FIFTH THIRD BANCORP
February 10, 1994
Mr. H. David Hale
Chairman & Chief Executive Officer
The Cumberland Federal Bancorporation, Inc.
200 W. Broadway
Louisville, Kentucky
RE: Termination of Employment Agreement
Dear David:
In connection with the signing of the Affiliation Agreement
("Agreement"), you and we hereby agree that Fifth Third shall cause
a subsidiary, such as Fifth Third Bank Kentucky, to pay out your
employment agreement under the terms of the change of control
provision as outlined below. Capitalized terms used herein, unless
otherwise defined herein, have the meanings given to them in the
Agreement.
Contract Pay-Out Terms
Change of Control Payment: Payment to H. David Hale in the
amount of $1,110,089.00 will be paid
by a lump sum payment made at the
Effective Time, reduced to an amount
equal to the difference between 1)
the product of 2.99 times the "base
amount" as defined in Section
280G(b)(3) of the Internal Revenue
Code of 1986, as amended (the
"Code"), and 2) the sum of all other
parachute payments, as defined in
Section 280G(b)(2) of the Code.
Using 120% of the applicable federal
rate in effect for February, 1994,
H. David Hale would receive
$1,076,066 under this Paragraph.
The actual calculation shall be made
at the Effective Time using 120% of
the Applicable Federal Rate then in
effect.
H. David Hale in accepting the
change of control payment described
herein shall continue his employment
as Chairman and CEO of the newly-
formed Fifth Third Kentucky BHC and
as Chairman and CEO of the newly-
formed Fifth Third Bank Kentucky.
His employment will continue under
the Fifth Third standard employment
policy as an at-will employee on the
terms and conditions set forth
below.
- --Salary Benefit: $280,000.00 base salary per year in
at least equal monthly payments.
- --Variable Compensation: H. David Hale shall be given the
opportunity to earn up to an
additional 50% of his base salary
equal to $140,000.00. This variable
compensation shall be based on
performance goals established for
the new operating affiliate, Fifth
Third Bank Kentucky. These goals
will be consistent and commensurate
with other Executive Officers of the
Fifth Third.
- --Rabbi Trust: Cumberland has established a
retirement plan for the benefit of
H. David Hale, P. Norris Shockley,
Jr. and John T. Doyle. The form of
the plan is that of a Rabbi Trust.
Terms of the Rabbi Trust are
acknowledged as written into the
Fourth Amendment to the Employment
Agreement dated 7/1/93, provided
that H. David Hale shall become
immediately fully vested in this
retirement plan at the Effective
Time of the Merger. It is further
acknowledged that this plan may be
subject to an additional
contribution at the termination of
the trust, which anticipated
additional liability does not exceed
$37,000.00 as of February 10, 1994.
- --Automobile: Fifth Third does not have a company
car policy, but will agreed to cover
the lease payments for the
automobile currently being leased
for a period of twelve months or the
term of the remaining lease,
whichever comes first.
- --Key Man Insurance Policy: Cumberland has in force an insurance
policy insuring the life of H. David
Hale with the face value of
$750,000.00 payable at death to the
heirs of H. David Hale. Fifth Third
Bank Kentucky agrees to continue the
annualized premium payments to the
benefit of H. David Hale for the
duration of his employment with
Fifth Third. Fifth Third agrees, at
the request of H. David Hale, to
assign such policy to him upon his
separation from service with Fifth
Third.
- --Health & Hospitalization: Fifth Third Bank Kentucky hereby
agrees to provide the standard
Health and Hospitalization
protection to H. David Hale which
currently is in place for other
Fifth Third Executive Officers.
This protection shall have no pre-
existing condition limitations.
- --Business Club Membership: Fifth Third Bank Kentucky hereby
agrees to pay membership dues on an
annualized basis for the duration of
H. David Hale's employment.
- --Country Club Membership: Fifth Third Bank Kentucky hereby
agrees to pay membership dues on an
annualized basis for the existing
club membership for the benefit of
H. David Hale for the duration of H.
David Hale's employment.
- --Release: At the Effective Time of the Merger,
H. David Hale shall irrevocably and
unconditionally release Cumberland,
Thrift Subsidiary and Fifth Third,
their past and present (i) corporate
parents, subsidiaries and affiliates
and (ii) officers, directors, agents
and employees and all of the
successors and assigns of the
foregoing (hereinafter "Released
Parties') from any and all claims,
known or unknown, which H. David
Hale and his heirs and
representatives may have against the
Released Parties and their agents,
successors and assigns, including
without limitation, any claims under
Federal, state or local law or
regulation. Mr. Hale acknowledges
that this Letter Agreement has been
entered into voluntarily and is in
full satisfaction of any and all
claims he has or may have relating
to or arising out of his employment
with Cumberland or Thrift Subsidiary
and the termination of his
employment agreement; provided,
however that such release shall not
effect the rights of H. David Hale
with respect to certain stock
options granted prior to the date of
this Letter Agreement.
- --Older Workers Benefit
Protection Act: In October, 1990, the Older Workers
Benefit Protection Act ("Act") was
enacted. The Act provides, among
other things, the right of a person
to consider a separation agreement
such as this for a period of 21 days
after it is presented to such
person. At the end of the 21 day
period, and should the person agree
to the separation agreement, the
individual has an additional seven
days within which to revoke
acceptance. H. David Hale has 21
days to consider the offer set forth
in this Letter Agreement. If H.
David Hale accepts this Letter
Agreement, he has an additional
seven days within which to revoke
his acceptance. If H. David Hale
accepts this Letter Agreement, after
the lapse of seven days, this Letter
Agreement will become binding.
If H. David Hale decides not to
accept this Letter Agreement or
accepts this Letter Agreement and
subsequently revokes acceptance
within seven days, the provisions of
this Letter Agreement will be null
and void and deemed to be rescinded.
H. David Hale has consulted with an
attorney of his choice to discuss
this Letter Agreement.
H. David Hale acknowledges that he
fully understands the meaning and
intent of all the terms of this
Letter Agreement, that he has had a
reasonable opportunity to review
this Letter Agreement, that any
obligations of Cumberland, Thrift
Subsidiary or Fifth Third or its
subsidiaries and affiliates to him
are personal in nature and for his
benefit and not for the benefit of
any third party and that no promises
or inducements other than those set
forth herein have been made to him
by such parties.
- --Miscellaneous: This Letter Agreement shall be
governed in all respects, whether as
to validity, construction, capacity,
performance or otherwise, by the
laws of the Commonwealth of
Kentucky.
The provisions of this Letter
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.
This Letter Agreement shall
constitute the entire agreement
between the parties hereto.
Except as required by law, Fifth
Third and Mr. Hale agree that the
terms of this Letter Agreement will
be considered as strictly
confidential and will not be
disclosed by either party hereto,
except Mr. Hale may disclose this
Letter Agreement to his immediate
family and advisors and Fifth Third
may disclose it to its advisors.
Please sign and date below indicating your acceptance of and
agreement to the terms of this letter.
Sincerely,
Robert P. Niehaus
Senior Vice President
Agreed to and Accepted:
______________________________ ______________________________
H. David Hale Date
Chairman & Chief Executive Officer
The Cumberland Federal Bancorporation, Inc.
_____________________________ ______________________________
Witness Date