CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS
CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into on
September 16, 2008
("Effective
Date"), by and between CHEVIOT SAVINGS BANK
("Bank") and SCOTT T. SMITH ("Employee").
WHEREAS, the Employee is presently an officer of the Bank;
WHEREAS, the Bank
desires to be ensured of the Employee's continued active
participation in the business of the Bank; and
WHEREAS, in order to
induce the
Employee to remain in the employ of the
Bank and in consideration of the Employee's agreeing to remain in the employ
of
the Bank, the parties
desire to specify the
severance benefits
which shall be
due the Employee in the event that his employment with the Bank is terminated
under specified circumstances;
NOW
THEREFORE, it is agreed as follows:
1. Employment.
Employee is employed
in the capacity as the Chief Financial
Officer of Bank.
Employee will render such administrative and management
services to Bank and Cheviot Financial Corp. ("Parent") as are currently
rendered and as are customarily performed by persons situated in a
similar
executive capacity.
Employee will promote
to the extent
permitted by law
the
business of Bank and Parent Employee's other duties will be such as
the
Board of Directors for
Bank (the "Board of Directors" or "Board") may from
time
to time reasonably
direct, including
normal duties as an
officer of
Bank.
2. Terms of
Agreement.
The term of this Agreement will be for the period
commencing on
the Effective Date and ending thirty-six (36) months
thereafter. On or
before, each annual
anniversary date from the Effective
Date, the term of this Agreement will be extended for 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
Employee has met the
requirements and
standards of the Board, and that
the
term of such Agreement will be extended.
3. Termination
of Employment in
Connection with or
Subsequent to a Change in
Control.
3.1
Involuntary
Termination.
Notwithstanding any
provision herein to the
contrary, in the event
of the involuntary
termination of
Employee's
employment under this Agreement, absent Cause, in connection with,
or
within twelve (12) months after, a Change in Control, Employee will
be
paid an amount
equal to two times the
prior calendar year's cash
compensation paid to
Employee by Bank
(whether said amounts were
received or deferred by Employee). Said sum will be paid in a
single
cash lump sum distribution within thirty (30) days of such
termination
of employment,
and such payments will
be in lieu of any other future
payments which Employee would be otherwise entitled to receive.
<page>
Notwithstanding the
foregoing,
all sums payable
hereunder will 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
Employee by Bank or
the Parent will be
deemed an "excess
parachute
payment" in accordance
with Code Section 280G and be subject to
the
excise tax provided
under Code Section 4999. In the event that a
reduction of payment is necessary, the cash severance payable
pursuant
to Section 3 hereof shall be reduced by the minimum amount necessary
to result in no portion of the payments and benefits payable by the
Bank under Section 3
being non-deductible
to the Bank
pursuant to
Section 280G of the
Code and subject
to excise tax imposed under
Section 4999 of the Code.
"Change in Control" will refer to the ownership, holding or power to
vote more than 25% of the Parent's or Bank's voting stock, the
control
of the election of a majority of the Parent's or Bank's directors,
or
the exercise
of a controlling influence over the management or
policies of the Parent or Bank 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
Employee, or a corporation, partnership, trust, Bank, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or
any other form of entity not specifically listed herein.
3.2
Termination for Good
Reason.
(a)
Notwithstanding any
other provision of this Agreement to the contrary,
in the event of the
Employee's termination
of employment for Good
Reason within twelve
(12) months following
a Change in Control,
the
Employee will be entitled to receive the payments described in
Section
3.1 of this Agreement, within thirty (30) days following such
termination of employment.
(b)
Termination
for "Good Reason"
shall mean termination
by the Employee
following a Change in Control based on the following:
(i) (1) a material diminution in the Employee's base
compensation
as in effect immediately prior to the date of the Change in Control
or
as the same may be
increased from time to time thereafter, (2) a
material
diminution in
the Employee's authority, duties or
responsibilities as in
effect immediately prior to the Change in
Control, or (3) a
material diminution
in the authority, duties or
responsibilities of the officer (as in effect immediately prior to
the
date of the Change in
Control) to whom the
Employee is required to
report,
(ii) any material breach of this Agreement by the Bank, or
(iii) any material change in the geographic location at which
the
Employee must perform his services f
