrences:
(a) The death of the Employee during the term of this Agreement, in which
event the Employee's estate shall be entitled to receive the compensation due
the Employee through the last day of the calendar month in which Employee's
death shall have occurred.
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(b) The Board of Directors may terminate the Employee's employment at any
time, but any termination by the Board of Directors other than termination for
Just Cause, shall not prejudice the Employee's right to compensation or other
benefits under the Agreement. The Employee shall have no right to receive
compensation or other benefits for any period after termination for Just Cause.
Termination for "Just Cause" shall include termination because of the Employee's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material breach of any
provision of the Agreement.
(c) Except as provided pursuant to Section 12 herein, in the event
Employee's employment under this Agreement is terminated by the Board of
Directors without Just Cause, the Association shall be obligated to continue to
pay the Employee the salary provided pursuant to Section 2 herein, up to the
date of termination of the Term (including any renewal term) of this Agreement
and the cost of Employee obtaining all health, life, disability, and other
benefits which the Employee would be eligible to participate in through such
date based upon the benefit levels substantially equal to those being provided
Employee at the date of termination of employment. Notwithstanding the
foregoing, in no event shall the Employee receive payment of his salary in
accordance with Section 2 herein and the cost of applicable benefits for a
period of less than twelve months from the date of termination of employment
without Just Cause.
(d) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Savings Association's affairs by an order
issued under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act
("FDIA") (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Savings
Association under this Agreement shall terminate, as of the effective date of
the order, but the vested rights of the parties shall not be affected.
(e) If the Savings Association is in default (as defined in Section
3(x)(1) of FDIA) all obligations under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested rights of the
contracting parties.
(f) All obligations under this Agreement shall be terminated, except to
the extent determined that continuation of this Agreement is necessary for the
continued operation of the Savings Association: (i) by the Director of the
Office of Thrift Supervision ("Director of OTS"), or his or her designee, at the
time that the Federal Deposit Insurance Corporation ("FDIC") or the Resolution
Trust Corporation enters into an agreement to provide assistance to or on behalf
of the Savings Association under the authority contained in Section 13(c) of
FDIA; or (ii) by the Director of the OTS, or his or her designee, at the time
that the Director of the OTS, or his or her designee approves a supervisory
merger to resolve problems related to operation of the Savings
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Association or when the Savings Association is determined by the Director of the
OTS to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(g) The voluntary termination by the Employee during the term of this
Agreement with the delivery of no less than 60 days written notice to the Board
of Directors, other than pursuant to Section 12(b), in which case the Employee
shall be entitled to receive only the compensation, vested rights, and all
employee benefits up to the date of such termination.
(h) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ss.1828(k) and any regulations
promulgated thereunder.
10. Suspension of Employment . If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Savings
Association's affairs by a notice served under Section 8(e)(3) or (g)(1) of the
FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), the Savings Association's obligations
under the Agreement shall be suspended as of the date of service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the
Savings Association may in its discretion (i) pay the Employee all or part of
the compensation withheld while its contract obligations were suspended and (ii)
reinstate any of its obligations which were suspended.
11. Disability. If the Employee shall become disabled or incapacitated to
the extent that he is unable to perform his duties hereunder, by reason of
medically determinable physical or mental impairment, as determined by a doctor
engaged by the Board of Directors, Employee shall nevertheless continue to
receive the compensation and benefits provided under the terms of this Agreement
as follows: 100% of such compensation and benefits for a period of 12 months,
but not exceeding the remaining term of the Agreement, and 66.67% thereafter for
the remainder of the term of the Agreement. Such benefits noted herein shall be
reduced by any benefits otherwise provided to the Employee during such period
under the provisions of disability insurance coverage in effect for Savings
Association employees. Thereafter, Employee shall be eligible to receive
benefits provided by the Savings Association under the provisions of disability
insurance coverage in effect for Savings Association employees. Upon returning
to active full-time employment, the Employee's full compensation as set forth in
this Agreement shall be reinstated as of the date of commencement of such
activities. In the event that the Employee returns to active employment on other
than a full-time basis, then his compensation (as set forth in Section 2 of this
Agreement) shall be reduced in proportion to the time spent in said employment,
or as shall otherwise be agreed to by the parties.
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12. Change in Control.
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment during the Term of this
Agreement following any change in control of the Savings Association or Parent,
absent Just Cause, Employee shall be paid an amount equal to the product of 2.99
times the Employee's "base amount" as defined in Section 280G(b)(3) of the
Internal Revenue Code of 1986, as amended (the "Code") and regulations
promulgated thereunder. Said sum shall be paid, at the option of Employee,
either in one (1) lump sum within thirty (30) days of such termination
discounted to the present value of such payment using as the discount rate the
"prime rate" as published in the Wall Street Journal Eastern Edition as of the
date of such payment minus 100 basis points, or in periodic payments over the
next 36 months or the remaining term of this Agreement whichever is less, as if
Employee's employment had not been terminated, and such payments shall be in
lieu of any other future payments which the Employee would be otherwise entitled
to receive under Section 9 of this Agreement. Notwithstanding the forgoing, all
sums payable hereunder shall be reduced in such manner and to such extent so
that no such payments made hereunder when aggregated with all other payments to
be made to the Employee by the Savings Association or the Parent shall be deemed
an "excess parachute payment" in accordance with Section 280G of the Code and be
subject to the excise tax provided at Section 4999(a) of the Code. The term
"control" shall refer to the ownership, holding or power to vote more than 25%
of the Parent's or Savings Association's voting stock, the control of the
election of a majority of the Parent's or Savings Association's directors, or
the exercise of a controlling influence over the management or policies of the
Parent or Savings Association by any person or by persons acting as a group
within the meaning of Section 13(d) of the Securities Exchange Act of 1934. The
term "person" means an individual other than the Employee, or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary,
Employee may voluntarily terminate his employment during the Term of this
Agreement following a change in control of the Savings Association or Parent,
and Employee shall thereupon be entitled to receive the payment described in
Section 12(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Savings
Association or Parent, Employee would be required to report to a person or
persons other than the Board of the Savings Association or Parent;
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(iii) if the Savings Association or Parent should fail to maintain Employee's
base compensation in effect as of the date of the Change in Control and the
existing employee benefits plans, including material fringe benefit, stock
option and retirement plans, except to the extent that such reduction in benefit
programs is part of an overall adjustment in benefits for all employees of the
Savings Association or Parent and does not disproportionately adversely impact
the Employee; (iv) if Employee would be assigned duties and responsibilities
other than those normally associated with his position as referenced at Section
1, herein; (v) if Employee would not be elected or reelected to the Board of
Directors of the Savings Association; or (vi) if Employee's responsibilities or
authority have in any way been materially diminished or reduced.
13. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Savings Association or Parent which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Savings
Association or Parent.
(b) Since the Savings Association is contracting for the unique and
personal skills of the Employee, the Employee shall be precluded from assigning
or delegating his rights or duties hereunder without first obtaining the written
consent of the Savings Association.
14. Amendments. No amendments or additions to this Agreement
shall be binding upon the parties hereto unless made in writing and
signed by both parties, except as herein otherwise specifically
provided.
15. Applicable Law. This agreement shall be governed by all
respects whether as to validity, construction, capacity,
performance or otherwise, by the laws of the State of West
Virginia, except to the extent that Federal law shall be deemed to
apply.
16. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the
other provisions hereof.
17. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled
by arbitration in accordance with the rules then in effect of the
district office of the American Arbitration Association ("AAA")
nearest to the home office of the Savings Association, and judgment
upon the award rendered may be entered in any court having
jurisdiction thereof, except to the extend that the parties may
otherwise reach a mutual settlement of such issue. The Savings
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Association shall reimburse Employee for all reasonable costs and expenses,
including reasonable attorneys' fees, arising from such dispute, proceedings or
actions, following the delivery of the decision of the arbitrator finding in
favor of the Employee. Further, the settlement of the dispute to be approved by
the Board of the Savings Association or the Parent may include a provision for
the reimbursement by the Savings Association or Parent to the Employee for all
reasonable costs and expenses, including reasonable attorneys' fees, arising
from such dispute, proceedings or actions, or the Board of the Savings
Association or the Parent may authorize such reimbursement of such reasonable
costs and expenses by separate action upon a written action and determination of
the Board following settlement of the dispute.
18. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and first hereinabove written.
First Federal Savings and Loan
Association of Sistersville
ATTEST: By:
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Secretary
WITNESS:
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Xxxxxxx X. Xxxxx, Employee
