EMPLOYMENT AGREEMENT
FOR
ROBERT J. KING, JR.
This Employment
Agreement (the “Agreement”) is made this
day of
, 2009 by and between PVF Capital Corp., an Ohio corporation (the
“Company”), its wholly-owned subsidiary, Park View
Federal Savings Bank, a federally chartered stock savings bank (the
“Bank”) (the Company and the Bank shall hereinafter
sometimes be referred to collectively as the
“Employer”), and Robert J. King, Jr.
(“Executive”).
WHEREAS , Executive has agreed to accept employment as
President and Chief Executive Officer of the Company and the
Bank;
WHEREAS , the Company, the Bank and Executive wish to
set forth the terms and conditions of his employment;
NOW,
THEREFORE , in
consideration of the mutual covenants herein contained, and upon
the other terms and conditions hereinafter provided, the parties
hereby agree as follows:
1.
POSITION AND RESPONSIBILITIES
During the term
of this Agreement, Executive agrees to serve as President and Chief
Executive Officer of the Company and the Bank, and will perform all
duties and will have all powers associated with such positions as
and as may be set forth in the Bylaws of the Company or the Bank.
In addition, Executive shall be responsible for establishing the
business objectives, policies and strategic plans of the Employer,
in conjunction with the Boards of Directors of the Company and the
Bank (each, a “Board,” provided that unless
specifically designated otherwise, “Board” shall refer
to the disinterested members of both Boards). During the term of
the Agreement, Executive also agrees to serve, if elected, as an
officer and/or director of the Company, the Bank or any of their
respective subsidiaries or affiliates and in such capacity carry
out such duties and responsibilities reasonably appropriate to that
office.
2. TERM
AND ANNUAL REVIEW
(a) Term. This Agreement
will be effective, and the term of this Agreement will commence,
only upon receipt of a written approval or nonobjection from the
Office of Thrift Supervision and the Federal Deposit Insurance
Corporation that authorizes the Company and the Bank to employ
Executive as President and Chief Executive Officer and enter into
the Agreement (the “Effective Date”) and, if effective,
will continue for thirty-six (36) full calendar months
thereafter. In the event that the Company and the Bank are unable
to obtain such approval or nonobjection within ninety
(90) days of the date first written above, this Agreement
shall be void and without effect. Subject to Section 2(b),
commencing on the third anniversary of the Effective Date and
continuing on each anniversary date thereafter, the term of this
Agreement shall extend for one year, unless the Boards (or one of
the Boards) elects no earlier than sixty (60) and no later
than thirty (30) days prior to the anniversary date not to
extend the term of this Agreement by giving written notice to the
other party of non-renewal.
(b) Annual Review . On an
annual basis, the disinterested members of the Board will conduct a
comprehensive performance evaluation and review of
Executive’s performance, and the results thereof will be
included in the minutes of the Board’s meeting. The
Board’s decision to extend the initial term of the Agreement
or give notice of non-renewal shall be based on the results of such
annual performance reviews.
During the
period of his employment hereunder, except for reasonable periods
of absence occasioned by illness, permitted vacation periods, and
reasonable leaves of absence, Executive will devote all of his
business time, attention, skill and efforts to the faithful
performance of his duties under this Agreement, including
activities and duties directed by the Board. Notwithstanding the
preceding sentence, subject to the approval of the Board, Executive
may serve as a member of the board of directors of business,
community and charitable organizations, provided that in each case
such service shall not materially interfere with the performance of
his duties under this Agreement, adversely affect the reputation of
the Employer or any other affiliates of the Employer, or present
any conflict of interest.
4.
COMPENSATION AND REIMBURSEMENT
(a) Base Salary . In
consideration of Executive’s performance of the
responsibilities and duties set forth in Section 1, the
Employer will provide Executive the compensation specified in this
Agreement. The Employer will pay Executive a salary of $300,000 for
the first year, $325,000 for the second year, and $350,000 for the
third year, and shall be mutually agreed upon by the parties for
any renewal terms (the yearly salaries hereinafter referred to as
the “Base Salary”). Such Base Salary will be payable in
accordance with the customary payroll practices of the Employer.
The Company and the Bank shall apportion between them the Base
Salary, based upon the services rendered by Executive to the
Company and the Bank. During the period of this Agreement,
Executive’s Base Salary shall be reviewed at least annually
by the Compensation Committee of the Company Board (the
“Committee”). Any increase in Base Salary will become
the “Base Salary” for purposes of this
Agreement.
(b) Bonus and Incentive
Compensation . Executive will be entitled to participate in
any incentive compensation and bonus plans or arrangements of the
Employer. Such incentive compensation will be paid in cash in
accordance with the terms of such plans or arrangements, or on a
discretionary basis by the Committee. Nothing paid to Executive
under any such plans or arrangements will be deemed to be in lieu
of other compensation to which Executive is entitled under this
Agreement. Notwithstanding the foregoing, Executive shall
(i) not be entitled to any incentive or bonus payment with
respect to the Company’s fiscal year ending June 30,
2010 and (ii) in each subsequent fiscal year of the Company which
begins during the term of this Agreement, Executive shall be
eligible to receive a cash bonus of up to $100,000 based on the
attainment of such Company and/or individual performance objectives
as may be established by mutual agreement of Executive and the
Employer. Not later than April 30, 2010 and each April 30
thereafter during the term of the Agreement, Executive shall
provide the Committee with a written proposal on the performance
objectives applicable to his incentive opportunity for the next
fiscal year with the intent that such objectives will be finalized
by Executive and the Committee prior to the beginning of such
fiscal year.
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(c) Benefit Plans .
Executive will be entitled to participate in all employee benefit
plans and programs that are generally offered to employees of the
Employer, including, but not limited to, Employer’s qualified
retirement plans group life, health (including hospitalization,
medical and major medical), dental, accident and long term
disability insurance plans (collectively referred to as
“Benefits”) subject to and on a basis consistent with
the terms, conditions and overall administration of such plans and
arrangements; provided, however, that, at Executive’s
election and in lieu of participation in the Bank’s program,
the Bank will pay the cost of Executive’s coverage under the
Fifth Third Bank retiree medical and dental coverage
program.
(d) Vacation and Leave .
Executive will be entitled to five weeks paid vacation time each
year during the term of this Agreement in accordance with the
Bank’s customary practices, as well as sick leave, holidays
and other paid absences in accordance with the Bank’s
policies and procedures for senior executives. Any vacation time in
excess of two consecutive weeks, shall be subject to the approval
of the Board. Any unused paid time off during an annual period will
be treated in accordance with the Bank’s personnel policies
as in effect from time to time.
(e) Expense Reimbursements .
The Employer will reimburse Executive for all reasonable travel,
entertainment and other reasonable expenses incurred by Executive
during the course of performing his obligations under this
Agreement, including, without limitation, fees for memberships in
such organizations as Executive and the Board mutually agree are
necessary and appropriate in connection with the performance of his
duties under this Agreement, upon substantiation of such expenses
in accordance with applicable policies and procedures of the
Employer.
(f) Restricted Stock Grant .
As of the Effective Date, the Committee shall take such action as
may be necessary to grant Executive 240,000 shares of restricted
Company common stock (the “Restricted Stock”) and grant
such shares of Restricted Stock to Executive as of the Effective
Date. The award agreement relating to such award shall provide for
the vesting of the award in five installments of 48,000 shares
each, with vesting to occur on the first anniversary of the
Effective Date and each anniversary thereafter until fully vested.
In all other respects, the grant shall be subject to the terms and
conditions stated in the Company’s 2008 Equity Incentive
Plan. The Company and the Bank acknowledge that Executive may, in
his sole discretion, make an election under Section 83(b) of the
Internal Revenue Code of 1986, as amended (the “Code”)
with respect to all or any portion of such grant.
Executive’s principal place of employment
will be at the Company’s and the Bank’s principal
executive offices. The Bank will provide Executive at his principal
place of employment with a private office, secretarial and other
support services and facilities suitable to his position with the
Bank and necessary or appropriate in connection with the
performance of his duties under this Agreement.
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6.
TERMINATION AND TERMINATION PAY . Executive’s employment under this
Agreement may be terminated in the following
circumstances:
(a) Death .
Executive’s employment under this Agreement will terminate
upon his death during the term of this Agreement, in which event
Executive’s estate or beneficiary will receive the
compensation due to Executive through the last day of the calendar
month in which his death occurred.
(b) Retirement . This
Agreement will terminate upon Executive’s
“Retirement” under the retirement benefit plan or plans
of the Employer in which he participates. Executive will not be
entitled to the termination benefits specified in Section 6
hereof in the event of termination due to Retirement. For purposes
of this Agreement, termination of Executive’s employment
based on Retirement shall include termination of Executive’s
employment after Executive has reached age sixty-five (65) in
accordance with any retirement arrangement established by the Board
with Executive’ s consent.
(i) Termination of Executive’s
employment based on “Disability” shall mean termination
because of any permanent and total physical or mental impairment
that restricts Executive from performing all the essential
functions of normal employment. A determination as to whether
Executive has suffered a Disability shall be made by the Board with
objective medical input, provided, however, that any termination by
the Board due to Disability shall not occur prior to the date on
which Executive first becomes eligible for Disability benefits
under the Bank’s long-term disability program. In the event
of termination due to Disability, Executive will be entitled to
disability benefits, if any, provided under a long term disability
plan sponsored by the Bank, if any.
(ii) In the event the Board determines that
Executive is Disabled, Executive will no longer be obligated to
perform services under this Agreement. Upon Executive’s
termination due to Disability, the Bank will continue to provide to
Executive life insurance and non-taxable medical and dental
coverage substantially comparable (and on substantially the same
terms and conditions), to the coverage maintained by the Bank for
Executive immediately prior to his termination for Disability. This
coverage shall cease one (1) year from the date of
termination. Executive’s health care continuation rights
available under COBRA shall commence following the termination of
the coverage provided by this Section 6(c)(ii).
(d)
Termination for Cause .
(i) The Board may by written notice to
Executive in the form and manner specified in this paragraph,
immediately terminate his employment at any time for
“Cause.” Executive shall have no right to receive
compensation or Benefits for any period after termination for
Cause, except for already vested Benefits. Termination for Cause
shall mean termination because of, in the good faith determination
of the Board, Executive’s:
(1) material act of dishonesty in
performing Executive’s duties on behalf of the
Employer;
(2) willful misconduct that in the judgment
of the Board will likely cause economic damage to the Employer or
injury to the business reputation of the Employer;
(3) incompetence (in determining
incompetence, the acts or omissions shall be measured against
standards generally prevailing in the savings institutions
industry);
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(4) breach
of fiduciary duty involving personal profit;
(5) intentional failure to perform stated
duties under this Agreement after written notice thereof from the
Board;
(6) willful violation of any law, rule or
regulation (other than minor or routine traffic violations or
similar offenses) that reflect adversely on the reputation of the
Employer, any felony conviction, any violation of law involving
moral turpitude, or any violation of a final cease-and desist
order; or
(7) material breach by Executive of any
provision of this Agreement.
(ii) Notwithstanding the foregoing,
Executive’s termination for Cause will not become effective
unless the Employer has delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the disinterested members of the Board, at a meeting of
the Board called and held for the purpose of finding that, in the
good faith opinion of the Board (after reasonable notice to
Executive and an opportunity for Executive to be heard before the
Board), Executive was guilty of the conduct described above and
specifying the particulars of such conduct.
(e) Voluntary Termination by
Executive . In addition to his other rights to terminate
his employment under this Agreement, Executive may voluntarily
terminate employment during the term of this Agreement upon at
least sixty (60) days prior written notice to the Board. Upon
Executive’s voluntary termination, he will receive only his
compensation and vested rights and Benefits to the date of his
termination. Following his voluntary termination of employment
under this Section 6(e), Executive will be subject to the
restrictions set forth in Section 8(a) and 8(b) of this
Agreement.
(f)
Termination Without Cause or With Good Reason
.
(i) The Board may, by written notice to
Executive, immediately terminate his employment at any time for a
reason other than Cause (a termination “Without
Cause”), and Executive may, by written notice to the Board,
terminate this Agreement at any time within ninety (90) days
following an event constituting “Good Reason,” as
defined below (a termination “With Good
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