AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This Amended and Restated Employment Agreement (this “Agreement”) is made
effective as of February 18, 2014  (the “Effective Date”), by and between
Cheviot Saving Bank, an Ohio-chartered stock savings and loan association (the
“Bank”) and Thomas J. Linneman (“Executive”).  The Bank and Executive are
sometimes collectively referred to herein as the “parties.”  Any reference to
the “Company” shall mean Cheviot Financial Corp., the holding company of the
Bank.  The Company is a signatory to this Agreement for the purpose of
guaranteeing the Bank’s performance hereunder.
 
WITNESSETH
 
WHEREAS, Executive is currently employed as President and Chief Executive
Officer of the Bank pursuant to an employment agreement between the Bank and the
Executive originally entered into on January 5, 2004, and subsequently amended
and restated as of September 16, 2008 ( the “Original Agreement”);
 
 WHEREAS, the Bank desires to amend and restate the Original Agreement to
reflect current compensation and regulatory trends, as well as to make certain
other changes;

                 WHEREAS, the Bank desires to ensure the continued availability
of the Executive’s services as provided in this Agreement and the Executive is
willing to serve the Bank on the terms and conditions hereinafter set forth; and
 
                 WHEREAS, the Board of Directors of the Bank and the Executive
believe it is in the best interests of the Bank to enter into the Agreement in
order to reinforce and reward the Executive for his service and dedication to
the continued success of the Bank.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the terms and conditions hereinafter provided, the parties hereby agree as
follows:
 
1. POSITION AND RESPONSIBILITIES.
 
During the term of this Agreement, Executive shall serve as a member of the
Board of Directors of the Bank (the “Board”), President and Chief Executive
Officer of the Bank.  Executive shall be responsible for the overall management
of the Bank, and shall be responsible for establishing the business objectives,
policies and strategic plan of the Bank, in conjunction with the
Board.  Executive also shall be responsible for providing leadership and
direction to all departments or divisions of the Bank, and shall be the primary
contact between the Board and the staff.  As Chief Executive Officer, Executive
shall directly report to the Board.  Executive also shall be nominated as a
member of the Board, subject to election by members or shareholders of the Bank,
as the case may be.  Executive also agrees to serve, if elected, as an officer
and director of any affiliate of the Bank.

 
 

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2. TERM AND DUTIES.
 
(a)           Three Year Contract; Annual Renewal.  The term of this Agreement
will begin as of the Effective Date and shall continue thereafter for a period
of three (3) years.  Beginning on the first annual anniversary date of this
Agreement, and on each annual anniversary date thereafter, the term of this
Agreement shall be extended for a period of one year in addition to the
then-remaining term; provided that (1) the Bank has not given notice to the
Executive in writing at least thirty (30) days prior to or thirty (30) days
after such renewal date that the term of this Agreement shall not be extended
further; and (2) prior to such renewal date, the disinterested members of the
Board of Directors of the Bank (the “Board”) have explicitly reviewed and
approved the extension and the results thereof shall be included in the minutes
of the Board’s meeting.  On an annual basis prior to the deadline for the notice
period referenced above, the Board shall conduct a performance review of the
Executive for purposes of determining whether to provide notice of
non-renewal.  Reference herein to the term of this Agreement shall refer to both
such initial term and such extended terms.
 
(b)           Termination of Agreement.  Notwithstanding anything contained in
this Agreement to the contrary, either Executive or the Bank may terminate
Executive’s employment with the Bank at any time during the term of this
Agreement, subject to the terms and conditions of this Agreement.
 
(c)           Continued Employment Following Expiration of Term.  Nothing in
this Agreement shall mandate or prohibit a continuation of Executive’s
employment following the expiration of the term of this Agreement, upon such
terms and conditions as the Bank and Executive may mutually agree.

(d)           Duties; Membership on Other Boards.  During the term of this
Agreement, except for periods of absence occasioned by illness, reasonable
vacation periods, and reasonable leaves of absence approved by the Board,
Executive shall devote substantially all of his business time, attention, skill,
and efforts to the faithful performance of his duties hereunder, including
activities and services related to the organization, operation and management of
the Bank; provided, however, that, Executive may serve, or continue to serve, on
the boards of directors of, and hold any other offices or positions in, business
companies or business or civic organizations, which, in the Board’s judgment,
will not present any conflict of interest with the Bank, or materially affect
the performance of Executive’s duties pursuant to this Agreement.  Executive
shall provide the Board of Directors annually for its approval a list of
organizations for which the Executive acts as a director or officer.
 
3. COMPENSATION, BENEFITS AND REIMBURSEMENT.
 
(a) Base Salary.  In consideration of Executive’s performance of the duties set
forth in Section 2, the Bank shall provide Executive the compensation specified
in this Agreement.  The Bank shall pay Executive a salary of $280,488 per year
(“Base Salary”). The Base Salary shall be payable biweekly, or with such other
frequency as officers of the Bank are generally paid. During the term of this
Agreement, the Base Salary shall be reviewed at least annually by the Board or
by a committee designated by the Board, and the Bank may increase, but not
decrease (except for a decrease that is generally applicable to all employees)
Executive’s Base Salary. Any increase in Base Salary shall become “Base Salary”
for purposes of this Agreement.
 
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(b) Bonus and Incentive Compensation.  Executive shall be entitled to equitable
participation in incentive compensation and bonuses in any plan or arrangement
of the Bank or the Company in which Executive is eligible to
participate.  Nothing paid to Executive under any such plan or arrangement will
be deemed to be in lieu of other compensation to which Executive is entitled
under this Agreement.  In lieu of any bonus normally provided to permanent
full-time employees of the Bank, the Bank agrees to provide a bonus program to
the Executive which will provide the Executive with the opportunity to earn up
to 50% of the Executive’s base salary, on an annual basis, the amount of which
shall be determined by specific performance standards and a formula agreed to by
Executive and the Bank annually.  Performance standards shall be measured on a
calendar year, and no bonus shall be payable if Executive is not employed on
December 31 of the year in question.
 
(c) Employee Benefits.  The Bank shall provide Executive with employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
Executive was participating or from which he was deriving benefit immediately
prior to the commencement of the term of this Agreement, and the Bank shall not,
without Executive’s prior written consent, make any changes in such plans,
arrangements or perquisites that would adversely affect Executive’s rights or
benefits thereunder, except as to any changes that are applicable to all
participating employees.  Without limiting the generality of the foregoing
provisions of this Section 3(c), Executive will be entitled to participate in
and receive benefits under any employee benefit plans including, but not limited
to, retirement plans, supplemental retirement plans, pension plans,
profit-sharing plans, health-and-accident insurance plans, medical coverage or
any other employee benefit plan or arrangement made available by the Bank and/or
the Company in the future to its senior executives, including any stock benefit
plans, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements.  In addition, during the
term of this Agreement, the Bank shall provide the Executive with a supplemental
life insurance policy with a death benefit of not less than $200,000.
 
(d) Paid Time Off.  Executive shall be entitled to paid vacation time each year
during the term of this Agreement (measured on a fiscal or calendar year basis,
in accordance with the Bank’s usual practices), as well as sick leave, holidays
and other paid absences in accordance with the Bank’s policies and procedures
for senior executives, but, in any event, not less than four (4) weeks vacation
annually.  Any unused paid time off during an annual period shall be treated in
accordance with the Bank’s personnel policies as in effect from time to time.
 
(e) Expense Reimbursements.  The Bank shall also pay or 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 clubs and
organizations as Executive and the Board shall mutually agree are necessary and
appropriate in connection with the performance of his duties under this
Agreement, upon presentation to the Bank of an itemized account of such expenses
in such form as the Bank may reasonably require, provided that such payment or
reimbursement shall be made as soon as practicable but in no event later than
March 15 of the year following the year in which such right to such payment or
reimbursement occurred.
 
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4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
 
(a) Upon the occurrence of an Event of Termination (as herein defined) during
the term of this Agreement, the provisions of this Section 4 shall apply;
provided, however, that in the event such Event of Termination occurs within
eighteen (18) months following a Change in Control (as defined in Section 5
hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of
Termination’’ shall mean and include any one or more of the following:
 
(i) the involuntary termination of Executive’s employment hereunder by the Bank
for any reason other than termination governed by Section 5 (in connection with
or following a Change in Control), Section 6 (due to Disability or death),
Section 7 (due to Retirement), or  Section 8 (for Cause), provided that such
termination constitutes a “Separation from Service” within the meaning of
Section 409A of the Internal Revenue Code (“Code”); or
 
(ii) Executive’s resignation from the Bank’s employ upon any of the following,
unless consented to by Executive:
 
    (A)           failure to appoint Executive to the position set forth in
Section 1, or a material change in Executive’s function, duties, or
                         responsibilities, which change would cause Executive’s
position to become one of lesser responsibility, importance, or
                         scope from the position and responsibilities described
in Section 1, to which Executive has not agreed in writing (and
                         any such material change shall be deemed a continuing
breach of this Agreement by the Bank);
 
    (B)           a relocation of Executive’s principal place of employment to a
location that is more than 10 miles from the location of
                         the Bank’s principal executive offices as of the date
of this Agreement;
 
    (C)           a material reduction in the benefits and perquisites,
including Base Salary, to Executive from those being provided
                         as of the Effective Date (except for any reduction that
is part of a reduction in pay or benefits that is generally
                         applicable to officers or employees of the Bank);
 

    (D)           a liquidation or dissolution of the Bank; or
 
    (E)           a material breach of this Agreement by the Bank.
 
Upon the occurrence of any event described in clause (ii) above, Executive shall
have the right to elect to terminate his employment under this Agreement by
resignation for “Good Reason” upon not less than thirty (30) days prior written
notice given within a reasonable period of time (not to exceed ninety (90) days)
after the event giving rise to the right to elect, which termination by
Executive shall be an Event of Termination.  The Bank shall have thirty (30)
days to cure the condition giving rise to the Event of Termination, provided
that the Bank may elect to waive said thirty (30) day period.
 
(b) Upon the occurrence of an Event of Termination, the Bank shall pay
Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, the Base Salary and bonuses that Executive would be entitled
to for the remaining unexpired term of the Agreement.  For purposes of
determining the bonus(es) payable hereunder, the bonus(es) will be deemed to be
(i) equal to the highest bonus paid at any time during the prior three years,
and (ii) otherwise paid at such time as such bonus would have been paid absent
an Event of Termination.  Such payments shall be paid in a lump sum on the
thirtieth (30th) day following the date of the Executive’s Separation from
Service (within the meaning of Section 409A of the Code) and shall not be
reduced in the event Executive obtains other employment following the Event of
Termination.
 
(c) Upon the occurrence of an Event of Termination, the Bank shall pay
Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a lump sum cash payment
reasonably estimated to be equal to the present value of the contributions that
would have been made on the Executive’s behalf under the Bank’s defined
contribution plans (e.g., 401(k) Plan, ESOP, and any other defined contribution
plan maintained by the Bank), as if Executive had continued working for the Bank
for the remaining unexpired term of the Agreement following such Event of
Termination, earning the salary that would have been achieved during such
period.  Such payments shall be paid in a lump sum within thirty (30) days of
the Executive’s Separation from Service and shall not be reduced in the event
Executive obtains other employment following the Event of Termination.
 
(d) Upon the occurrence of an Event of Termination, the Bank shall provide, at
the Bank’s expense, for the remaining unexpired term of the Agreement,
nontaxable medical and dental coverage and life insurance coverage substantially
comparable, as reasonably available, to the coverage maintained by the Bank for
Executive prior to the Event of Termination, except to the extent such coverage
may be changed in its application to all Bank employees.
 
(e) For purposes of this Agreement, a “Separation from Service” shall have
occurred if the Bank and Executive reasonably anticipate that either no further
services will be performed by the Executive after the date of the Event of
Termination (whether as an employee or as an independent contractor) or the
level of further services performed will not exceed 49% of the average level of
bona fide services in the 12 months immediately preceding the Event of
Termination.  For all purposes hereunder, the definition of Separation from
Service shall be interpreted consistent with Treasury Regulation Section
1.409A-1(h)(ii).  If Executive is a Specified Employee, as defined in Code
Section 409A and any payment to be made under sub-paragraph (b) or (c) of this
Section 4 shall be determined to be subject to Code Section 409A, then if
required by Code Section 409A, such payment or a portion of such payment (to the
minimum extent possible) shall be delayed and shall be paid on the first day of
the seventh month following Executive’s Separation from Service.
 
(f) Release Required and Timing of Payments and Benefits.  Notwithstanding the
foregoing, Executive shall not be entitled to any payments or benefits under
this Section 4 unless and until Executive executes a release of his claims
against the Bank, the Company and any affiliate, and their officers, directors,
successors and assigns, releasing said persons from any and all claims, rights,
demands, causes of action, suits, arbitrations or grievances relating to the
employment relationship, including claims under the Age Discrimination in
Employment Act, but not including claims for benefits under tax-qualified plans
or other benefit plans in which Executive is vested, claims for benefits
required by applicable law or claims with respect to obligations set forth in
this Agreement that survive the termination of this Agreement (the “Release”),
and (ii) the payments and benefits shall begin on the 30th day following the
date of the Executives Separation from Service, provided that before that date,
the Executive has signed (and not revoked) the Release and the Release is
irrevocable under the time period set forth under applicable law (and the
payments and benefits will not be provided if the Release is not provided within
the timeframe set forth in this section).
 
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5. CHANGE IN CONTROL.
 
(a) Any payments made to Executive pursuant to this Section 5 are in lieu of any
payments that may otherwise be owed to Executive pursuant to this Agreement
under Section 4, such that Executive shall either receive payments pursuant to
Section 4 or pursuant to Section 5, but not pursuant to both Sections.
 

(b) For purposes of this Agreement, the term “Change in Control” shall mean:
 
 
(1)
Change in ownership: A change in ownership of the Bank or the Company occurs on
the date any one person or group of persons accumulates ownership of more than
50% of the total fair market value or total voting power of the Bank or the
Company;  or

 
(2)
Change in effective control: A change in effective control occurs when either
(i) any one person or more than one person acting as a group acquires within a
twelve (12)-month period ownership of stock of the Bank or Company possessing
35% or more of the total voting power of the Bank or Company; or (ii) a majority
of the Bank’s or Company’s Board of Directors is replaced during any 12-month
period by Directors whose appointment or election is not endorsed in advance by
a majority of the Bank’s or Company’s Board of Directors (as applicable), or

 
(3)
Change in ownership of a substantial portion of assets: A change in the
ownership of a substantial portion of the Bank’s or Company's assets occurs if,
in a twelve (12)-month period, any one person or more than one person acting as
a group acquires assets from the Bank or Company having a total gross fair
market value equal to or exceeding 40% of the total gross fair market value of
the Bank’s or Company’s entire assets immediately before the acquisition or
acquisitions. For this purpose, “gross fair market value” means the value of the
Bank’s or Company’s assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with the assets.

(c) Upon the occurrence of a Change in Control followed within eighteen (18)
months by an Event of Termination (as defined in Section 4 hereof), Executive,
shall receive as severance pay or liquidated damages, or both, a lump sum cash
payment equal to three times the sum of (i) Executive’s highest annual rate of
Base Salary paid to Executive at any time under this Agreement, plus (ii) the
highest bonus paid to Executive with respect to the three completed fiscal years
prior to the Change in Control.  Such payment shall be paid in a lump sum within
ten (10) days of the Executive’s Separation from Service (within the meaning of
Section 409A of the Code) and shall not be reduced in the event Executive
obtains other employment following the Event of Termination.
 
(d) Upon the occurrence of a Change in Control followed within eighteen (18)
months by an Event of Termination (as defined in Section 4 hereof), the Bank
shall pay Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a lump sum cash payment
reasonably estimated to be equal to the present value of the contributions that
would have been made on Executive’s behalf under the Bank’s defined contribution
plans (e.g., 401(k) Plan, ESOP, and any other defined contribution plan
maintained by the Bank), as if Executive had continued working for the Bank for
thirty-six (36) months after the effective date of such termination of
employment, earning the salary that would have been achieved during such
period.  Such payments shall be paid in a lump sum within ten (10) days of the
Executive’s Separation from Service and shall not be reduced in the event
Executive obtains other employment following the Event of Termination.  If
Executive is a Specified Employee, as defined in Code Section 409A and any
payment to be made under this sub-paragraph (c) or (d) of this Section 5 shall
be determined to be subject to Code Section 409A, then if required by Code
Section 409A, such payment or a portion of such payment (to the minimum extent
possible) shall be delayed and shall be paid on the first day of the seventh
month following Executive’s Separation from Service.
 
(e) Upon the occurrence of a Change in Control followed within eighteen (18)
months by an Event of Termination (as defined in Section 4 hereof), the Bank (or
its successor) shall provide at the Bank’s (or its successor’s) expense,
nontaxable medical and dental coverage and life insurance coverage substantially
comparable, as reasonably available, to the coverage maintained by the Bank for
Executive prior to his termination, except to the extent such coverage may be
changed in its application to all Bank employees and then the coverage provided
to Executive shall be commensurate with such changed coverage.  Such coverage
shall cease thirty-six (36) months following the termination of Executive’s
employment.
 
6. TERMINATION FOR DISABILITY OR DEATH.
 
(a) Termination of Executive’s employment based on “Disability” shall be
construed to comply with Section 409A of the Internal Revenue Code and shall be
deemed to have occurred if: (i) Executive is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death, or last for a continuous
period of not less than 12 months; (ii) by reason of any medically determinable
physical or mental impairment that can be expected to result in death, or last
for a continuous period of not less than 12 months, Executive is receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank or the Company; or (iii)
Executive is determined to be totally disabled by the Social Security
Administration. The provisions of Sections 6(b) and (c) shall apply upon the
termination of the Executive’s employment based on Disability.  Upon the
determination that Executive has suffered a Disability, disability payments
hereunder shall commence within thirty (30) days.
 
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(b) Executive shall be entitled to receive benefits under any short-term or
long-term disability plan maintained by the Bank.  To the extent such benefits
are less than Executive’s Base Salary, the Bank shall pay Executive an amount
equal to the difference between such disability plan benefits and the amount of
Executive’s Base Salary and end on the earlier of (i) the date Executive returns
to the full-time employment of the Bank; (ii) Executive’s full-time employment
by another employer; (iii) expiration of the remaining term of this Agreement;
or (iv) Executive’s death.
 
(c) The Bank shall cause to be continued life insurance coverage and non-taxable
medical and dental coverage substantially comparable, as reasonable available,
to the coverage maintained by the Bank for Executive prior to the termination of
his employment based on Disability, except to the extent such coverage may be
changed in its application to all Bank employees or not available on an
individual basis to an employee terminated based on Disability.  This coverage
shall cease upon the earlier of (i) the date Executive returns to the full-time
employment of the Bank; (ii) Executive’s full-time employment by another
employer; (iii) expiration of the remaining term of this Agreement; or (iv)
Executive’s death.
 
(d)           In the event of Executive’s death during the term of this
Agreement, his estate, legal representatives or named beneficiaries (as directed
by Executive in writing) shall be paid Executive’s Base Salary at the rate in
effect at the time of Executive’s death in accordance with the regular payroll
practices of the Bank for a period of one (1) year from the date of Executive’s
death, and the Bank shall continue to provide non-taxable medical, dental and
other insurance benefits normally provided for Executive’s family (in accordance
with its customary co-pay percentages) for twelve (12) months after Executive’s
death.  Such payments are in addition to any other life insurance benefits that
Executive’s beneficiaries may be entitled to receive under any employee benefit
plan maintained by the Bank for the benefit of Executive, including, but not
limited to, the Bank’s tax-qualified retirement plans.
 
7. TERMINATION UPON RETIREMENT.
 
Termination of Executive’s employment based on “Retirement” shall mean
termination of Executive’s employment in accordance with a retirement policy, if
any, established by the Board with Executive’s consent with respect to him.  A
termination of Executive based on Retirement shall not affect or reduce any
benefit or compensation that the Executive is otherwise entitled to.
 
8. TERMINATION FOR CAUSE.
 
(a)           The Bank may terminate Executive’s employment at any time, but any
termination other than termination for “Cause,” as defined herein, shall not
prejudice Executive’s right to compensation or other benefits under this
Agreement.  Executive shall have no right to receive compensation or other
benefits for any period after termination for “Cause.”  The term “Cause” as used
herein, shall exist when there has been a good faith determination by the Board
that there shall have occurred one or more of the following events with respect
to the Executive:
 
         (1) personal dishonesty;
 
         (2) incompetence;
 
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         (3) willful misconduct;
 
         (4) breach of fiduciary duty involving personal profit;
 
         (5) material breach of the Bank’s Code of Ethics;
 
(6)  
material violation of the Sarbanes-Oxley requirements for officers of public
companies that in the reasonable opinion of the Board will likely cause
substantial financial harm or substantial injury to the reputation of the Bank;

 
(7)  
intentional failure to perform stated duties under this Agreement after written
notice thereof from the Board;

 
(8)  
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) that reflect adversely on the reputation of the Bank, any
felony conviction, any violation of law involving moral turpitude, or any
violation of a final cease-and-desist order; or

 
(9)  
material breach by Executive of any provision of this Agreement.

 
 Notwithstanding the foregoing, Cause shall not be deemed to exist unless there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the entire membership of
the Board at a meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and an opportunity for the Executive to be
heard before the Board), finding that in the good faith opinion of the Board the
Executive was guilty of conduct described above and specifying the particulars
thereof.  Prior to holding a meeting at which the Board is to make a final
determination whether Cause exists, if the Board determines in good faith at a
meeting of the Board, by not less than a majority of its entire membership, that
there is probable cause for it to find that the Executive was guilty of conduct
constituting Cause as described above, the Board may suspend the Executive from
his duties hereunder for a reasonable period of time not to exceed fourteen (14)
days pending a further meeting  at which the Executive shall be given the
opportunity to be heard before the Board.  Upon a finding of Cause, the Board
shall deliver to the Executive a Notice of Termination, as more fully described
in Section 10 below.
 
(b)           For purposes of this Section 8, no act or failure to act, on the
part of Executive, shall be considered “willful” unless it is done, or omitted
to be done, by Executive in bad faith or without reasonable belief that
Executive’s action or omission was in the best interests of the Bank.  Any act,
or failure to act, based upon the direction of the Board or based upon the
advice of counsel for the Bank shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of the
Bank.

9. RESIGNATION FROM BOARDS OF DIRECTORS
 
In the event of Executive’s termination of employment due to an Event of
Termination, Executive’s service as a director of the Bank, the Company, and any
affiliate of the Bank or the Company shall immediately terminate.  This Section
9 shall constitute a resignation notice for such purposes.
 
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10. NOTICE.
 
(a) Any purported termination by the Bank for Cause shall be communicated by
Notice of Termination to Executive.  If, within thirty (30) days after any
Notice of Termination for Cause is given, Executive notifies the Bank that a
dispute exists concerning the termination, the parties shall promptly proceed to
arbitration, as provided in Section 20.  Notwithstanding the pendency of any
such dispute, the Bank shall discontinue paying Executive’s compensation until
the dispute is finally resolved in accordance with this Agreement.  If it is
determined that Executive is entitled to compensation and benefits under Section
4 or 5, the payment of such compensation and benefits by the Bank shall commence
immediately following the date of resolution by arbitration, with interest due
Executive on the cash amount that would have been paid pending arbitration (at
the prime rate as published in The Wall Street Journal from time to time).
 
(b) Any other purported termination by the Bank or by Executive shall be
communicated by a “Notice of Termination” (as defined in Section 10(c)) to the
other party.  If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the parties shall promptly
proceed to arbitration as provided in Section 20.  Notwithstanding the pendency
of any such dispute, the Bank shall continue to pay Executive his Base Salary,
and other compensation and benefits in effect when the notice giving rise to the
dispute was given (except as to termination of Executive for Cause); provided,
however, that such payments and benefits shall not continue beyond the date that
is 36 months from the date the Notice of Termination is given.  In the event the
voluntary termination by Executive of his employment is disputed by the Bank,
and if it is determined in arbitration that Executive is not entitled to
termination benefits pursuant to this Agreement, he shall return all cash
payments made to him pending resolution by arbitration, with interest thereon at
the prime rate as published in The Wall Street Journal from time to time, if it
is determined in arbitration that Executive’s voluntary termination of
employment was not taken in good faith and not in the reasonable belief that
grounds existed for his voluntary termination.  If it is determined that
Executive is entitled to receive severance benefits under this Agreement, then
any continuation of Base Salary and other compensation and benefits made to
Executive under this Section 10 shall offset the amount of any severance
benefits that are due to Executive under this Agreement.
 
(c) For purposes of this Agreement, a “Notice of Termination” shall mean a
written notice that shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.
 
11. POST-TERMINATION OBLIGATIONS.
 
(a)           Executive hereby covenants and agrees that, for a period of one
year following his termination of employment with the Bank, he shall not,
without the written consent of the Bank, either directly or indirectly:

(i)           solicit, offer employment to, or take any other action intended
(or that a reasonable person acting in like circumstances would expect) to have
the effect of causing any officer or employee of the Bank or the Company, or any
of their respective subsidiaries or affiliates, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, any business whatsoever that
competes with the business of the Bank or the Company, or any of their direct or
indirect subsidiaries or affiliates or has headquarters or offices within sixty
(60) miles of the locations in which the Bank or the Company has business
operations or has filed an application for regulatory approval to establish an
office; or

(ii)           become an officer, employee, consultant, director, independent
contractor, agent, sole proprietor, joint venturer, greater than 5% equity owner
or stockholder, partner or trustee of any savings bank, savings and loan
association, savings and loan holding company, credit union, bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other financial services entity or business that competes with the business of
the Bank or its affiliates or has headquarters or offices within sixty (60)
miles of Cheviot, Ohio; provided, however, that this restriction shall not apply
if Executive’s employment is terminated following a Change in Control or if
Executive does not have any right to or waives (or returns to the Bank) any
payments under Section 4 hereof.
 
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(b)             As used in this Agreement, “Confidential Information” means
information belonging to the Bank which is of value to the Bank in the course of
conducting its business and the disclosure of which could result in a
competitive or other disadvantage to the Bank. Confidential Information
includes, without limitation, financial information, reports, and forecasts;
inventions, improvements and other intellectual property; trade secrets;
know-how; designs, processes or formulae; software; market or sales information
or plans; customer lists; and business plans, prospects and opportunities (such
as possible acquisitions or dispositions of businesses or facilities) which have
been discussed or considered by the management of the Bank. Confidential
Information includes information developed by the Executive in the course of the
Executive’s employment by the Bank, as well as other information to which the
Executive may have access in connection with the Executive’s employment.
Confidential Information also includes the confidential information of others
with which the Bank has a business relationship. Notwithstanding the foregoing,
Confidential Information does not include information in the public domain.  The
Executive understands and agrees that the Executive’s employment creates a
relationship of confidence and trust between the Executive and the Bank with
respect to all Confidential Information. At all times, both during the
Executive’s employment with the Bank and after its termination, the Executive
will keep in confidence and trust all such Confidential Information, and will
not use or disclose any such Confidential Information without the written
consent of the Bank, except as may be necessary in the ordinary course of
performing the Executive’s duties to the Bank.

(c)           Executive shall, upon reasonable notice, furnish such information
and assistance to the Bank as may reasonably be required by the Bank, in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party; provided, however, that Executive shall
not be required to provide information or assistance with respect to any
litigation between the Executive and the Bank or any of its subsidiaries or
affiliates.
 
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(d)           All payments and benefits to Executive under this Agreement shall
be subject to Executive’s compliance with this Section 11.  The parties hereto,
recognizing that irreparable injury will result to the Bank, its business and
property in the event of Executive’s breach of this Section 11, agree that, in
the event of any such breach by Executive, the Bank will be entitled, in
addition to any other remedies and damages available, to an injunction to
restrain the violation hereof by Executive and all persons acting for or with
Executive. Executive represents and admits that Executive’s experience and
capabilities are such that Executive can obtain employment in a business engaged
in other lines and/or of a different nature than the Bank, and that the
enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood.  Nothing herein will be construed as prohibiting the Bank
or the Company from pursuing any other remedies available to them for such
breach or threatened breach, including the recovery of damages from Executive.
 
12. SOURCE OF PAYMENTS.
 
All payments provided in this Agreement shall be timely paid in cash or check
from the general funds of the Bank. The Company may accede to this Agreement but
only for the purposed of guaranteeing payment and provision of all amounts and
benefits due hereunder to Executive.
 
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
 
This Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Bank or any predecessor of
the Bank and Executive, including the Original Agreement, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided.  No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
 
14. NO ATTACHMENT; BINDING ON SUCCESSORS.
 
(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to effect any such action shall be null, void, and of
no effect.
 
(b) This Agreement shall be binding upon, and inure to the benefit of, Executive
and the Bank and their respective successors and assigns.
 
15. MODIFICATION AND WAIVER.
 
(a) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
 
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(b) No term or condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel.  No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.
 
16. REQUIRED PROVISIONS.
 
(a)           The Bank may terminate Executive’s employment at any time, but any
termination by the Board other than termination for Cause shall not prejudice
Executive’s right to compensation or other benefits under this
Agreement.  Executive shall have no right to receive compensation or other
benefits for any period after termination for Cause.
 
(b)           If Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank’s affairs by a notice
served under Section 8(e)(3) [12 USC §1818(e)(3)] or 8(g)(1) [12 USC
§1818(g)(1)] of the Federal Deposit Insurance Act, the Bank’s obligations under
this contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings.  If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while its contract obligations were suspended and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.
 
(c)           If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank’s affairs by an order issued under
Section 8(e)(4) [12 USC §1818(e)(4)] or 8(g)(1) [12 USC §1818(g)(1)] of the
Federal Deposit Insurance Act, all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
 
(d)           If the Bank is in default as defined in Section 3(x)(1) [12 USC
§1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank
under this Agreement shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
 
(e)           All obligations under this Agreement shall be terminated, except
to the extent determined that continuation of the contract is necessary for the
continued operation of the Bank, (i) by either the Office of the Comptroller of
the Currency or the Board of Governors of the Federal Reserve System
(collectively, the “Regulator”) or his or her designee, at the time the FDIC
enters into an agreement to provide assistance to or on behalf of the Bank under
the authority contained in Section 13(c) [12 USC §1823(c)] of the Federal
Deposit Insurance Act; or (ii) by the Regulator or his or her designee at the
time the Regulator or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Regulator to be in an unsafe or unsound condition.  Any rights of the
parties that have already vested, however, shall not be affected by such action.
 
(f)           Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Bank or the Company, whether pursuant to this
Agreement or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section
1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.
 
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(g)   Notwithstanding anything herein contained to the contrary, if applicable
law (including, but not limited to, laws prohibiting discriminating in favor of
highly compensated employees), or, if participation by the Executive is not
permitted under the terms of the applicable health plans, or if providing such
benefits would subject the Bank to penalties, then the Bank shall pay the
Executive a cash lump sum payment reasonably estimated to be equal to the value
of such non-taxable medical and dental benefits, with such payment to be made by
lump sum within thirty (30) business days of the Date of Termination, or if
later, the date on which the Bank determines that such insurance coverage (or
the remainder of such insurance coverage) cannot be provided for the foregoing
reasons.     
 
17. SEVERABILITY.
 
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
 
18. HEADINGS FOR REFERENCE ONLY.
 
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
 
19. GOVERNING LAW.
 
This Agreement shall be governed by the laws of the State of Ohio except to the
extent superseded by federal law.
 
20. ARBITRATION.
 
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by binding arbitration, as an alternative to civil
litigation and without any trial by jury to resolve such claims, conducted by a
panel of three arbitrators sitting in a location selected by Executive within
fifty (50) miles from the main office of the Bank, in accordance with the rules
of the American Arbitration Association’s National Rules for the Resolution of
Employment Disputes (“National Rules”) then in effect.  One arbitrator shall be
selected by Executive, one arbitrator shall be selected by the Bank and the
third arbitrator shall be selected by the arbitrators selected by the
parties.  If the arbitrators are unable to agree within fifteen (15) days upon a
third arbitrator, the arbitrator shall be appointed for them from a panel of
arbitrators selected in accordance with the National Rules.  Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.
 
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21. INDEMNIFICATION.
 
(a) Executive shall be provided with coverage under a standard directors’ and
officers’ liability insurance policy, and shall be indemnified for the term of
this Agreement and for a period of six years thereafter to the fullest extent
permitted under applicable law against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Bank or any affiliate (whether or not he continues to be a
director or officer at the time of incurring such expenses or liabilities), such
expenses and liabilities to include, but not be limited to, judgments, court
costs and attorneys’ fees and the cost of reasonable settlements (such
settlements must be approved by the Board), provided, however, Executive shall
not be indemnified or reimbursed for legal expenses or liabilities incurred in
connection with an action, suit or proceeding arising from any illegal or
fraudulent act committed by Executive.  Any such indemnification shall be made
consistent with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C.
§1828(k), and the regulations issued thereunder in 12 C.F.R. Part 359.
 
(b)           Any indemnification by the Bank shall be subject to compliance
with any applicable regulations of the Federal Deposit Insurance Corporation.
 
22. NOTICE.  
 
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below:
 
To the Bank:
Cheviot Savings Bank
3723 Glenmore Avenue
Cheviot, Ohio 45211
Attention: Chairman of the Board
 
To Executive:
 
Thomas J. Linneman
At the address last appearing on
the personnel records of the Bank
 
   

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SIGNATURES
 
IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be
executed by their duly authorized representatives, and Executive has signed this
Agreement, on the date first above written.
 

 
CHEVIOT SAVINGS BANK
             
By: /s/ James E. Williamson 
      Member of the Board of Directors
     
CHEVIOT FINANCIAL CORP.
         
By:/s/ John T. Smith 
      Member of the Board of Directors
             
EXECUTIVE:
             
/s/ Thomas J.
Linneman                                                                
Thomas J. Linneman
   

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