exv10w5



 





Exhibit 10.5

FORM OF

FIRST FEDERAL SAVINGS BANK

EMPLOYEE SEVERANCE COMPENSATION PLAN




A. Purpose.



     The primary purpose of the First Federal Savings Bank Employee Severance Compensation Plan
(the “Plan”) is to ensure the successful continuation of the business of First Federal Savings Bank
(the “Bank”) and the fair and equitable treatment of the Bank’s employee following a Change in
Control (as defined below).



B. Covered Employees.



     Subject to paragraph C below, (i) any employee of the Bank with at least one year of service
as of his or her termination date and (ii) any officer listed in Appendix A to the Plan (a
“Designated Officer”) shall be eligible to receive a Change in Control Severance Benefit (as
defined below) if, within the period beginning on the effective date of a Change in Control and
ending on the first anniversary of such date, (i) the employee’s employment with the Bank is
involuntarily terminated or (ii) the employee terminates employment with the Bank voluntarily after
being offered continued employment in a position that is not a Comparable Position (as defined
below).


C. Limitations on Eligibility for Change in Control Severance Benefits or Management Restructuring Benefits.




	1.	 	No employee shall be eligible for a Change in Control Severance Benefit if (a)
his or her employment is terminated for “Cause”, (b) he or she is offered a Comparable
Position within the Bank and declines to accept such position or (c) the employee is,
at the time of termination of employment, a party to an individual employment agreement
or change in control agreement with the Bank and/or FedFirst Financial Corporation (the
“Company).
	 
	2.	 	For purposes of this Plan, a termination of employment for “Cause” shall
include termination because of the employee’s personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or violation of any final cease-and
desist order, or material breach of any provision of the plan.
	 
	3.	 	For purposes of this Plan, a “Comparable Position” shall mean a position that
would (i) provide the employee with base compensation and benefits that are comparable
in the aggregate to those provided to the employee prior to the Change in Control, (ii)
provide the employee with an opportunity for variable bonus compensation that is
comparable to the opportunity provided to the employee prior to the Change in Control,
(iii) be in a location that would not require the employee to increase his or her daily
one way commuting distance by more than thirty-five (35) miles as compared to the
employee’s commuting distance immediately prior to the Change in Control and (iv) have
job skill requirements and duties that are comparable to the requirements and duties of
the position held by the employee prior to the Change in Control.

















 





D. Definitions of Change in Control.




     For purposes of this Plan, “Change in Control” means the occurrence of any
one of the following events:




	(1)	 	Merger: The Company merges into or consolidates with another
corporation, or merges another corporation into the Company, and as
a result less than a majority of the combined voting power of the
resulting corporation immediately after the merger or consolidation
is held by persons who were stockholders of the Company immediately
before the merger or consolidation.
	 
	(2)	 	Acquisition of Significant Share Ownership: The Company
files, or is required to file, a report on Schedule 13D or another
form or schedule (other than Schedule 13G) required under Sections
13(d) or 14(d) of the Securities Exchange Act of 1934, if the
schedule discloses that the filing person or persons acting in
concert has or have become the beneficial owner of 25% or more of a
class of the Company’s voting securities, but this clause (b) shall
not apply to beneficial ownership of Company voting shares held in a
fiduciary capacity by an entity of which the Company directly or
indirectly beneficially owns 50% or more of its outstanding voting
securities.
	 
	(3)	 	Change in Board Composition: During any period of two
consecutive years, individuals who constitute the Company’s Board of
Directors at the beginning of the two-year period cease for any
reason to constitute at least a majority of the Company’s Board of
Directors; provided, however, that for purposes of this clause
(iii), each director who is first elected by the board (or first
nominated by the board for election by the stockholders) by a vote
of at least two-thirds (2/3) of the directors who were directors at
the beginning of the two-year period shall be deemed to have also
been a director at the beginning of such period;
	 
	(4)	 	Sale of Assets: The Company sells to a third party all or
substantially all of its assets; or
	 
	(5)	 	Management Restructuring. Solely with respect to a Designated
Officer, the termination of employment of the individual serving as
Chief Executive Officer of the Bank on the effective date of this
Plan.





E. Determination of the Change in Control Severance Benefit.




     The Change in Control Severance Benefit payable to an eligible employee
under this Plan shall be determined as follows:




	(1)	 	An eligible employee who become entitled to receive a Change
in Control Severance Payment under the Plan shall receive a benefit
determined under the following schedule:






	(a)	 	The basic benefit under the Plan shall be
determined as the product of (i) the employee’s years of
service from his or her hire date (including partial years)
through the termination date and (ii) one (1) month of the
employee’s Base Compensation (as defined below). A “year of
service” shall mean each 12-month period of service following
an employee’s hire date determined without regard the number
of hours worked during such period(s).




2









 






	(b)	 	In the case of a Designated Officer, the greater
of (i) the benefit determined under subparagraph (a) above or
(ii) one (1) year’s base salary at the rate of salary in
effect at the time of the individual’s termination of service
or, if greater, the rate in effect on the date immediately
preceding the effective date of the Change in Control.
	 
	(c)	 	Notwithstanding anything in this Plan to the
contrary, the minimum payment to an eligible employee under
this Plan shall be one (1) month of Base Compensation and the
maximum payment to an eligible employee shall not exceed 100%
of the employee’s Base Compensation.
	 
	(d)	 	The Change in Control Severance payment shall be
made in a lump sum not later than five (5) business days after
the date of the employee’s termination of employment.






	(2)	 	For purpose of determinations under this paragraph D, “Base
Compensation” shall mean:






	(a)	 	for salaried employees, the employee’s annual
base salary at the rate in effect on his or her termination
date or, if greater, the rate in effect on the date
immediately preceding the Change in Control.
	 
	(b)	 	for employees whose compensation is determined in
whole or in part on the basis of commission income, the
employee’s base salary at termination (or, if greater, the
base salary on date immediately preceding the effective date
of the Change in Control), if any, plus the commissions earned
by the employee in the twelve (12) full calendar months
preceding his or her termination date (or, if greater, the
commissions earned in the twelve (12) full calendar months
immediately preceding the effective date of the Change in
Control).
	 
	(c)	 	for hourly employees, the employee’s total hourly
wages for the twelve (12) full calendar months preceding his
or her termination date or, if greater, the twelve (12) full
calendar months preceding the effective date of the Change in
Control.





F. Withholding.




     All payments will be subject to customary withholding for federal, state
and local tax purposes.



G. Parachute Payment.




     Notwithstanding anything in this Plan to the contrary, if a benefit to a
employee who is a “Disqualified Individual” shall be in an amount which
includes an “Excess Parachute Payment” taking into account payments under this
Plan and otherwise, the benefit under this Plan to that employee shall be
reduced to the maximum amount which does not include an Excess Parachute
Payment. The terms “Disqualified Individual” and “Excess Parachute Payment”
shall have the same meanings as under Section 280G of the Internal Revenue Code
of 1986, as amended, or any successor provision thereto.



3









 





H. Adoption by Affiliates.




     Upon approval by the Board of Directors of the Bank, this Plan may be
adopted by any “Subsidiary” or “Parent” of the Bank. Upon such adoption, the
Subsidiary or Parent shall become an Employer hereunder and the provisions of
the Plan shall be fully applicable to the Employees of that Subsidiary or
Parent. The term “Subsidiary” means any corporation in which the Bank,
directly or indirectly, holds a majority of the voting power of its outstanding
shares of capital stock. The term “Parent” means any corporation which holds a
majority of the voting power of the Bank’s outstanding shares of capital stock.



I. Administration.




     The Plan is administered by the Board of Directors of the Bank, which
shall have the discretion to interpret the terms of the Plan and to make all
determinations about eligibility and payment of benefits. All decisions of the
Board, any action taken by the Board with respect to the Plan and within the
powers granted to the Board under the Plan, and any interpretation by the Board
of any term or condition of the Plan, are conclusive and binding on all
persons, and will be given the maximum possible deference allowed by law. The
Board may delegate and reallocate any authority and responsibility with respect
to the Plan.



J. Source of Payments.




     Unless otherwise determined by the Board of Directors of the Company, all
payments and benefits provided in this Agreement shall be paid or provided
solely by the Bank. Notwithstanding anything in this Agreement to the
contrary, no provision of this Agreement shall be construed so as to result in
the duplication of any payment or benefit. Unless otherwise determined by the
Board of Directors of the Company, the Company’s sole obligation under this
Agreement shall be to unconditionally guarantee the payment and provision of
all amounts and benefits due hereunder to Executive and, if such amounts and
benefits due from the Bank are not timely paid or provided by the Bank, such
amounts and benefits shall be paid or provided by the Company.



K. Inalienability.




     In no event may any Employee sell, transfer, anticipate, assign or
otherwise dispose of any right or interest under the Plan. At no time will any
such right or interest be subject to the claims of creditors, nor liable to
attachment, execution or other legal process.



L. Governing Law.




     The provisions of the Plan will be construed, administered and enforced in
accordance with the laws of the State of Pennsylvania, except to the extent
that federal law applies.



M. Severability.




     If any provision of the Plan is held invalid or unenforceable, its
invalidity or unenforceability will not affect any other provision of the Plan,
and the Plan will be construed and enforced as if such provision had not been
included.



4









 





N. No Employment Rights.




     Neither the establishment nor the terms of this Plan shall be held or
construed to confer upon any employee the right to a continuation of employment
by the Bank, nor constitute a contract of employment, express or implied. The
Bank reserves the right to dismiss or otherwise deal with any employee to the
same extent and on the same basis as though this Plan had not been adopted.
Nothing in this Plan is intended to alter the at-will status of the Bank’s
employees, it being understood that, except to the extent otherwise expressly
set forth to the contrary in an individual employment-related agreement, the
employment of any employee may be terminated at any time by either the Bank or
the employee with or without cause.



O. Amendment and Termination.




     The Plan may be terminated or amended in any respect by resolution adopted
by a majority of the Board of Directors of the Bank, unless a Change in Control
has previously occurred. If a Change in Control occurs, the Plan no longer
shall be subject to amendment, change, substitution, deletion, revocation or
termination in any respect whatsoever. The form of any proper amendment or
termination of the Plan shall be a written instrument signed by a duly
authorized officer or officers of the Bank, certifying that the amendment or
termination has been approved by the Board of Directors. A proper amendment of
the Plan automatically shall effect a corresponding amendment to each
Participant’s rights hereunder. A proper termination of the Plan automatically
shall effect a termination of all employees’ rights and benefits hereunder.



P. Required Provisions.





	(1)	 	In the event any of the foregoing provisions of this Section
16 are in conflict with the terms of this Agreement, this Section 16
shall prevail.
	 
	(2)	 	The Bank’s board of directors may terminate Executive’s
employment at any time, but any termination by the Bank, other than
Termination for Cause, shall not prejudice Executive’s right to
compensation or other benefits under this Agreement. Executive
shall not have the right to receive compensation or other benefits
for any period after Termination for Cause.
	 
	(3)	 	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) or 8(g)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or (g)(1); 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 their
contract obligations were suspended; and (ii) reinstate (in whole or
in part) any of the obligations which were suspended.
	 
	(4)	 	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) or 8(g)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), all obligations of
the Bank under this contract shall terminate as of the effective
date of the order, but vested rights of the contracting parties
shall not be affected.




5









 






	(5)	 	If the Bank is in default as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all
obligations of the Bank under this contract shall terminate as of
the date of default, but this paragraph shall not affect any vested
rights of the contracting parties.
	 
	(6)	 	All obligations under this contract shall be terminated,
except to the extent determined that continuation of the contract is
necessary for the continued operation of the Bank: (i) by the
Director of the OTS (or his designee), at the time the FDIC or the
Resolution Trust Corporation, 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) of the Federal Deposit
Insurance Act, 12 U.S.C. §1823(c); or (ii) by the Director of the
OTS (or his designee) at the time the Director (or his designee)
approves a supervisory merger to resolve problems related to the
operations of the Bank or when the Bank is determined by the
Director 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.
	 
	(7)	 	Any payments made to employees Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. §1828(k) and FDIC regulation 12 C.F.R.
Part 359, Golden Parachute and Indemnification Payments.





     This plan has been approved and adopted by the Board of Directors of the
Bank and is effective as of                    , 2005.



	 	 	 	 	 
	Attest:                                      

	 	By:
	 	                                                         
	

	 	 	 	For the Entire Board of Directors








6