Presdient Employment Agreement - Thomas Swirski

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Agreement, made and dated as of December 27, 2004, by and between City Savings Bank, an Indiana stock savings association (" Employer" ), and Thomas F. Swirski, a resident of LaPorte County, Indiana (" Employee" ).

W I T N E S S E T H:

WHEREAS, Employee is employed by Employer as its President and has made valuable contributions to the profitability and financial strength of Employer;

WHEREAS, Employer desires to encourage Employee to continue to make valuable contributions to Employer' s business operations and not to seek or accept employment elsewhere;

WHEREAS, Employee desires to be assured of a secure minimum compensation from Employer for his services over a defined term;

WHEREAS, Employer desires to assure the continued services of Employee on behalf of Employer on an objective and impartial basis and without distraction or conflict of interest in the event of an attempt by any person to obtain control of Employer or City Savings Financial Corporation (the " Holding Company" ), the Indiana corporation which owns all of the issued and outstanding capital stock of Employer;

WHEREAS, Employer recognizes that when faced with a proposal for a change of control of Employer or the Holding Company, Employee will have a significant role in helping the Boards of Directors assess the options and advising the Boards of Directors on what is in the best interests of Employer, the Holding Company, and its shareholders, and it is necessary for Employee to be able to provide this advice and counsel without being influenced by the uncertainties of his own situation;

WHEREAS, Employer desires to provide fair and reasonable benefits to Employee on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, Employer desires reasonable protection of its confidential business and customer information which it has developed over the years at substantial expense and assurance that Employee will not compete with Employer for a reasonable period of time after termination of his employment with Employer, except as otherwise provided herein.

NOW THEREFORE, in consideration of these premises, the mutual covenants and undertakings herein contained and the continued employment of Employee by Employer as its President, Employer and Employee, each intending to be legally bound, covenant and agree as follows:


1. Upon the terms and subject to the conditions set forth in this Agreement, Employer employs Employee as Employer' s President, and Employee accepts such employment.


2. Employee agrees to serve as Employer' s President and to perform such duties in that office as may reasonably be assigned to him by Employer' s Board of Directors; provided, however, that such duties shall be primarily performed in or from the principal offices of Employer currently located at Michigan City, Indiana, or such substitute or replacement location for the Employer' s principal offices, wherever located; and provided further that such duties shall be of the same general nature and character as those previously performed by Employee and generally associated with the office of President of a stock savings association of a size similar to that of Employer. Employee shall not be required to be absent from the location of the principal executive offices of Employer on travel status or otherwise more than 45 days in any calendar year. Employer shall not, without the written consent of Employee, relocate or transfer Employee to a location more than 30 miles from Employer' s current offices. Employee shall render services to Employer as President in substantially the same manner and to substantially the same extent as Employee rendered his services to Employer before the date hereof. While employed by Employer, Employee shall devote substantially all his business time and efforts to Employer' s business during regular business hours and shall not engage in any other related business. Employer shall nominate the Employee to successive terms as a member of Employer' s Board of Directors and shall use its best efforts to elect and re-elect Employee as a member of such Board. However, securing Employee a membership on Employer' s Board of Directors shall not be an obligation of Employer under this Agreement.

3. The term of this Agreement shall begin on December 27, 2004 (the " Effective Date" ) and shall end on the date which is three years following such date, subject to earlier termination as provided herein (the " Term" ); provided, however, that such term shall be extended automatically for an additional year on each anniversary of the Effective Date if Employer' s Board of Directors determines by resolution that the performance of the Employee has met the Board' s requirements and standards and that this Agreement should be extended prior to such anniversary of the Effective Date, unless either party hereto gives written notice to the other party not to so extend within ninety (90) days prior to such anniversary, in which case no further automatic extension shall occur and the term of this Agreement shall end two years subsequent to the anniversary as of which the notice not to extend for an additional year is given (such term, including any extension thereof, shall herein be referred to as the " Term" ).

4. Employee shall receive an annual salary of $106,050 (" Base Compensation" ) payable at regular intervals in accordance with Employer' s normal payroll practices now or hereafter in effect. Employer may consider and declare from time to time increases in the salary it pays Employee and thereby increases in his Base Compensation. Prior to a Change of Control, Employer may also declare decreases in the salary it pays Employee if the operating results of Employer are less favorable than those for the fiscal year ending June 30, 2001, and Employer makes similar decreases in the salary it pays to other executive officers of Employer. After a Change in Control, Employer shall consider and declare salary increases based upon the following standards:

Inflation;
Adjustments to the salaries of other senior management personnel; and Past performance of Employee and the contribution which Employee makes to the business and profits of Employer during the Term.


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Any and all increases or decreases in Employee' s salary pursuant to this section shall cause the level of Base Compensation to be increased or decreased by the amount of each such increase or decrease for purposes of this Agreement. The increased or decreased level of Base Compensation as provided in this section shall become the level of Base Compensation for the remainder of the Term of this Agreement until there is a further increase or decrease in Base Compensation as provided herein.

5. So long as Employee is employed by Employer pursuant to this Agreement, he shall be included as a participant in all present and future employee benefit, retirement, and compensation plans generally available to executive employees of Employer, consistent with his Base Compensation and his position as President of Employer, including, without limitation, Employer' s or the Holding Company' s 401(k) plan, Stock Option Plan, Recognition and Retention Plan and Trust, Employee Stock Ownership Plan, hospitalization, and group life insurance plans, each of which Employer agrees to continue in effect on terms no less favorable than those currently in effect as of the date hereof (as permitted by law) during the Term of this Agreement unless prior to a Change of Control the operating results of Employer are less favorable than those for the fiscal year ending June 30, 2001. Notwithstanding anything contained herein to the contrary, if the Employer' s Board of Directors determines that (either before or after a Change of Control) the accounting, legal, or tax treatment of such plans would adversely affect Employer' s operating results or financial condition in a material way, and the Board of Directors of Employer or the Holding Company concludes that modifications to such plans need to be made to avoid such adverse effects, then the Board of Directors may amend, alter or revoke such plans, including Employee' s plans, proportionately.

6. So long as Employee is employed by Employer pursuant to this Agreement, Employee shall receive reimbursement from Employer for all reasonable business expenses incurred in the course of his employment by Employer, upon submission to Employer of written vouchers, statements, bills, receipts or other documentation as required by Employer' s policy regarding reimbursement by executive employees or, in the absence of such policy, as reasonably requested by the Employer' s Board of Directors. Employee shall attend, upon the prior approval of Employer' s Board of Directors, those professional meetings, conventions, and/or similar functions that he deems appropriate and useful for purposes of keeping abreast of current developments in the industry and/or promoting the interests of Employer. So long as Employee is employed by Employer pursuant to the terms of this Agreement, Employer shall continue in effect vacation policies applicable to Employee no less favorable from his point of view than those written vacation policies in effect on the date hereof. So long as Employee is employed by Employer pursuant to this Agreement, Employee shall be entitled to office space and working conditions no less favorable than were in effect for him on the date hereof.

7. Subject to the respective continuing obligations of the parties, including, but not limited to, those set forth in subsections 9(A), 9(B), 9(C) and 9(D) hereof, Employee' s employment by Employer may be terminated prior to the expiration of the Term of this Agreement as follows:
(A) Employer, by action of its Board of Directors and upon written notice to Employee, may terminate Employee' s employment with Employer immediately for cause. For purposes of this subsection 7(A), " cause" shall be defined as (i) personal dishonesty, (ii) incompetence, (iii) material misconduct, (iv) breach of fiduciary duty involving personal profit, (v) failure to perform duties required by


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his employment or failure to perform duties of his position, (vi) willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or fin ...