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 This Employment Agreement involves

CENTRAL FEDERAL CORP | Central Federal Corporation | CF Bank

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Title: EMPLOYMENT AGREEMENT
Date: 8/16/2016
Industry: SandLs/Savings Banks     Sector: Financial

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Exhibit 10.2

EMPLOYMENT AGREEMENT



This Employment Agreement (this “ Agreement ”) is entered into effective the 15 th  day of August, 2016 (the “ Effective Date ”), by and among Central Federal Corporation (the “ Corporation ”), its wholly-owned subsidiary, CF Bank (the “ Bank ”, collectively with the Corporation referred to as the “ Employer ”), and John W. Helmsdoerfer, an individual (the “ Executive ”).

W I T N E S S E T H :

WHEREAS, the Employers desire to employ the Executive and the Executive desires to be employed by the Employers in accordance with the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Employers and the Executive agree as follows:

1.

Employment and Term . The Executive shall serve as the Executive Vice President and Chief Financial Officer of the Bank in accordance with the terms and subject to the conditions of this Agreement from the Effective Date until December 31, 2018 (the “Initial Term”).  Employers’ Board of Directors shall review this Agreement annually commencing in 2017 and determine whether the extension of the Agreement for an additional 12 month period (each a “Renewal Term”) is appropriate in its sole and exclusive discretion.  This Agreement shall be extended for a Renewal Term unless the Employers provide the Executive with written notice of non-renewal not less than 30 days prior to the end of each calendar year beginning after December 31, 2016.  The Initial Term and any Renewal Term are collectively, the “ Term .”



2.

Duties of the Executive .



(a) General Duties and Responsibilities .  The Executive shall perform the duties and responsibilities customary for the Executive’s position to the best of the Executive’s ability and in accordance with the policies established by the Corporation’s Board of Directors (the “ Board ”) and all applicable laws and regulations.  The Executive shall perform such other duties not inconsistent with the Executive’s position as may be assigned from time to time by the Board.

(b) Devotion of Time to the Employers’ Business .  During the Term, the Executive shall devote the Executive’s full business time, ability and attention to the faithful performance of duties under this Agreement, subject to the direction of the Board.  The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any person or organization which competes with the business of the Employers without the prior written consent of the Board; provided, however, that the Executive shall not be precluded from: (i) reasonable participation in community, civic, charitable or similar organizations; (ii) reasonable participation in industry-related activities, including, but not limited to, attending industry trade association (national and state) conventions, conferences and committee meetings and holding positions of responsibility therein; and (iii) the pursuit of personal investments which do not interfere or conflict with the performance of the Executive’s duties for the Employers.

 

3.

Compensation, Benefits and Reimbursements .  During the Executive’s employment by the Employers during theTerm:



(a)

Salary .  The Executive shall receive an annual salary in the amount of $210,000, payable in equal installments not less often than monthly.  At least annually, the Executive’s annual salary shall be reviewed based upon the performance of the Executive and the Employers over the previous year and may be adjusted by the Board or a committee thereof, determined in its discretion, provided that in no event shall the Executive’s annual


 

 

salary be less than $210,000 unless the Executive consents to a lower amount (the initial base salary as adjusted, if applicable, the “ Base Salary ”). 

(b)

Performance Bonus .  The Executive shall be eligible to receive an annual performance bonus (the “Bonus”) contingent upon the satisfaction of performance goals established by the Employers, the Board or a committee thereof from time to time.

 

(c)

Employee Benefit Plans .  The Employers will permit the Executive to participate in all health and life insurance coverages, disability programs, tax-qualified retirement plans, paid holidays, perquisites, and such other benefits of employment as the Employers may provide from time to time to employees of the Employers holding similar positions as the Executive, subject to the terms and conditions of such plans, policies and programs.  Notwithstanding any provision contained in this Agreement, the Employers may discontinue or terminate at any time any employee benefit plan, policy or program, now existing or hereafter adopted, to the extent permitted by the terms of such plan, policy or program and shall not be required to compensate the Executive for such discontinuation or termination.  

4. Termination of Employment

(a)

Compensation Upon Termination .  Except to the extent that the Executive is terminated following a Change in Control as described in Section 4(b), dies or becomes Disabled as described in Section 4(c):

(i)

Upon termination of the Executive’s employment during the Term by the Employers without Cause or by the Executive for Good Reason, subject to the conditions set forth in Section 5, the Bank shall pay to the Executive (or to the Executive’s estate if Executive dies before all severance benefits payable under this Section 4(a)(i) have been paid) (A) an amount equal to one times the Executive’s monthly Base Salary as in effect on the date of such termination payable in equal monthly installments commencing on the first business day of the second month beginning after the Executive’s date of termination (the “ Severance ”) and continuing for the remaining Term, but not less than 12 months and not more than 18 months and (B) the pro rata portion (calculated based on the ratio of the number of days during such bonus performance period that the Executive was employed to the total number of days in the applicable bonus performance period) of any bonus payable to the Executive under the Employers’ incentive compensation plan with respect to the year in which Executive’s employment is terminated, payable when, if and to the extent such bonus otherwise would have been payable had Executive’s employment not been terminated.

 

(ii)

As additional compensation upon termination of Executive’s employment during the Term by the Employers without Cause or by the Executive for Good Reason: 

(A) the Bank shall pay a lump sum payment equal to the difference between the monthly premium cost for COBRA continuation coverage for the medical insurance benefits in effect for the Executive immediately prior to such termination and the monthly premium cost of such coverage for an active employee of the Employers, multiplied by the lesser of 18 months or the number of months of Severance payments under Section 4(a)(i) above; and

(B) all stock options and other equity awards granted by the Corporation to the Executive shall be fully vested and all stock options shall remain exercisable for the full option exercise period that would have applied had the Executive remained employed.

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(b)

Change of Control Benefit .  If the Bank has a Change of Control (as defined in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “ Code ”)), and the Executive’s employment is terminated by the Bank without Cause, or by the Executive for Good Reason, before the second anniversary of the date of such Change of Control, subject to the conditions set forth in Section 5, the Bank shall pay to the Executive a lump sum cash amount equal to 1.5 times the sum of the Executive’s Base Salary and the average bonus paid to the Executive over the prior 24 month period. Such lump sum shall be paid within sixty (60) days following the Executive’s termination, provided that, if the sixty (60) day window would span two years, the payment will be made in the second year.  In addition, all stock options and other equity awards granted by the Corporation to the Executive shall be fully vested as of the date of the Change in Control and such stock options shall remain exercisable for the full option exercise period that would have applied had the Executive remained employed.

(c)

Benefit Upon Death or Disability .  Upon termination of the Executive’s employment during the Term due to the Executive’s death or Disability, the Bank shall pay to the Executive or to the Executive’s estate, as applicable, an amount equal to one times the Executive’s annual Base Salary as in effect on the date of such termination.  Such death or Disability benefit shall be paid in 12 equal monthly installments commencing on the first business day of the second month beginning after the Executive’s date of termination due to death or Disability.  The payments due under this Section 4(c) shall be offset by any benefit or payment provided by the Employers (or on behalf of the Employers) to any beneficiary of the Executive (including Executive’s estate) on account of Executive’s death or Disability, regardless of whether such benefit or payment is insured or self-insured.    In addition, all stock options granted by the Corporation to the Executive shall be fully vested as of the date of termination of Executive’s employment due to death or Disability and shall remain exercisable in accordance with the terms of the Executive’s applicable option award agreement.

 

(d)

No Right to Severance for Any Other Reason .  Except as otherwise provided in Section 4(a), (b) or (c), the Executive shall have no right to the payment of Severance upon termination of the Executive’s employment by the Employers for Cause, by the Executive for any reason or no reason (other than for Good Reason), as a result of the Executive’s death or Disability, or upon expiration of the Term.

(e)

Definitions .  For purposes of this Agreement:

 

(i)

Cause :  The Employers shall have “ Cause ” to terminate the Executive’s  employment upon the occurrence of any of the following events:  (i) willful and continued failure to substantially perform assigned duties; (ii) gross misconduct; (iii) a material breach of any written covenant or of any term of this Agreement or any other agreement with either Employer, as determined by the Audit Committee of the Board; (iv) commission of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with either Employer or any affiliate, or commission of a crime other than a felony which involves a breach of trust or fiduciary duty, in each case whether or not involving either Employer or any affiliate; (v) fraud, disloyalty, dishonesty or willful violation of any applicable law, rule or regulation of either Employer’s or any affiliate’s code of conduct or any other policy of either Employer or any affiliate that applies to the Executive, or (vi) issuance of an order for removal of the Executive by any agency which regulates the activities of either Employer or any affiliate.

(ii)

Disability :  The Executive shall be deemed to be “ Disabled ” if  the Executive suffers from (A) any mental or physical condition with respect to which the Executive qualifies for and receives benefits under a long-term disability plan of

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either Employer or any affiliate, or (B) in the absence of such a long-term disability plan or coverage under such plan, a physical or mental condition which, in the sole discretion of the Board or a committee thereof is reasonably expected to be of indefinite duration and to substantially prevent the Executive from fulfilling the Executive’s duties or responsibilities to the Employers.

 

(iii)

Good Reason:  “Good Reason” shall mean the termination of Executive’s employment by Executive that occurs within ninety (90) days after the initial existence of one or more of the following conditions arising without the consent of Executive:

a.

A material decrease in Executive’s Base Salary as compared to the Base Salary paid during the prior twelve (12) month period without Cause;

 

b.

Employer’s relocation of Executive’s principle office to a location more than twenty-five (25) miles outside of Columbus, Ohio;

c.

Material breach of a provision of this Agreement or of the Corporation’s incentive compensation plan by Employer; or

 

d.

Material diminution in Executive’s duties and responsibilities.

Notwithstanding the foregoing, the Executive shall not have Good Reason to terminate his employment unless he provides written notice to the Employer within sixty (60) days after the initial existence of the applicable condition and the Employer fails to cure such condition within 30 days after their receipt of such notice.

5. Conditions on Receipt of Severance .  The Bank’s obligation to pay Severance pursuant to this Agreement is expressly conditioned upon:

(a)

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