Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)Deferred Cash Incentive Agreement between CFBank and Timothy T. O'Dell
On December 29, 2022, CFBank, National Association ("CFBank"), the wholly-owned
subsidiary bank of CF Bankshares Inc. (the "Company"), entered into a Deferred
Cash Incentive Agreement with Timothy T. O'Dell, President and Chief Executive
Officer of the Company and Chief Executive Officer of CFBank (the "DCI
Agreement"). CFBank previously entered into similar Deferred Cash Incentive
Agreements with certain other officers of CFBank. The purpose of the Deferred
Cash Incentive Agreements is to provide deferred cash compensation as an
incentive and reward for contribution to the success of CFBank.
Pursuant to the DCI Agreement, CFBank will determine on an annual basis (1) the
percentage of Mr. O'Dell's annual base salary that may be earned as a deferred
incentive bonus for such year and (2) the performance objectives and thresholds
for attaining the deferred incentive bonus for such year. Based on the
foregoing, CFBank will determine the amount of the deferred incentive bonus
earned by Mr. O'Dell following the end of each year and contribute such amount
to Mr. O'Dell's "deferral account." CFBank, in its sole discretion, may elect to
add additional amounts to the deferral account and may also elect to reduce the
annual deferral amount if certain quality control measures are not achieved. On
an annual basis, the balance in the deferral account will be credited with
interest at a fixed rate determined by CFBank. The deferral account will be
unfunded and represent general unsecured obligations of CFBank, and will be used
solely as a device for measuring amounts to be paid as benefits under the DCI
Agreement.
For 2022, CFBank established four performance objectives for Mr. O'Dell that
were then used as the criteria under the DCI Agreement for Mr. O'Dell: Return on
Assets; Net Interest Margin; Total Loan Growth; and Total Core Deposit
Growth. For each performance objective, a maximum and threshold target was
established. The amount of the award potential for 2022 was set at 20% of Mr.
O'Dell's base salary, resulting in a potential award of $95,000.
Each amount contributed to Mr. O'Dell's deferral account will be payable in a
single-lump sum payment no later than 60 days following the four-year
anniversary of the contribution to the deferral account (the "Normal Annual
Distribution Date"), provided that Mr. O'Dell remains employed with CFBank as of
the Normal Annual Distribution Date. Notwithstanding the foregoing, upon Mr.
O'Dell's attainment of age 75 (the "Final Distribution Age"), CFBank will pay
Mr. O'Dell 100% of the deferral account, regardless of the date any annual
deferral amount was credited to the deferral account, in a single lump-sum no
later than 60 days following Mr. O'Dell's attainment of the Final Distribution
Age.
If Mr. O'Dell's employment with CFBank is terminated prior to attainment of the
Final Distribution Age, Mr. O'Dell will be entitled to receive the benefit in
the deferral account, or a portion of such benefit, as determined by the
Board after taking into account the contributions and service rendered by Mr.
O'Dell to CFBank prior to termination of employment. The amount of such benefit
will be payable in a single lump-sum payment within 60 days following the last
day of the month in which Mr. O'Dell's employment with CFBank was terminated.
In the event of Mr. O'Dell's disability or death while in active service, CFBank
will pay Mr. O'Dell or his designated beneficiary 100% of the deferral account,
regardless of the date any annual deferral amount was credited to the deferral
account, in a single lump-sum no later than 60 days following the last day of
the month in which Mr. O'Dell's disability or death occurred. Similarly, in the
event a change in control of CFBank or the Company occurs (within the meaning of
Internal Revenue Code Section 409A and as described in Treasury Regulations
§§1.409A-3(i)(5)), CFBank will pay Mr. O'Dell or his designated beneficiary 100%
of the deferral account, regardless of the date any annual deferral amount was
credited to the deferral account, in a single lump-sum no later than 60 days
following the last day of the month in which the change of control occurred.
Notwithstanding any provision in the DCI Agreement to the contrary, CFBank will
not pay any benefit under the DCI Agreement if Mr. O'Dell's employment by CFBank
is terminated for "cause" as defined in the DCI Agreement.
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The DCI Agreement includes a "claw-back" provision that authorizes CFBank to
reduce, recover or claw-back any benefits awarded under the agreement as
necessary for CFBank to ensure that such benefits are appropriately balanced to
take into account the risk the participant's activities may pose to CFBank under
safety and soundness concerns.
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