EMPLOYMENT AGREEMENT
AGREEMENT effective as of the date of execution, by and
between NORTH CINCINNATI SAVINGS BANK, INC., an Ohio corporation (hereinafter
referred to as the "Company"), and MICHAEL W. KELLEY (hereinafter referred to
as "Employee")
WITNESSETH:
WHEREAS, Employee is presently employed by the Company as a
senior executive; and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes the Employee's contribution to the Company's business during the
past 24 months, and
WHEREAS, Employee is willing to commit himself to continue to
serve the Company, on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and
Employee wish to enter into this Employment Agreement on the terms and
conditions set forth below.
THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the Company and Employee agree as follows:
1. Employment. The Company does hereby agree to employ
Employee, subject to the terms and conditions hereinafter contained, as its
Senior Management Executive, and Employee hereby agrees to serve the Company
as its Senior Management Executive, upon the terms and conditions herein
contained; provided, however, that the Company may appoint Employee to any
other executive management position without affecting the terms of this
Agreement.
2. Term. The term of this Agreement (the "Term") shall
commence on the date hereof and shall terminate on December 31, 1999 unless
said agreement is sooner terminated as hereinafter provided.
3. Employee Responsibilities.
(a) Employee agrees during the term of his employment
hereunder to use his best efforts, skills and abilities to promote the
Company's business and interests and to perform such duties consistent with
the position or positions to which he is appointed as may be assigned to him
by the Board or its Executive Committee. Employee shall maintain
communication with the Board of the Company concerning his areas of
responsibility and shall supply the Board with the written reports, business
plans, budgets, forecasts and other studies concerning the business of the
Company as he shall prepare from time to time during his employment by the
Company hereunder, which reports, plans, budgets, forecasts and other studies
shall be implemented only with the approval of the Board of its Executive
Committee.
(b) Employee agrees to abide by any and all reasonable
rules and regulations governing the transaction of business as the Board may
from time to time adopt or approve.
(c) Employee agrees that if elected as a member of the
Board or any committee thereof or as an officer or member of the Board of
Directors of any subsidiary or affiliate of the Company, Employee shall serve
in such capacities without any compensation in addition to that provided to
Employee in this Agreement.
4. Compensation. The Company shall pay Employee, and
Employee shall accept from the Company, in full payment for any and all
services rendered by him hereunder, including, without limitation, all
services as an officer or director or both of the Company and/or its
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subsidiaries or affiliates, a salary at an annual rate of $75,000 payable
monthly (unless otherwise agreed) subject to increase at the sole discretion
of the Board of Directors.
5. Fringe Benefits
(a) Vacation. Commencing on January 1, 1997, in any
calendar year term hereof, Employee shall be entitled to paid vacation of an
aggregate of three weeks (fifteen business days) to be taken at such time or
times and for such duration as is consistent with the performance of his
duties hereunder. Should Employee, subject to the approval of the Board not
take any of said vacation days during any such calendar year, the Company
shall pay Employee for each vacation day not taken an amount equal to
Employee's annual salary at such time divided by 250 days.
(b) Other Benefits. Employee shall be entitled to the
following additional benefits:
(i) Health Insurance for Employee and his family;
(ii) Life Insurance in the amount of not less than
$100,000.00, payable to such beneficiary(ies) as are designated by Employee
from time to time.
(iii) All federally recognized holidays and bank
holidays; and
(iv) A disability policy to cover Employee for
income lost in the event of disability.
All other so-called "fringe benefits" in the nature of pension
plans, profit sharing plans, stock options, and the like, which may be
provided by the Company for its management level employees during the term of
employment, will be extended to Employee on a basis comparable to that
provided for other management level employees.
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6. Termination. Employee's rights under this Employment
agreement shall continue during the Term hereof. The Term shall expire as
set forth in Paragraph 2 hereof or on the date: (i) Employee dies; (ii)
Employee and the Company agree to the termination of Employee's employment
hereunder; (iii) Employee is dismissed for cause, as defined in Paragraph 9
hereof; (iv) the Company determines that Employee has become disabled, as
provided in Paragraph 10 hereof. Employee covenants and agrees to deliver at
the termination date all resignations requested by the Board.
7. Continuation of Medical Benefits After Termination. As
the expiration of the Term, if Employee ceases to be an employee of the
Company, the Company shall provide Employee and Employee's family the same
rights to continue coverage under the Company's medical, health and
hospitalization plans which Employee would have under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), if the
Company has over twenty-five employees and were required to offer
continuation coverage by COBRA provided such coverage can be obtained by
Company.
8. Termination After Change In Control.
(a) Notwithstanding anything to the contrary herein,
after a Change in Control of the Company (as defined in subparagraph (c)
hereof), the Company shall have the right any time, at its sole option, to
terminate Employee's employment hereunder without cause upon thirty (30)
days' prior written notice; provided, however, that if Employee's employment
is terminated pursuant to this Paragraph 8, the Company shall pay Employee,
and Employee shall accept in full satisfaction of the Company's obligation
under this Agreement (except for the Company's obligations under Paragraph 7
hereof), an amount equal to the greater of Employee's aggregate
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compensation hereunder which Employee would have been paid hereunder if
Employee had continued to be employed by the Company through the later of (i)
December 31, 1999, or (ii) twelve months after the date Employee's employment
is terminated. Employee hereby acknowledges that as a condition to his right
to receive the payments provided for in this Paragraph 8 he will be required
to, and Employee hereby agrees that he will, execute and deliver to the
Company all resignations requested by the Company and a form of release and
any other documents reasonably requested by the Company to acknowledge full
satisfaction by Employee of the Company's obligations under this Agreement.
(b) At any time within six (6) months following a Change
in Control of the Company, Employee may resign from the Company for good
reason in which event the Employee shall be entitled to receive severance
benefits specified in Paragraphs 7 and 8(a). For purposes of this Agreement
the Employee shall have good reason to resign under the following
circumstances; (i) the Company without Employee's prior written consent shall
have changed or attempted to change in any significant respect the authority,
duties, compensation, benefits, work location or other terms or conditions of
employees employment or; (ii) Employee shall have determined in good faith in
his sole and absolute discretion that he is unable to work harmoniously and
effectively with the new management at the Company and that he is otherwise
unable effectively to carry out his duties and discharge his responsibilities
to the bank and his corporation.
(c) For the purposes of this Agreement, a "change in
control of the Company" shall mean any of the following;
(i) a change in control of the Company of the kind
that would be required to be reported in response to Item 1 of Form 8-K
promulgated by the Securities and
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Exchange Commission ("SEC") under the Securities Action of 1934, and as in
effect on the date hereof;
(ii) Any person or group of persons acting in
concert, shall have acquired, directly or indirectly, beneficial ownership
(as defined in Rule 13d-3(a) of the SEC) of twenty percent (20%) or more of
the voting power of the Company's then outstanding shares other than
beneficial ownership by the Employee, by any employee benefit plan of the
Company or by any person or entity organized, appointed, or established
pursuant to the terms of any such benefit plan;
(iii) The Company approves an agreement to merge
or to consolidate with, or to allow substantially all of its assets to be
purchased by, another person or entity and as a result of such merger,
consolidation, or sale of assets, less than a majority of the outstanding
voting stock of the surviving, resulting or purchasing corporation is owned,
immediately after the transaction, by the holders of the voting stock of the
Company outstanding immediately before the transaction; or
9. Termination for Cause
(a) Notwithstanding anything contained herein to the
contrary, the Company shall have the right, on three days' notice, to
terminate Employee's employment hereunder for cause, as such term is defined
in subparagraph (b) of this Paragraph 9.
(b) For the purpose of this Paragraph 9, the term
"cause" means (i) the continued failure by Employee to substantially perform
his duties hereunder (other than any such failure resulting from Employee's
disability as determined in accordance with Paragraph 10 hereof) after demand
for substantial performance has been delivered by the Company; (ii) fraud,
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misappropriation, embezzlement, intentional and material damage to important
or material property of the Company of Employee; (iii) material breach by
Employee of any of the provisions set out in Paragraphs 3(a), 3(b), 11 and 12
of this Agreement; or (iv) the conviction of Employee in a Court of law of
for acts constituting a felony under the laws of the United States or of any
state thereof.
10. Disability
(a) If, during the term of this Agreement, Employee
contracts an illness or other injury which prevents performance by him or his
duties as described herein for a consecutive period of three (3) months or
more, then the Company, at its option, may at any time thereafter terminate
this Agreement by serving thirty (30) days' prior written notice thereof on
Employee. Employee's rights under this Agreement shall terminate and come to
an end upon the date set forth in said notice as if such date were the
termination date of this agreement. If prior to the date specified in such
notice, Employee's illness or incapacity shall have been terminated and he is
physically and mentally able to perform his duties on a full-time basis, he
shall be entitled to resume employment hereunder as though such notice had
not been given.
(b) During any period of disability and prior to the
termination of this agreement as in this Paragraph 10 provided, Employee
shall continue to be paid in full by the Company in accordance with the
provisions of paragraph 4 of this agreement, except that the Company shall
deduct from Employee's compensation as therein provided an amount equal to
any disability insurance payments received by Employee for such period
pursuant to disability insurance policies paid for and maintained by the
Company for the benefit of Employee.
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(c) If there should be any dispute between the parties
as to the Employee's physical or mental disability at any time, such question
shall be settled by the majority opinion of three impartial reputable
physicians, one of whom shall be selected by the Company, another by the
Employee, and third by the two physicians selected by the Company and the
Employee. The certificate of two such physicians as to the matter in dispute
shall be final and binding on the parties.
11. Outside Business Activities and No-Competition. During
Employee's employment hereunder, Employee, without the prior authorization of
the Board of Directors of the Company, shall not invest, directly or
indirectly, in any corporation, partnership, sole proprietorship or other
entity which supplies goods or services to the Company or to any of the
Company's subsidiaries or affiliates, nor shall Employee knowingly, directly
or indirectly, individually or as an employee, partner, stockholder,
director, officer or investor (whether by way of debt or equity investment)
of, or in any partnership, corporation, firm association, enterprise or other
entity, engage, or any business competitive with the Company, except that
Employee may invest in any publicly held corporation whose stock is listed on
a national stock exchange or is regularly traded in the over-the-county
market, provided that such investment and the investment of Employee's wife
and Employee's children, during their respective minorities, shall not exceed
in the aggregate five percent (5%) of the issued and outstanding capital
stock of such corporation and further provided that Employee's wife's and
Employee's minor children's only relationship with or to any such corporation
is that a stockholder. Nothing herein contained shall be deemed to preclude
Employee from managing his personal affairs and investments, provided it does
not interfere with the full performance of his duties hereunder.
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12. Confidentiality. Employee will not at any time either
during the term of this Agreement or thereafter, except as authorized by the
Company, divulge, furnish or make accessible to any person, firm, corporation
or other entity any such confidential and sensitive information and any other
information not otherwise publicly available which he presently possesses or
which he may obtain during the course of his employment with respect to the
business, products, customers, and affairs of the Company and/or any
subsidiary or affiliate of the Company or trade secrets, developments,
know-how methods or other information and data pertaining to practices,
processes, equipment, products, developments or business or any confidential
or secret aspect of the business of the Company and/or any subsidiary or
affiliate of the Company and that all such matters and information shall be
kept strictly and absolutely confidential. Employee, upon the termination of
his employment, irrespective of the time, manner or cause of termination will
surrender and deliver to the Company all lists, books, records and data of
every kind relating to or in connection with the customers, suppliers,
products and business of the Company and/or any subsidiary or affiliate of
the Company and all property belonging to the Company and/or any subsidiary
or affiliate of the Company which are in his possession or under his control.
13. Irreparable Injury. Employee acknowledges that this
compliance with his duties and obligations under Paragraphs 11 and 12 is
necessary to protect the goodwill and other proprietary interests of the
Company and the purposes and essence of this Agreement. Employee
acknowledges that a breach of his duties and obligations under Paragraph 11
or 12 will result in irreparable and continuing damage to the Company and
agrees that, in the event of any breach of
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any of the aforesaid duties and obligations, the Company and its successors
and assigns shall be entitled to an injunction, damages and such other and
further relief as may be proper.
14. Assignability. Employee recognizes that this Agreement
is personal to Employee and none of Employee's obligation under this
agreement may be assigned or delegated by him. The Company may assign all of
its rights and obligations hereunder by operation of law or upon the sale of
all or substantially all of its assets and business, and it shall be a
condition or any such assignment that the purchaser agree to assume all
obligations hereunder to any affiliated company controlled by or under common
control with the Company.
15. Successors to the Company. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, including, without limitation, any
corporation or corporations acquiring directly or indirectly all or
substantially all of the assets of the Company whether by merger,
consolidation, sale or otherwise and such successor shall thereafter be
deemed "the Company" for the purposes of this Agreement.
16. Prior Agreement. This Agreement supersedes and replaces
any existing Employment Agreement by and between the Company and Employee.
17. Miscellaneous. This agreement constitutes the whole
agreement among the parties and shall be construed in accordance with the
laws of the State of Ohio. No variation hereof shall be deemed valid except
as in writing and signed by the parties hereto and no discharge of the terms
hereof shall be deemed valid unless by full performance by the parties hereto
or by a writing signed by the parties hereto. No waiver by the Company or
Employee of any breach by Employee or the Company of any provisions or
condition of this Agreement by him
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or it to be performed shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or any prior or any subsequent time. In
the event any provision of this Agreement shall be deemed to be invalid or
void under any applicable law, the remaining provisions hereof shall not be
affected thereby and shall continue in full force and effect.
18. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given when
delivered personally, or delivered to a United States post office,
first-class postage prepaid, or given by prepaid telegram as follows (or to
such changed address of which notice shall be given in the manner herein
provided):
To Employee: Michael W. Kelley
7606 Carriage Lane
Cincinnati, Ohio 45242
To Company: North Cincinnati Savings Bank, Inc.
9477 Kenwood Road
Blue Ash, Ohio 45242
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its officer thereunto duly authorized and Employee has
hereunto set his hand as of this 12th day of May, 1997.
NORTH CINCINNATI SAVINGS BANK, INC.
ATTEST:
/s/ Eileen M. Davis /s/ Robert J. Novak
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/s/ Michael W. Kelley
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Michael W. Kelley
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