UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,  D.C. 20549





FORM 8-K







CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





Date of Report (Date of earliest event reported): June 19, 2020





CENTRAL FEDERAL CORPORATION

(Exact name of registrant as specified in its charter)









Securities registered pursuant to Section 12(b) of the Act:



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 1.01.Entry into a Material Definitive Agreement.



On June 25, 2020, Central Federal Corporation (the “Company”) and its wholly-owned subsidiary, CFBank, announced that John W. Helmsdoerfer will resign as Executive Vice President and Chief Financial Officer of CFBank and as Chief Financial Officer and Treasurer of the Company effective as of July 8, 2020.  In connection with Mr. Helmsdoerfer’s resignation, the Company and CFBank entered into a Resignation Agreement and General Release with Mr. Helmsdoerfer setting forth the terms of his separation from service with the Company and CFBank (the “Resignation Agreement”). 

Pursuant to the terms of the Resignation Agreement, Mr. Helmsdoerfer will resign as an officer and employee of the Company and CFBank effective at the close of business on July 8, 2020.  Mr. Helmsdoerfer will  assist the Company and CFBank to help transition his job responsibilities, both prior to and after his resignation.  In addition, Mr. Helmsdoerfer agrees to abide by confidentiality and non-disparagement covenants contained in the Resignation Agreement and will also continue to be subject to non-solicitation covenants under his Employment Agreement for a period of one year following his resignation.  Except for such non-solicitation covenants, the Employment Agreement among the Company, CFBank and Mr. Helmsdoerfer will terminate effective upon his resignation.  Mr. Helmsdoerfer also agreed to a release of any and all claims against the Company, CFBank and their affiliates and related parties which in any way relate to Mr. Helmsdoerfer’s employment and association with the Company and CFBank or the termination of that employment and association.

Mr. Helmsdoerfer will be entitled to the following in exchange for his covenants and releases under the terms of the Resignation Agreement: (a) a lump sum payment in the amount of $148,020, less applicable payroll deductions, within 14 days following the effective date of the Resignation Agreement, in respect of Mr. Helmsdoerfer’s salary through the end of the year and the value of certain Company stock; (b) a prorated incentive payment, in an amount to be recommended by the CEO and approved by the Compensation Committee of the Board of Directors of the Company, based on the achievement of Company performance objectives established by the Compensation Committee for the year ending December 31, 2020 under the Central Federal Corporation Incentive Compensation Plan (which incentive payment will not exceed $100,000); and (c) vesting of the remaining portions of the incentive stock options and restricted stock previously awarded to Mr. Helmsdoerfer under the Company’s equity incentive plans. 

The foregoing description of the Resignation Agreement is qualified in its entirety by reference to the Resignation Agreement, which is filed with this Current Report on Form 8-K as Exhibit 10.1.



Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.



As reported under Item 1.01 above, the Company and CFBank announced on June 25, 2020 that John Helmsdoerfer will resign as Executive Vice President and Chief Financial Officer of CFBank and as Chief Financial Officer and Treasurer of the Company effective as of July 8, 2020.  Mr. Helmsdoerfer is resigning for personal reasons and there were no disagreements between Mr. Helmsdoerfer and the Company or CFBank.  His departure is not related to the operations, policies or practices of the Company or CFBank or any issues regarding accounting policies or practices.    

The Board of Directors of the Company and CFBank intends to conduct a search of potential internal and external candidates to replace Mr. Helmsdoerfer.  In the interim, the Company’s President and Chief Executive Officer, Timothy O’Dell, will work with CFBank’s Controller, Kevin Beerman, to assume the duties as principal financial officer and principal accounting officer of the Company.

A copy of the press release announcing Mr. Helmsdoerfer’s resignation is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.



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Item 9.01.  Financial Statements and Exhibits.







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SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.











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Exhibit 10.1



RESIGNATION AGREEMENT AND GENERAL RELEASE

THIS AGREEMENT is entered into as of this 19th day of June, 2020, by and between John W. Helmsdoerfer, for and on behalf of himself and his successors, heirs, family and assigns (“Helmsdoerfer”), Central Federal Corporation, a Delaware corporation (“Central Federal”), and CFBank, a federally chartered savings association (“CFBank”);

WHEREAS, the purpose of this Agreement is to set forth certain understandings which have been reached between Helmsdoerfer, Central Federal, and CFBank;

WHEREAS, Helmsdoerfer has been an employee of CFBank and Central Federal; and

WHEREAS, Helmsdoerfer, Central Federal, and CFBank desire to end the employment relationship between them with a minimum of hardship to Helmsdoerfer and disruption to Central Federal and CFBank.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

1.Helmsdoerfer shall voluntarily resign his employment with CFBank and Central Federal effective at the close of business on July 8, 2020 (the “Resignation Date”).  Helmsdoerfer’s resignation as an employee of CFBank and Central Federal will also constitute his resignation as an officer of both CFBank and Central Federal.

2.CFBank will pay to Helmsdoerfer the gross sum of $148,020.00, which sum represents the total base salary Helmsdoerfer would have received for the period of July 1, 2020 through December 31, 2020, and the estimated value of 1,000 shares of CF Bank stock based on the closing value on June 17, 2020, the business day prior to the date on which this agreement was presented on June 18, 2020.  The payment shall be made as a lump sum, less all applicable payroll deductions, including deductions for federal, state, local and Social Security taxes, as well as any

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withholding required by the benefits provided to Helmsdoerfer pursuant to Paragraph 3 of this Agreement.  The payment shall be made within 14 days of the Effective Date of this Agreement.  Except as expressly provided herein, Helmsdoerfer will not be entitled to receive any other benefits from CFBank or Central Federal following the Resignation Date.

3.Effective as of the Resignation Date, (a) the entire unvested portion of any Restricted Stock previously awarded to Helmsdoerfer under the Central Federal Corporation 2009 Equity Compensation Plan, as amended, and/or the Central Federal Corporation 2019 Equity Incentive Plan (collectively, the “Equity Plans”) shall immediately vest and (b) the entire unvested portion of any Incentive Stock Options previously awarded to Helmsdoerfer under the Equity Plans shall immediately vest, and all such Incentive Stock Options shall be exercisable in accordance with the terms of the Equity Plans and the applicable option award agreement(s); provided, however, that notwithstanding the terms of the Equity Plans or any option award agreement to the contrary, all such Incentive Stock Options shall remain exercisable until the expiration of the applicable option term(s).  In accordance with the Equity Plans and applicable law,  any Incentive Stock Options that are exercised by Helmsdoerfer after three months following the Resignation Date will be treated as nonqualified stock options at the time of exercise.    Central Federal, by and through the Compensation Committee of the Board of Directors of Central Federal, has authorized and approved the vesting of the Incentive Stock Option and the Restricted Stock as provided in this Paragraph 3 and the waiver of any and all forfeitures of the Incentive Stock Options and the Restricted Stock that would otherwise apply under the terms of the Equity Plans and the award agreements applicable thereto.

4.Helmsdoerfer will be entitled to receive an incentive payment, in an amount recommended by the CEO and approved by the Board Compensation Committee, pursuant to the terms of the Central Federal Corporation Incentive Compensation Plan.  Said incentive payment shall

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be paid to Helmsdoerfer on or before March 1, 2021, based on the achievement of Company performance objectives established by the Board Compensation Committee for the year ending December 31, 2020.   Helmsdoerfer shall be eligible to receive no more than 50% of what he would have received had he remained employed through the end of 2020, and in no case shall the payment to Helmsdoerfer be more than $100,000.00.

5.Helmsdoerfer agrees to perform the obligations of his current position through the Resignation Date and to cooperate with and provide reasonable assistance to CFBank and/or Central Federal to help transition his current job responsibilities to designated CFBank and/or Central Federal employees, both during the remainder of his employment and thereafter.

6. Immediately upon the Resignation Date, Helmsdoerfer shall return to CFBank and/or Central Federal any and all property of CFBank and/or Central Federal in his possession including, but not limited to, keys, equipment, all documents and computer files.  Helmsdoerfer agrees that he shall not take, copy, use or reveal to any person in any form or manner, any documents, computer files or information which CFBank and/or Central Federal deems confidential or proprietary, including, but not limited to, financial information, business and strategic plans, and other confidential materials or information.

7.Helmsdoerfer hereby releases and forever discharges CFBank, its operating companies or entities, subsidiary companies or entities, its parent companies or entities (including but not limited to Central Federal, its affiliated companies or entities, their shareholders, officers, directors, trustees, employees, associates, agents, benefit plans, successors and assigns (the “Released Parties”) from any and all claims, demands or rights of action which exist as of the date this Agreement is executed, whether contractual, common law or statutory, whether known or unknown, including but not limited to claims which may in any way relate to Helmsdoerfer’s employment and

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association with CFBank and Central Federal or the termination of that employment and association, including, but not limited to claims arising under the Age Discrimination in Employment Act.

8.Helmsdoerfer shall not voluntarily make any oral or written statements or reveal any information to any person, company, or agency which may be construed to be negative, disparaging or damaging to the reputation or business of any of the Released Parties, or which would interfere in any way with CFBank’s or Central Federal’s business relations with the general public.

9.Helmsdoerfer acknowledges that he has been advised by this writing to consult with an attorney and has had the opportunity to take at least 21 days in which to review and consider this Agreement and to consult with legal counsel with respect thereto.  Helmsdoerfer further acknowledges that he has entered into this Agreement voluntarily and of his own free will.  Helmsdoerfer acknowledges his right to revoke this Agreement within seven days following the execution hereof by giving written notice thereof to CFBank.  In the event of such revocation, this Agreement shall become null and void and no party hereto shall have any rights or obligations hereunder.  If Helmsdoerfer does not revoke this Agreement, this Agreement will become effective on the 8th day following the date on which he was given a copy of the Agreement to review and consider (the “Effective Date”).

10.This Agreement shall not be construed in any manner as an admission by CFBank that it has violated any law, policy or procedure or acted wrongfully with respect to Helmsdoerfer or any other person, or that Helmsdoerfer has any rights whatsoever against CFBank or Central Federal. Helmsdoerfer acknowledges that CFBank and Central Federal specifically disclaim any liability to Helmsdoerfer arising from his employment relationship with CFBank and Central Federal or the termination of that relationship.

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11. The April 22, 2019 Employment Agreement among the parties hereto is hereby terminated and rendered null and void on the Effective Date, except that Section 6 of said Employment Agreement shall remain in full force and effect in accordance with its terms.

12. This Agreement shall be construed under the laws of the State of Ohio.

13. If any amount otherwise payable to Helmsdoerfer pursuant to this Agreement is prohibited or limited by any statute, regulation, order or similar limitation in effect at the time the payments would otherwise be paid, including, without limitation, the requirements of 12 U.S.C. §1828(k) and/or 12 C.F.R. Part 359 (a “Regulatory Limitation”): (i) CFBank shall pay the maximum amount that may be paid under the Regulatory Limitation; and (ii) shall use commercially reasonable efforts to obtain the consent of the appropriate agency or body to pay any amounts that cannot be paid due to the application of the Regulatory Limitation. 

14. This Agreement and the payments hereunder are intended to be exempt, to the greatest extent possible, from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409”) and to the extent not exempt, to comply with the requirements of Section 409A, and the terms of this Agreement shall be construed and administered to give full effect to this intent.

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Signed as of this 19th day of June, 2020.



/s/ Ivory Brown                                          /s/ John W. Helmsdoerfer

Witness                                                        John W. Helmsdoerfer





CFBank





/s/ John Helmsdoerfer                                 By: /s/ Ivory Brown

Witness

                                                                    Its: SVP Human Resources





Central Federal Corporation





/s/ Ivory Brown                                           By: /s/ Timothy O’Dell

Witness

                                                                    Its: President and CEO













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Exhibit 99.1



Parent of CFBank,  NA



CENTRAL FEDERAL CORPORATION ANNOUNCES THE RESIGNATION OF CFO JOHN HELMSDOERFER    



Columbus, Ohio – June 25, 2020 – Central Federal Corporation (NASDAQ: CFBK) (the “Company”), the parent of CFBank, today announced that John W. Helmsdoerfer, Executive Vice President and Chief Executive Officer of CFBank and Chief Financial Officer and Treasurer of the Company, will resign from the Company and CFBank for personal reasons effective July 8, 2020.  In connection with his resignation, the Company, CFBank and Mr. Helmsdoerfer have entered into a Resignation and Release Agreement that provides, among other things, for certain severance payments and benefits in exchange for certain covenants and releases from Mr. Helmsdoerfer.  Mr. Helmsdoerfer has agreed to assist the Company and CFBank to help transition his job responsibilities, both prior to and after his resignation. 



Timothy T. O’Dell, President and CEO, commented, “On behalf of the Board of Directors and management, I would like to thank John for all of his contributions to the Company and CFBank.  John joined us in March of 2013, shortly following the Company’s recapitalization, and has been a valuable member of our team during the significant growth and success we have experienced as an organization over the past seven years.  I have personally had the pleasure to work with John in the banking industry for over 20 years, including the past seven years at CFBank.  We wish John all the best with his future endeavors.”



The Board of Directors of the Company and CFBank intends to conduct a search of potential internal and external candidates to replace Mr. Helmsdoerfer.  In the interim, the Company’s President and Chief Executive Officer, Timothy O’Dell, will work with CFBank’s Controller, Kevin Beerman, to assume the duties as principal financial officer and principal accounting officer of the Company.

The Company noted that there were no disagreements between Mr. Helmsdoerfer and the Company or CFBank and that his departure is not related to the operations, policies or practices of the Company or CFBank or any issues regarding accounting policies or practices.



About Central Federal Corporation and CFBank

Central Federal Corporation is a financial holding company that owns 100% of the stock of CFBank, National Association (CFBank), which was formed in Ohio in 1892 and converted from a federal savings association to a national bank on December 1, 2016. CFBank has a presence in four major metro Ohio markets – Columbus, Cleveland, Cincinnati and Akron- as well as its two branch locations in Columbiana County, Ohio.  Also, in March 2019, CFBank opened a branch location in Blue Ash, Ohio, which is its second location in the Cincinnati market.  CFBank provides personalized Business Banking products and services including commercial loans and leases, commercial and residential real estate loans and treasury management depository services.  As a full service commercial bank, our business, along with our products and services, is focused on serving the banking and financial needs of closely held businesses.  Our business model emphasizes personalized service, customer access to decision makers, quick execution, and the convenience of online internet banking, mobile banking, remote deposit and corporate treasury management.  In addition, CFBank provides residential lending and full service retail banking services and products. 

Additional information about the Company and CFBank is available at www.CFBankOnline.com.

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