EMPLOYMENT AGREEMENTS
The Association is proposing to enter into employment agreements with
the following named executive officers. The proposed agreements are
substantially similar.
Name Title
----------------- --------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ Vice President of Operations and Financial Services
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Vice President of Mortgage Loans and Corporate Secretary
▇▇▇▇▇ ▇. ▇▇▇▇ Treasurer
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this
___ day of __________, 1997, by and between Peoples Federal Savings and Loan
Association of ▇▇▇▇▇▇ (hereinafter referred to as the "Association" whether in
mutual or stock form), and _______________________ ("Employee").
WHEREAS, the Employee is currently serving as _________________________ of
the Association; and
WHEREAS, the Association has adopted a plan of conversion whereby the
Association will convert to capital stock form as the subsidiary of
Peoples-▇▇▇▇▇▇ Financial Corporation (the "Holding Company"), subject to the
approval of the Association's members and the Office of Thrift Supervision (the
"Conversion"); and
WHEREAS, the board of directors of the Association ("Board of Directors")
recognizes that, as is the case with publicly held corporations generally, the
possibility of a change in control of the Holding Company and/or the Association
may exist and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of key
management personnel to the detriment of the Association, the Holding Company
and their respective stockholders; and
WHEREAS, the Board of Directors believes it is in the best interests of the
Association to enter into this Agreement with the Employee in order to assure
continuity of management of the Association and to reinforce and encourage the
continued attention and dedication of the Employee to the Employee's assigned
duties without distraction in the face of potentially disruptive circumstances
arising from the possibility of a change in control of the Holding Company or
the Association, although no such change is now contemplated; and
WHEREAS, the Board of Directors has approved and authorized the execution
of this Agreement with the Employee to take effect as stated in Section 2
hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Definitions.
(a) The term "Change in Control" means the occurrence of any of the
following events: (1) an event of a nature that (i) is a change in control
of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and 12 C.F.R. Part 574 as in effect on the date
hereof; or (ii) would be required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the date hereof, pursuant
to Section 13 or 15(d) of the Securities Exchange Act of ▇▇▇▇ (▇▇▇
"▇▇▇▇▇▇▇▇ ▇▇▇"); (2) any person (as the term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly of securities
of the Association or the Holding Company representing 20% or more of the
Association's or the Holding Company's outstanding securities; (3)
individuals who are members of the board of
directors of the Association or the Holding Company on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by the Holding Company's stockholders was approved
by the nominating committee serving under an Incumbent Board, shall be
considered a member of the Incumbent Board; or (4) a reorganization,
merger, consolidation, sale of all or substantially all of the assets of
the Association or the Holding Company or a similar transaction in which
the Association or the Holding Company is not the resulting entity. The
term "Change in Control" shall not include an acquisition of securities by
an employee benefit plan of the Association or the Holding Company or the
acquisition of securities of the Association by the Holding Company in
connection with the Conversion.
(b) The term "Commencement Date" means the date of completion of the
Conversion.
(c) The term "Date of Termination" means the earlier of (1) the date
upon which the Association gives notice to the Employee of the termination
of the Employee's employment with the Association or (2) the date upon
which the Employee ceases to serve as an employee of the Association.
(d) The term "Involuntarily Termination" means termination of the
employment of Employee without the Employee's express written consent, and
shall include a material diminution of or interference with the Employee's
duties, responsibilities and benefits as _________________________________
of the Association, including (without limitation) any of the following
actions unless consented to in writing by the Employee: (1) a change in the
principal workplace of the Employee to a location outside of a 30 mile
radius from the Association's headquarters office as of the date hereof;
(2) a material demotion of the Employee; (3) a material reduction in the
number or seniority of other Association personnel reporting to the
Employee or a material reduction in the frequency with which, or in the
nature of the matters with respect to which, such personnel are to report
to the Employee, other than as part of a Association- or Holding
Company-wide reduction in staff; (4) a material adverse change in the
Employee's salary, perquisites, benefits, contingent benefits or vacation,
other than as part of an overall program applied uniformly and with
equitable effect to all members of the senior management of the Association
or the Holding Company; and (5) a material permanent increase in the
required hours of work or the workload of the Employee. The term
"Involuntary Termination" does not include Termination for Cause or
termination of employment due to retirement, death, disability or
suspension or temporary or permanent prohibition from participation in the
conduct of the Association's affairs under Section 8 of the Federal Deposit
Insurance Act ("FDIA").
(e) The terms "Termination for Cause" and "Terminated for Cause" mean
termination of the employment of the Employee because of the Employee's
personal dishonesty, incompetence, willful misconduct, breach of a
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 this Agreement. The Employee
shall not be deemed to have been Terminated
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for Cause unless and until there shall have been delivered to the Employee
a copy of a resolution, duly adopted by the affirmative vote of not less
than a majority of the entire membership of the Board of Directors at a
meeting of the Board called and held for such purpose (after reasonable
notice to the Employee and an opportunity for the Employee, together with
the Employee's counsel, to be heard before the Board), stating that in the
good faith opinion of the Board the Employee has engaged in conduct
described in the preceding sentence and specifying the particulars thereof
in detail.
2. Term. The term of this Agreement shall be a period of one year
commencing on the Commencement Date, subject to earlier termination as provided
herein. Beginning on the first anniversary of the Commencement Date, and on each
anniversary thereafter, the term of this Agreement shall be extended for a
period of one year in addition to the then-remaining term, provided that (1) the
Association has not given notice to the Employee in writing at least 90 days
prior to such anniversary that the term of this Agreement shall not be extended
further; and (2) prior to such anniversary, the Board of Directors of the
Association explicitly reviews and approves the extension. Reference herein to
the term of this Agreement shall refer to both such initial term and such
extended terms.
3. Employment. The Employee is employed as ___________________________ of
the Association. As such, the Employee shall render administrative and
management services as are customarily performed by persons situated in similar
executive capacities, and shall have such other powers and duties of an officer
of the Association as the Board of Directors may prescribe from time to time.
4. Compensation.
(a) Salary. The Association agrees to pay the Employee during the term
of this Agreement an annual salary of $50,000. The amount of the Employee's
salary shall be reviewed by the Board of Directors, beginning not later
than the first anniversary of the Commencement Date. Adjustments in salary
or other compensation shall not limit or reduce any other obligation of the
Association under this Agreement. The Employee's salary in effect from time
to time during the term of this Agreement shall not thereafter be reduced.
(b) Discretionary Bonuses. The Employee shall be entitled to
participate in an equitable manner with all other executive officers of the
Association in discretionary bonuses as authorized and declared by the
Board of Directors to its executive employees. No other compensation
provided for in this Agreement shall be deemed a substitute for the
Employee's right to participate in such bonuses when and as declared by the
Board of Directors.
(c) Expenses. The Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in
performing services under this Agreement in accordance with the policies
and procedures applicable to the executive officers of the Association,
provided that the Employee accounts for such expenses as required under
such policies and procedures.
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5. Benefits.
(a) Participation in Retirement and Employee Benefit Plans. The
Employee shall be entitled to participate in all plans relating to pension,
thrift, profit-sharing, group life insurance, medical and dental coverage,
education, cash bonuses, and other retirement or employee benefits or
combinations thereof, in which the Association's executive officers
participate.
(b) Fringe Benefits. The Employee shall be eligible to participate in,
and receive benefits under, any fringe benefit plans which are or may
become applicable to the Association's executive officers.
6. Vacations; Leave. The Employee shall be entitled to annual paid vacation
in accordance with the policies established by the Association's Board of
Directors for executive officers and for voluntary leave of absence, with or
without pay, from time to time at such times and upon such conditions as the
Board of Directors may determine in its discretion.
7. Termination of Employment.
(a) Involuntary Termination. The Board of Directors may terminate the
Employee's employment at any time, but, except in the case of Termination
for Cause, termination of employment shall not prejudice the Employee's
right to compensation or other benefits under this Agreement. In the event
of Involuntary Termination other than in connection with or within 12
months after a Change in Control, (1) the Association shall pay to the
Employee, during the remaining term of this Agreement following the Date of
Termination, the Employee's salary at the rate in effect immediately prior
to the Date of Termination, payable in such manner and at such times as
such salary would have been payable to the Employee under Section 4(a) if
the Employee had continued to be employed by the Association, and (2) the
Association shall provide to the Employee, during the remaining term of
this Agreement following the Date of Termination, health benefits as
maintained by the Association for the benefit of its executive officers
from time to time during the remaining term of the Agreement or
substantially the same health benefits as the Association maintained for
its executive officers immediately prior to the Date of Termination.
(b) Termination for Cause. In the event of Termination for Cause, the
Association shall pay the Employee the Employee's salary through the Date
of Termination, and the Association shall have no further obligation to the
Employee under this Agreement.
(c) Voluntary Termination. The Employee's employment may be
voluntarily terminated by the Employee at any time upon 90 days' written
notice to the Association or such shorter period as may be agreed upon
between the Employee and the Board of Directors of the Association. In the
event of such voluntary termination, the Association shall be obligated to
continue to pay to the Employee the Employee's salary and benefits only
through the Date of Termination, at the time such payments are due, and the
Association shall have no further obligation to the Employee under this
Agreement.
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(d) Change in Control. In the event of Involuntary Termination in
connection with or within 12 months after a Change in Control which occurs
at any time while the Employee is employed under this Agreement, the
Association shall, subject to Section 8 of this Agreement, (1) pay to the
Employee in a lump sum in cash within 25 business days after the Date of
Termination an amount equal to 100% of the Employee's "base amount" as
defined in Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"); and (2) provide to the Employee, during the remaining term of
this Agreement following the Date of Termination, such health benefits as
are maintained for executive officers of the Association from time to time
during the remaining term of this Agreement or substantially the same
health benefits as the Association maintained for its executive officers
immediately prior to the Date of Termination.
(e) Death; Disability. In the event of the death of the Employee while
employed under this Agreement and prior to any termination of employment,
the Employee's estate, or such person as the Employee may have previously
designated in writing, shall be entitled to receive from the Association
the salary of the Employee through the last day of the calendar month in
which the Employee died. If the Employee becomes disabled as defined in the
Association's then current disability plan, if any, or if the Employee is
otherwise unable to serve as ________________________________, the Employee
shall be entitled to receive group and other disability income benefits of
the type, if any, then provided by the Association for executive officers.
(f) Temporary Suspension or Prohibition. If the Employee is suspended
and/or temporarily prohibited from participating in the conduct of the
Association's affairs by a notice served under Section 8(e)(3) or (g)(1) of
the FDIA, 12 U.S.C. Section 1818(e)(3) and (g)(1), the Association's
obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Association may in its discretion (i) pay the
Employee all or part of the compensation withheld while its obligations
under this Agreement were suspended and (ii) reinstate in whole or in part
any of its obligations which were suspended.
(g) Permanent Suspension or Prohibition. If the Employee is removed
and/or permanently prohibited from participating in the conduct of the
Association's affairs by an order issued under Section 8(e)(4) or (g)(1) of
the FDIA, 12 U.S.C. Section 1818(e)(4) and (g)(1), all obligations of the
Association under this Agreement shall terminate as of the effective date
of the order, but vested rights of the contracting parties shall not be
affected.
(h) Default of the Association. If the Association 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, but this provision
shall not affect any vested rights of the contracting parties.
(i) Termination by Regulators. 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 Association:
(1) by the Director of the Office of Thrift Supervision (the "Director") or
his or her designee, at the time the Federal Deposit Insurance Corporation
enters into an agreement to provide assistance to or on behalf of the
Association under the authority contained in Section 13(c) of the FDIA; or
(2) by the Director or his or her
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designee, at the time the Director or his or her designee approves a
supervisory merger to resolve problems related to operation of the
Association or when the Association is determined by the Director to be in
an unsafe or unsound condition. Any rights of the parties that have already
vested, however, shall not be affected by any such action.
8. Certain Reduction of Payments by the Association.
(a) Notwithstanding any other provision of this Agreement, if the
value and amounts of benefits under this Agreement, together with any other
amounts and the value of benefits received or to be received by the
Employee in connection with a Change in Control would cause any amount to
be nondeductible by the Association or the Holding Company for federal
income tax purposes pursuant to Section 280G of the Code, then amounts and
benefits under this Agreement shall be reduced (not less than zero) to the
extent necessary so as to maximize amounts and the value of benefits to the
Employee without causing any amount to become nondeductible by the
Association or the Holding Company pursuant to or by reason of such Section
280G. The Employee shall determine the allocation of such reduction among
payments and benefits to the Employee.
(b) 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 any regulations promulgated thereunder.
9. No Mitigation. The Employee shall not be required to mitigate the amount
of any salary or other payment or benefit provided for in this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Agreement be reduced by any compensation earned by
the Employee as the result of employment by another employer, by retirement
benefits after the Date of Termination or otherwise.
10. Attorneys Fees. In the event the Association exercises its right of
Termination for Cause, but it is determined by a court of competent jurisdiction
or by an arbitrator pursuant to Section 17 that cause did not exist for such
termination, or if in any event it is determined by any such court or arbitrator
that the Association has failed to make timely payment of any amounts owed to
the Employee under this Agreement, the Employee shall be entitled to
reimbursement for all reasonable costs, including attorneys' fees, incurred in
challenging such termination or collecting such amounts. Such reimbursement
shall be in addition to all rights to which the Employee is otherwise entitled
under this Agreement.
11. No Assignments.
(a) This Agreement is personal to each of the parties hereto, and
neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Association shall require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Association, by an assumption agreement in form and substance satisfactory
to the Employee, to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Association would be
required to perform it if no such succession or assignment had taken place.
Failure of the Association to obtain such an assumption agreement prior to
the effectiveness of any such succession or assignment shall be a breach of
this Agreement and shall entitle the Employee to
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compensation from the Association in the same amount and on the same terms
as the compensation pursuant to Section 7(d) hereof. For purposes of
implementing the provisions of this Section 11(a), the date on which any
such succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder shall
inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
Employee's devisee, legatee or other designee or if there is no such
designee, to the Employee's estate.
12. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, to the Association at its home
office, to the attention of the Board of Directors with a copy to the Secretary
of the Association, or, if to the Employee, to such home or other address as the
Employee has most recently provided in writing to the Association.
13. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
14. Headings. The headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
15. 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.
16. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Ohio.
17. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
Attest: PEOPLES FEDERAL SAVINGS AND LOAN
ASSOCIATION OF ▇▇▇▇▇▇
--------------------- ---------------------------
Secretary By:
Its:
EMPLOYEE
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