HOME CITY FINANCIAL CORP
8-K, 2000-12-06
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED
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                      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): December 1, 2000


                       HOME CITY FINANCIAL CORPORATION
                       -------------------------------
          (Exact name of registrant as specified in its charter)



                    OHIO                                 0-21809
----------------------------------------------     ---------------------
(State or other jurisdiction of incorporation)     (Commission File No.)


                                     34-1839475
                               -----------------------
                               (IRS Employer I.D. No.)




63 W. Main Street, Springfield, Ohio                45502
----------------------------------------           ---------
(Address of principal executive offices)           (Zip Code)


Registrant's telephone number, including area code:  (937) 324-5736
                                                     --------------
<PAGE>

Item 5.      Other Events.
-------      -------------
     Home City Insurance Agency, Inc., an Ohio corporation ("Home City
Agency") and a wholly owned subsidiary of Home City Financial Corporation, an
Ohio corporation ("HCFC"), both located in Springfield, Ohio, closed effective
December 1, 2000, its acquisition of the business of Rice Insurance Agency,
Inc., an Ohio corporation ("Rice").  A copy of the Asset Sale and Purchase
Agreement pursuant to which the transaction was consummated is attached hereto
as Exhibit 2 (the "Agreement").  The following summary of some of the material
terms and conditions of the Agreement is qualified in its entirety by
reference to Exhibit 2.

     In accordance with the terms and subject to the conditions of the
Agreement, the book of business and certain other assets were transferred to
Home City Agency in consideration and exchange for $108,921 paid in cash at
closing.  In addition, the sole shareholder, sole director and President of
Rice has executed an Agreement Not to Compete, for which he will receive upon
his retirement in 2003 $390,000, plus interest accruing until his retirement,
to be paid over a ten-year period.  Home City Agency is leasing the building
in Springfield currently occupied by Rice and has employed all Rice employees.

Item 7.      Financial Statements and Exhibits.
             ----------------------------------

             (a) and (b).  Not applicable.
             (c)     Exhibits.
                     See Index to Exhibits.

<PAGE>

                                 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 thereunto duly authorized.


                              HOME CITY FINANCIAL CORPORATION



                              By:      /s/ Douglas L. Ulery
                                       --------------------
                                       Douglas L. Ulery, President


Date:  December 1, 2000

<PAGE>

                              INDEX TO EXHIBITS
                              -----------------


Exhibit Number                    Description
--------------                    -----------

     2     Asset Sale and Purchase Agreement, dated August 24, 2000, by and
           among Home City Financial Corporation, Rice Insurance Agency, Inc.,
           and Home City Insurance Agency, Inc.

<PAGE>


                                    EXHIBIT 2

                         ASSET SALE AND PURCHASE AGREEMENT
                         ---------------------------------

     This ASSET SALE AND PURCHASE AGREEMENT (the "Agreement") is made
effective as of the 24th day of August, 2000, by and between Rice Insurance
Agency, Inc., an Ohio corporation with its principal office located in
Springfield, Ohio (hereinafter referred to as "Selling Agency"), and Home City
Financial Corporation, an Ohio corporation with its principal office located
in Springfield, Ohio (hereinafter referred to as "Home City") on behalf of
itself and Home City Insurance Agency, Inc., a wholly-owned subsidiary of Home
City to be organized under the laws of the State of Ohio ("Purchasing
Agency"), to which Purchasing Agency shall become a party;

                                W I T N E S S E T H:
     WHEREAS, Selling Agency presently operates an insurance agency with an
office located in Springfield, Ohio;

     WHEREAS, Selling Agency, as an insurance agency, has developed in the
Springfield, Ohio, area a customer base for the sale of property and casualty
insurance, life and accident and health insurance in the Springfield, Ohio,
area; and

     WHEREAS, Home City desires to form Purchasing Agency as a wholly owned
insurance agency subsidiary, which would purchase the rights to income (except
as set forth in Section 1.02 of this Agreement) related to all customers of
Selling Agency as of the date of Closing, including, but not limited to,
regular commissions and override commissions (collectively, the
"Commissions"), to first become due and receivable on or after the date of the
Closing described in Section 3.01 of this Agreement (the "Book of Business"),
and Selling Agency desires to sell the Book of Business, in accordance with
the terms and conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the premises and the representations,
warranties and covenants hereinafter contained, intending to be legally bound,
the parties hereto agree as follows:

     ARTICLE ONE:  Sale and Purchase of Assets
     -----------------------------------------

     1.01.     Selling Agency hereby agrees to assign, sell, transfer and
convey to Purchasing Agency, and Home City agrees to cause Purchasing Agency,
to purchase and accept, on the terms and conditions hereinafter set forth, (a)
the Book of Business; (b) all rights and obligations of Selling Agency under
its agreement with AMS Services, Inc., dated December 29, 1998, for the
licensing of computer software (the "AMS Contract"); (c) the Trademark Rights
(hereinafter defined); and (d) the goodwill of the Selling Agency in the
Springfield, Ohio, area ("Goodwill").  It is hereby agreed that Selling Agency
will not assign, sell, transfer and convey to Purchasing Agency any other
business of Selling Agency or any other asset of Selling Agency.  For purposes
of this Agreement, the term "Trademark Rights" means all material trademarks
and service marks, domain names, corporate names and trade names used by
Selling Agency containing the word "Rice" and any material trade dress
associated therewith, in each case used principally in connection with the
Book of Business.

<PAGE>

     1.02.     Other than the Commissions on the Book of Business to become
earned and receivable on or after the date of the Closing, the Commissions of
Selling Agency are not a part of the assets being sold to Purchasing Agency
under this Agreement and shall be maintained and collected by Selling Agency
without any obligation to or upon Purchasing Agency.  Any payments made by
insurance companies to Selling Agency or Purchasing Agency within the first
year after the Closing that are designated as profit sharing payments shall
constitute part of the Book of Business on a pro rata basis, based upon the
commissions paid by that insurance company that became earned and receivable
after the Closing.  Purchasing Agency shall promptly pay to Selling Agency
Selling Agency's pro rata share of any profit sharing payments received by
Purchasing Agency.

     1.03.     All liabilities of Selling Agency, including, but not limited
to, long-term and trade accounts, shall remain the sole obligation of Selling
Agency, except that Purchasing Agency shall assume all liabilities of Selling
Agency pursuant to the AMS Contract.  Purchasing Agency shall not assume any
accounts payable or other liabilities of any type.

     ARTICLE TWO:  Price and Payment
     -------------------------------
     2.01.     In consideration for the sale and transfer of the Book of
Business, the AMS Contract, the Trademark Rights and Goodwill, Purchasing
Agency shall pay to Selling Agency in immediately available funds at Closing,
pursuant to the terms and conditions set forth herein, the sum of one hundred
thousand dollars ($100,000), plus a pro rated portion of the expenses listed
on Exhibit 7 to this Agreement that were paid by Selling Agency prior to the
Closing (collectively, the "Purchase Price").

     2.02.     No part of the Purchase Price shall be deemed to be a payment
for the sale and transfer of Goodwill.

     ARTICLE THREE:  Closing
     -----------------------

     3.01.     The Closing shall take place at the offices of the Selling
Agency as soon as practicable after the receipt by the Purchasing Agency of
required licenses from the Ohio Department of Insurance, at such time as shall
be agreeable to Home City and Selling Agency; provided, however, that if all
consents, waivers and approvals have not been obtained by such date, the
Closing shall take place one week after the last required consent, waiver or
approval has been obtained.

     ARTICLE FOUR:  Representations, Warranties and Covenants of Selling
                    Agency
                    -----------------------------------------------------

     Selling Agency represents, warrants and covenants to Purchasing Agency
and Home City as follows:

     4.01.     All of the outstanding common shares of the Selling Agency are
owned by Kenneth Richard Rice.

     4.02.     Selling Agency is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio.

<PAGE>

     4.03.     This Agreement has been duly executed and delivered by Selling
Agency.  Selling Agency has all requisite corporate power and authority to
enter into this Agreement and to perform all of its obligations hereunder, and
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action by Selling Agency.  This Agreement is the valid and binding
agreement of Selling Agency, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general applicability affecting the
enforcement of creditors' rights generally and the effect of rules of law
governing specific performance, injunctive relief and other equitable remedies
on the enforceability of such documents.

     4.04.     Subject to required consents under agreements with insurance
companies with which Selling Agency does business and consent under the AMS
contract, the execution and delivery of this Agreement by Selling Agency and
the performance of its obligations hereunder do not result in a breach of or
constitute a default under any agreement or instrument to which Selling Agency
is a party or by which it is bound.

     4.05.     Selling Agency is not a party to any pending or known
threatened litigation or governmental proceeding or inquiry of any nature;
Selling Agency is not subject to any order, judgment, decree, stipulation or
consent or agreement with any governmental body or agency to which it is or
was a party; and to the best of its knowledge, its conduct of the property and
casualty insurance, life, accident and health insurance business does not
violate any applicable state insurance or other law, ordinance, rule or
regulation.

     4.06.     Exhibit 5 lists (a) all material trademarks and service marks
and all registrations and applications pertaining thereto (including all
documents or files pertaining thereto), and all domain names, corporate names
and trade names used by Selling Agency containing the word "Rice;" and (b) any
material trade dress associated therewith.  To the knowledge of Selling
Agency, Selling Agency owns and has the full right to use and transfer the
Trademark Rights free and clear of any encumbrances; none of the Trademark
Rights infringe the trademark rights of third parties; and no claim by third
parties with regard to the use of any of the Trademark Rights have been
threatened or are valid and subsisting.

     4.07     Selling Agency has retained no brokers, finders or other similar
selling agents and is not obligated to pay the fees or commissions of any such
person in connection with the sale of the Book of Business, the Trademark
Rights and Goodwill to Purchasing Agency under this Agreement.

     4.08.     Selling Agency is the owner of the Book of Business and will
transfer to Purchasing Agency all rights to the Book of Business and AMS
Contract free and clear of any liens, encumbrances or claims of any sort.

     4.09.     During the period beginning with the effective date of the
Closing and ending ten years from the date of this Agreement, Selling Agency
shall not, and it shall not cause any employee, agent, officer, director or
Affiliate (hereinafter defined) of Selling Agency to, without the prior
written consent of the Purchasing Agency:

<PAGE>

     (a)      within Clark County or with respect to any resident of or
              business located in Clark County

              (1)      directly or indirectly engage in,

              (2)      assist or have an active interest in (whether as
                       proprietor, partner, investor, member, shareholder,
                       officer, director or any type of principal
                       whatsoever), or

              (3)      act as agent for, or advisor or consultant to, any
                       Person (hereinafter defined) which is or is about to
                       become, directly or indirectly, engaged

               in the business of selling as an agent property and casualty
               insurance,life, accident or health insurance (except as set
               forth in this Agreement), whether as an agent, broker, marketer
               or insurance agency manager, director, officer, consultant or
               otherwise, and/or any and all of the related businesses and
               services, provided by, or under development by, Purchasing
               Agency; nor

    (b)     knowingly permit any employee, agent, officer, director or
            Affiliate of Selling Agency to, directly or indirectly, solicit,
            divert, take away or interfere with, or attempt to solicit, divert,
            take away or interfere with, the relationship of Purchasing Agency
            with any Person whose insurance contracts are included in the Book
            of Business, regardless of where the Person is located or the
            office from which the business was solicited.

     The foregoing provisions of this Section 4.09 are not intended to
prohibit, and shall not prohibit, Selling Agency from purchasing, for
investment purposes only, any stock or other security, so long as such stock
or other security owned by Selling Agency does not represent more than five
percent (5%) of the market value or voting power of the total stock or other
corporate securities of that class.

     For purposes of this Section 4.09, the term "Person" means any
individual, corporation, partnership, association, limited liability company,
limited liability partnership, trust, unincorporated organization, reciprocal
insurer, or any other business organization, or any combination of the
foregoing acting in concert.

     For purposes of this Section 4.09, an "Affiliate" of a person shall mean
(i) any natural person, organization or entity of any type that directly, or
indirectly through one or more intermediaries, controls, is controlled by or
is under common control with, such specified person; (ii) any relative or
spouse of such person, or any relative of such spouse, any one of whom has the
same home as such person; (iii) any trust or estate in which such person or
any of the persons specified in (ii) collectively own ten percent or more of
the total beneficial interest or of which any of such persons serve as
trustee, executor or in any similar capacity; or (iv) any corporation or other
organization in which such person or any of the persons specified in (ii) are
the beneficial owners collectively of ten percent or more of any class of
equity securities or ten percent or more of the equity interest.  For purposes
of the definition of the term "Affiliate," "control" means the power to direct
the management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.

<PAGE>

     If the scope of any restriction contained in this Section 4.09 is too
broad to permit enforcement of any such restriction to its fullest extent,
then such restriction shall be enforced to the maximum extent permitted by
law, and Selling Agency hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to enforce such
restrictions.

     4.10.     Between the date of this Agreement and the Closing, Selling
Agency shall conduct its insurance business in the normal course and shall use
its best efforts to preserve for Purchasing Agency the goodwill of Selling
Agency's customers and others having relations with the business normally
conducted by Selling Agency.

     4.11.     Selling Agency shall (1) not, directly or indirectly, solicit
or initiate any proposals or offers from any person or entity, or discuss or
negotiate with any such person or entity, regarding any acquisition or
purchase of all or a material amount of the assets of, any equity securities
of, or any merger, consolidation or business combination with, Selling Agency
(collectively, "Acquisition Transactions"), (2) not disclose to any person any
information not customarily disclosed publicly or provide access to its
properties, books or records or otherwise assist or encourage any person in
connection with any of the foregoing, and (3) give Home City prompt notice of
any such inquiries, offers or proposals.  If Selling Agency fails to act in
accordance with this subsection and within one year after the date of this
Agreement executes a letter of intent or a definitive agreement in respect of
an Acquisition Transaction with another party, Selling Agency shall pay to
Home City $30,000 in immediately available federal funds within two days after
the execution of such letter of intent or definitive agreement.

     4.12     Selling Agency is not currently in breach of the AMS Contract
and owes no sum pursuant to the AMS Contract except monthly support fees not
due until after the effective date of this Agreement and the transfer fees due
upon assignment of the AMS Contract.

     ARTICLE FIVE:  Representations, Warranties and Covenants of Home City and
                    Purchasing Agency
                    ----------------------------------------------------------

     Home City, on behalf of itself and Purchasing Agency, represents and
warrants to Selling Agency as follows:

     5.01.     Home City is a corporation duly organized, validly existing and
in good standing under the laws of the State of Ohio.

     5.02.     This Agreement has been duly executed and delivery by Home
City.  Home City has all requisite corporate power and authority to enter into
this Agreement and to perform all of its obligations hereunder, and the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action of Home City.  This Agreement is the valid and binding
agreement of Home City, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws of general applicability affecting the enforcement of
creditors' rights generally and the effect of rules of law governing specific

<PAGE>

performance, injunctive relief and other equitable remedies on the
enforceability of such documents.

     5.03.     At the time this Agreement is executed and delivered by
Purchasing Agency, (a) it will be duly executed and delivered by Purchasing
Agency; (b) Purchasing Agency will have all requisite corporate power and
authority to enter into this Agreement; (c) the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will
have been duly authorized by all necessary corporate action of Purchasing
Agency, except to the extent Purchasing Agency must be licensed as an
insurance agency by the Ohio Department of Insurance; and (d) this Agreement
will be the valid and binding agreement of Purchasing Agency, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
applicability affecting the enforcement of creditors' rights generally and the
effect of rules of law governing specific performance, injunctive relief and
other equitable remedies on the enforceability of such documents.

     5.04.     The execution and delivery of this Agreement by Home City and
Purchasing Agency and the performance of their obligations hereunder do not
result in a breach of or constitute a default under any agreement or
instrument to which either Home City or Purchasing Agency is a party or by
which it is bound.

     5.05.     Home City has retained no brokers, finders or other agents and
is not obligated to pay the fees or commission of any such person in
connection with its purchase of the assets under this Agreement.

     5.06.     At or prior to the Closing, Purchasing Agency will be a
corporation duly organized, validly existing and in good standing under the
laws of the State of Ohio, with required insurance licenses.

     5.07.     Home City and Purchasing Agency shall use their best efforts to
obtain for Purchasing Agency all licenses required by the State of Ohio to
consummate the transactions contemplated by this Agreement.

     5.08.     Purchasing Agency shall offer employment to all employees of
Selling Agency as of the effective date of this Agreement.

     ARTICLE SIX:  Conditions to Obligations of Home City and Purchasing
                   Agency
                   -----------------------------------------------------

     The obligations of Home City and Purchasing Agency to be performed by
them under this Agreement at the Closing shall be subject to each and every
one of the following conditions precedent:

     6.01.     All of the representations and warranties of Selling Agency set
forth in this Agreement shall be true and correct as of the date of the
Closing, and Selling Agency shall have performed and completed all agreements
and undertakings required to be performed or completed by it on or prior to
the Closing.

<PAGE>

     6.02.     Purchasing Agency shall have received from Selling Agency a
Bill of Sale legally sufficient to transfer to Purchasing Agency all ownership
rights in the Book of Business, the Trademark Rights and the AMS Contract,
together with such other assignments and instruments of transfer as shall be
required or desirable to effectuate the transactions contemplated by this
Agreement, all in form and content satisfactory to Purchasing Agency.

     6.03.     All permits, approvals, consents, authorizations, exemptions or
waivers of any federal or state governmental body or agency necessary or
appropriate for consummation of the transactions contemplated by this
Agreement shall have been obtained and all notices required to be filed shall
have been filed and any objection or waiting period with respect to such
notice shall have expired.  All waivers, consents and approvals of every
person necessary or appropriate for the consummation of the transactions
contemplated by this Agreement shall have been obtained, and none of such
waivers, consents and approvals shall contain any term or condition which, in
the judgment of Home City, individually or in the aggregate, would materially
reduce the value of the Book of Business, Trademark Rights and Goodwill to
Purchasing Agency.  Each of the insurance companies identified on Exhibit 3 to
this Agreement shall have consented to the transfer of the Book of Business to
Purchasing Agency and shall have executed prior to the Closing an agreement
with Purchasing Agency.  AMS Services, Inc., shall have consented to the
assignment and transfer of the AMS Contract to Purchasing Agency at a cost to
Purchasing Agency of not more than $1,900.

     6.04.     There shall not be in effect any federal or state law, rule or
regulation or any order or decision of a court of competent jurisdiction that
prevents or materially delays the consummation of the transactions
contemplated by this Agreement.

     6.05.     There shall not be any action or proceeding commenced by or
before any court or governmental agency or authority in the United States, or
threatened by any governmental agency or authority in the United States, that
challenges or seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or seeks to impose material limitations on the
ability of Purchaser to exercise full rights of ownership of the Book of
Business, Trademark Rights or Goodwill.

     6.06.     Kenneth Richard Rice and Purchasing Agency shall have executed
and delivered an Agreement Not to Compete in the form attached hereto as
Exhibit 4, to be effective at the effective time of the Closing.

     6.07.     Kenneth Richard Rice, William Nelson and Teresa Rinker shall
have executed and delivered to Purchasing Agency employment agreements in the
forms attached hereto as Exhibit 1, to be effective at the effective time of
the Closing.

     6.08.     Purchasing Agency, Kenneth Richard Rice and V. Carol Rice shall
have executed a Lease in the form attached hereto as Exhibit 2 for the use of
the premises and personal property located at 1110 North Plum Street,
Springfield, Ohio.

     6.09.     Kenneth Richard Rice shall have remained the sole shareholder
of Selling Agency and shall have signed and delivered an action in writing
approving this Agreement and the transactions contemplated hereby.

<PAGE>

     6.10.     Selling Agency shall have delivered to Purchasing Agency and
Home City (a) a certificate of the President of Selling Agency dated the day
of the Closing certifying to the fulfillment of the conditions set forth in
Sections 6.01, 6.03, 6.04 and 6.05 of this Agreement; (b) an executed, valid
and legally sufficient Certificate of Amendment to Selling Agency's Articles
of Incorporation changing its name to a name not including the word "Rice" or
any word similar thereto; (c) a consent to permit Purchasing Agency to use the
corporate or trade name of Rice Insurance Agency or a name similar thereto,
such consent to be in the form of Exhibit 6 hereto; and such other
certificates and documents to evidence the taking of requisite actions in
connection with this Agreement as Home City may reasonably request.

     6.11.     Purchasing Agency shall have obtained all licenses necessary
for its operation of the business of selling as agent property and casualty,
life and accident and health insurance.

     ARTICLE SEVEN:  Conditions to Obligations of Selling Agency
     -----------------------------------------------------------
     The obligations of Selling Agency to be performed by it under this
Agreement at the Closing shall be subject to the following conditions
precedent:

     7.01.     All of the representations and warranties of Home City and
Purchasing Agency set forth in this Agreement shall be true and correct as of
the date of the Closing, and Home City and Purchasing Agency shall have
performed and completed all agreements and undertakings required to be
performed or completed by them on or prior to the Closing.

     7.02.     All permits, approvals, consents, authorizations, exemptions or
waivers of any federal or state governmental body or agency necessary or
appropriate for consummation of the transactions contemplated by this
Agreement shall have been obtained and all notices required to be filed shall
have been filed and any objection or waiting period with respect to such
notice shall have expired.  All waivers, consents and approvals of every
person necessary or appropriate for the consummation of the transactions
contemplated by this Agreement shall have been obtained.

     7.03.     There shall not be in effect any federal or state law, rule or
regulation or any order or decision of a court of competent jurisdiction that
prevents or materially delays the consummation of the transactions
contemplated by this Agreement.

     7.04.     There shall not be any action or proceeding commenced by or
before any court or governmental agency or authority in the United States, or
threatened by any governmental agency or authority in the United States, that
challenges or seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement.

     7.05.     Kenneth Richard Rice and Purchasing Agency shall have executed
an Agreement Not to Compete in the form attached hereto as Exhibit 4, to be
effective at the effective time of the Closing.

<PAGE>

     7.06.     Purchasing Agency shall have executed and delivered to Kenneth
Richard Rice, William Nelson and Teresa Rinker employment agreements in the
forms attached hereto as Exhibit 1, to be effective at the effective time of
the Closing.

     7.07.     Purchasing Agency, Kenneth Richard Rice and V. Carol Rice shall
have executed a Lease in the form attached hereto as Exhibit 2 for the use of
the premises and personal property located at 1110 North Plum Street,
Springfield, Ohio.

     7.08.     Each of Purchasing Agency and Home City shall have delivered to
Selling Agency a certificate of its President dated the day of the Closing
certifying to the fulfillment of the conditions set forth in Sections 7.01,
7.02, 7.03 and 7.04 of this Agreement and such other certificates and
documents to evidence the taking of requisite actions in connection with this
Agreement as Selling Agency may reasonably request.

     ARTICLE EIGHT:  Miscellaneous
     -----------------------------

     8.01.     Whether or not the transactions contemplated by this Agreement
are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.

     8.02.     At all times from the date of this Agreement until the Closing,
each party shall promptly notify the other of the occurrence of any event or
the failure of any event to occur which might reasonably be expected to result
in a breach of or a failure to comply with any representation, warranty,
covenant, condition or agreement contained in this Agreement or of the
commencement of any action, suit, proceeding or investigation against it.

     8.03.     Any notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given when
mailed by United States registered or certified mail, postage prepaid, to the
following address:

     If to Home City or
     Purchasing Agency:     Home City Financial Corporation
                            63 W. Main Street
                            Springfield, Ohio 45502
                            Attention: Douglas L. Ulery

     If to Selling Agency:  Rice Insurance Agency, Inc.
                            537 Rensselaer Street
                            Springfield, Ohio 45503

Either party hereto may change its address for notification purposes by giving
notice thereof in writing, as described above.

     8.04.     Selling Agency shall, at the Closing, deliver to Purchasing
Agency all documents maintained by Selling Agency and necessary for normal
business operations in connection with the assets transferred hereunder.

<PAGE>

     8.05.     All representations, warranties, covenants and agreements,
included or provided in this Agreement or in any exhibit hereto or instrument
of transfer or other certificate or document delivered pursuant hereto, shall
survive the Closing.

     8.06.     Each party hereto shall from time to time after Closing, at the
reasonable request of the other and without further consideration, execute and
deliver such further instruments of conveyance, assignment and transfer or
other documents, and take such action as the other may reasonably request, in
order more effectively to assign, sell, convey and transfer the assets
conveyed hereunder and otherwise to effect the objectives hereof.

     8.07.     This Agreement constitutes the entire agreement between the
parties and there are no representations, warranties or commitments except as
provided herein.  Except as specifically herein provided, this Agreement
supersedes all prior agreements, understandings, negotiations and discussions,
whether written or oral.  This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors, assigns
and heirs.  Nothing in this Agreement is intended or shall be construed to
confer upon or to give any person other than the parties hereto, and their
successors and assigns, any rights or remedies upon or by reason of this
Agreement.  This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which taken together shall be
deemed to be a single agreement.

     8.08.     No exercise or waiver, in whole or in part, of any right or
remedy provided for in this Agreement shall operate as a waiver of any other
right or remedy.  No delay on the part of any party in the exercise of any
right or remedy shall operate as a waiver thereof.

     8.09.     No provision of this Agreement may be waived, changed, modified
or discharged orally, but only by an agreement in writing signed and executed
by all parties to this Agreement.

     8.10.     Selling Agency shall reasonably cooperate with and, at the
request of Home City, assist Home City and Purchasing Agency in obtaining the
licensing of Purchasing Agency, the appointment of Purchasing Agency by the
insurance companies involved and the assignment of the AMS Contract.

     8.11.     This Agreement may be terminated by the Board of Directors of
either Selling Agency or Home City if it determines in good faith that any of
the conditions set forth in this Agreement is impossible to satisfy and has
not been waived by the other party or by the Board of Directors of either
Selling Agency or Home City if the Closing shall not have occurred by the
close of business on October 31, 2000; provided that the right to terminate
shall not be available to any party whose failure to perform any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
transactions contemplated hereby to be consummated by such date.

     8.12.     Selling Agency, Home City and Purchasing Agency shall consult
with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or the transactions
contemplated hereunder and shall not issue any such press release or make any
such public statement without obtaining the prior consent of the other

<PAGE>

parties, except as may be required by law or by obligations pursuant to Home
City's agreement with The Nasdaq Stock Market.

     IN WITNESS WHEREOF, Home City and Selling Agency hereto have caused this
Agreement to be executed as of the date first above written.

HOME CITY FINANCIAL CORPORATION
(on behalf of itself and Home City Insurance
Agency, Inc., to be organized)                   RICE INSURANCE AGENCY, INC.

By:  ___________________________                 By: _______________________

Its: ___________________________                 Its:_______________________



HOME CITY INSURANCE AGENCY, INC.
(to be organized)

By:  ___________________________

Its: ___________________________

<PAGE>

                                     EXHIBIT 1
                                EMPLOYMENT AGREEMENT


     THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into as of the
___ day of ___________, 2000, by and among Home City Insurance Agency, Inc.,
an Ohio corporation (the "EMPLOYER"); and Kenneth Richard Rice, an individual
(the "EMPLOYEE");

WITNESSETH:

     WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of the EMPLOYER desire for the EMPLOYER to
retain the services of the EMPLOYEE as Vice President and as an agent for the
sale of insurance as an employee of the EMPLOYER;

     WHEREAS, the EMPLOYEE desires to serve as Vice President and as an agent
for the sale of insurance as an employee of the EMPLOYER; and

     WHEREAS, the EMPLOYER and the EMPLOYEE desire to enter into this
AGREEMENT to set forth the terms and conditions of the employment relationship
between the EMPLOYER and the EMPLOYEE;

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYER and the EMPLOYEE hereby agree as follows:

     1.     Employment and Term.  Upon the terms and subject to the conditions
            --------------------
of this AGREEMENT, the EMPLOYER hereby employs the EMPLOYEE, and the EMPLOYEE
hereby accepts employment, as Vice President and as a sales agent of the
EMPLOYER.  The TERM of this AGREEMENT shall commence on _____________, 2000,
and shall end on June 1, 2003 (the "TERM"), subject to earlier termination as
provided herein.

     2.     Duties of EMPLOYEE.
            -------------------
     (a)    General Duties and Responsibilities.  The EMPLOYEE shall serve as
            ------------------------------------
the Vice President and as a sales agent of the EMPLOYER.  Subject to the
direction of the Board of Directors of the EMPLOYER, the EMPLOYEE shall
perform all duties and shall have all powers which are commonly incident to
the position of Vice President and sales agent or which, consistent therewith,
are delegated to him by the Board of Directors or the President.

     (b)    Devotion of Entire Time to the Business of the EMPLOYER.  The
            --------------------------------------------------------
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
duties to the EMPLOYER.

     3.     Compensation.  The EMPLOYEE shall receive the following
            -------------
compensation, benefits and expense reimbursements during the TERM:

<PAGE>

     (a)     Salary.  The EMPLOYEE shall receive an annual salary of $50,000
             -------
paid in equal installments not less often than monthly.

     (b)     Expenses.  The EMPLOYEE shall receive reimbursement for all
             ---------
reasonable travel, entertainment, mileage and miscellaneous expenses incurred
in connection with the performance of his duties under this AGREEMENT.  Such
reimbursement shall be made in accordance with the existing policies and
procedures of the EMPLOYER pertaining to reimbursement of expenses to senior
management officials or insurance agents.  Such reimbursable expenses shall
include expenses necessary for the maintenance of required insurance
licenses.

     (c)     Benefits.  The EMPLOYEE shall be entitled to participate in all
             ---------
formally established employee benefit, bonus, pension and profit-sharing plans
and similar programs that are maintained by the EMPLOYER or Home City Federal
Savings Bank of Springfield (the "BANK") from time to time, including programs
in respect of group health, disability or life insurance, and all employee
benefit plans or programs hereafter adopted in writing by the Board of
Directors of the EMPLOYER or the BANK, for which all full-time EMPLOYER
personnel or BANK personnel are eligible, except any employee stock ownership
plan (collectively, the "BENEFIT PLANS").  Notwithstanding any statement to
the contrary contained elsewhere in this AGREEMENT, the EMPLOYER may
discontinue or terminate at any time any such BENEFIT PLANS now existing or
hereafter adopted, to the extent permitted by the terms of such plans and
applicable law, and shall not be required to compensate the EMPLOYEE for such
discontinuance or termination, and the  EMPLOYER shall not be required to
provide to the EMPLOYEE or to continue to provide to the EMPLOYEE any such
BENEFIT PLAN pursuant to which the EMPLOYER cannot obtain coverage for the
EMPLOYEE.

     (d)     Vacation and Sick Leave.  The EMPLOYEE shall be entitled, without
             ------------------------
loss of pay, to be absent voluntarily from the performance of his duties under
this AGREEMENT, subject to the following conditions:

             (i)     The EMPLOYEE shall be entitled to four weeks of annual
                     vacation and annual sick leave in accordance with the
                     policies periodically established by the Board of
                     Directors of the EMPLOYER; and

            (ii)     In addition to paid vacations and sick leave, the EMPLOYEE
                     shall be entitled, without loss of pay, to absent himself
                     voluntarily from the performance of his employment with the
                     EMPLOYER for such additional period of time and for such
                     valid and legitimate reasons as the Board of Directors
                     may, in its discretion, determine, and the Board of
                     Directors may grant to the EMPLOYEE a leave or leaves of
                     absence, with or without pay, at such time or times and
                     upon such terms and conditions as such Board of Directors,
                     in its discretion, may determine.

     (e)    Directors' and Officers' and Errors and Omissions Insurance.
            ------------------------------------------------------------
EMPLOYER shall obtain and maintain appropriate and reasonable directors' and

<PAGE>

officers' and errors and omissions insurance covering the services rendered by
the EMPLOYEE to and on behalf of EMPLOYER pursuant to this AGREEMENT.

     4.     Termination of Employment.
            --------------------------

     (a)    General.  The employment of the EMPLOYEE shall terminate at any
            -------
time during the TERM (i) at the option of the EMPLOYER upon the delivery by
the EMPLOYER of written notice of employment termination to the EMPLOYEE, or
(ii) at the option of the EMPLOYEE upon the delivery by the EMPLOYEE of
written notice of termination to the EMPLOYER if, unless consented to in
writing by the EMPLOYEE, (A) EMPLOYEE is assigned duties or responsibilities
substantially inconsistent with those normally associated with EMPLOYEE's
position described in Section 2(a) of this AGREEMENT), (B) the EMPLOYEE is
required to move his personal residence, or perform his principal functions,
more than ten (10) miles from his primary office as of the date of the
commencement of the TERM of this AGREEMENT, or (C) the EMPLOYER otherwise
breaches this AGREEMENT in any material respect.

     (b)     Termination for JUST CAUSE.  In the event that the EMPLOYER
             --------------------------
terminates the employment of the EMPLOYEE before the expiration of the TERM
because of the EMPLOYEE's personal dishonesty, failure to maintain appropriate
insurance licenses, violation of any handbook applicable in general to
employees of EMPLOYER, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure or refusal to perform the duties and
responsibilities assigned in this AGREEMENT, willful violation of any law,
rule, regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, conviction of a felony or for fraud or embezzlement,
or material breach of any provision of this AGREEMENT (collectively, "JUST
CAUSE"), the EMPLOYEE shall not receive, and shall have no right to receive,
any compensation or other benefits for any period after such termination.

     (c)     Termination Other Than for JUST CAUSE.  In the event that the
             -------------------------------------
employment of the EMPLOYEE is terminated by the EMPLOYER or is terminated by
the EMPLOYEE in accordance with Section 4(a)(ii) of this AGREEMENT before the
expiration of the TERM other than for JUST CAUSE, the EMPLOYER shall be
obligated to  pay to the EMPLOYEE, his designated beneficiaries or his estate
in one lump sum due within one month following such termination an amount
equal to the salary to which the EMPLOYEE is entitled for the remainder of the
TERM pursuant to Section 3 of this AGREEMENT, plus reimbursement of all
expenses incurred by the EMPLOYEE before the termination and not yet
reimbursed, for which the EMPLOYEE is entitled to reimbursement under Section
3 of this AGREEMENT.

     (d)     Death of the EMPLOYEE.  The TERM shall automatically terminate
             ----------------------
upon the death of the EMPLOYEE.  In the event of such death, the EMPLOYEE's
estate shall be entitled to receive the compensation due the EMPLOYEE through
the last day of the calendar month in which the death occurred, except as
otherwise specified herein.

     5.     Consolidation, Merger or Sale of Assets.  Nothing in this
            ---------------------------------------
AGREEMENT shall preclude the EMPLOYER from consolidating with, merging into,
or transferring all, or substantially all, of its assets to another

<PAGE>

corporation.  If an acquiring or surviving corporation does not agree to
assume all of the EMPLOYER's obligations and undertakings hereunder, the
EMPLOYER shall pay to the EMPLOYEE, his designated beneficiary or his estate
before closing the amount specified in Section 4(c) of this AGREEMENT.  Upon
such a consolidation, merger or transfer of assets, the term "EMPLOYER," as
used herein, shall mean such other corporation or entity, and this AGREEMENT
shall continue in full force and effect.

     6.     Equitable Remedies.  The parties hereto acknowledge and agree that
            ------------------
the EMPLOYEE's obligations contained in this AGREEMENT are of special and
unique character which give them a peculiar value to the EMPLOYER and that
EMPLOYER will suffer immediate and irreparable harm to its good will and
business which will not be compensable by damages alone in the event the
EMPLOYEE repudiates or breaches the provisions hereof or threatens or attempts
to do so.  The EMPLOYEE, therefore, expressly agrees that, in addition to any
other rights or remedies that the EMPLOYER may have at law or in equity or by
reason of any other agreement, the EMPLOYER shall be entitled to obtain a
temporary, preliminary and/or permanent injunction in order to prevent or
restrain any such breach by the EMPLOYEE or any partner, agent,
representative, employer, employee and/or any other persons acting directly or
indirectly, in concert or in participation with the EMPLOYEE.

     7.     Nonassignability.  Neither this AGREEMENT nor any right or
            ----------------
interest hereunder shall be assignable by the EMPLOYEE, his beneficiaries or
his legal representatives without the EMPLOYER's prior written consent;
provided, however, that nothing in this Section 7 shall preclude (a) the
EMPLOYEE from designating a beneficiary or his estate to receive any benefits
payable hereunder upon his death, or (b) the executors, administrators, or
other legal representatives of the EMPLOYEE or his estate from assigning any
rights hereunder to the person or persons entitled thereto.

     8.     No Attachment.  Except as required by law, no right to receive
            -------------
payment 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 of assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.

     9.     Binding Agreement.  This AGREEMENT shall be binding upon, and
            -----------------
inure to the benefit of, the EMPLOYEE and the EMPLOYER and their respective
permitted successors and assigns.

     10.     Amendment of AGREEMENT.  This AGREEMENT may not be modified or
             ----------------------
amended, except by an instrument in writing signed by the parties hereto.

     11.     Waiver.  No term or condition of this AGREEMENT shall be deemed
             ------
to have been waived, nor shall there be an 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 waiver shall
operate only as to the specific term or condition waived and shall not

<PAGE>

constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.

     12.     Severability.  If, for any reason, any provision of this
             ------------
AGREEMENT is held invalid, such invalidity shall not affect the other
provisions of this AGREEMENT not held so invalid, and each such other
provision shall, to the full extent consistent with applicable law, continue
in full force and effect.  If this AGREEMENT is held invalid or cannot be
enforced, then any prior Agreement between the EMPLOYER (or any predecessor
thereof) and the EMPLOYEE shall be deemed reinstated to the full extent
permitted by law, as if this AGREEMENT had not been executed.

     13.     Headings.  The headings of the 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.

     14.     Governing Law; Regulatory Authority.  This AGREEMENT has been
             -----------------------------------
executed and delivered in the State of Ohio and its validity, interpretation,
performance and enforcement shall be governed by the laws of the State of
Ohio, except to the extent that federal law is governing.

     15.     Effect of Prior Agreements.  This AGREEMENT contains the entire
             --------------------------
understanding between the parties hereto and supersedes any prior employment
agreement between the EMPLOYER or any predecessor of the EMPLOYER and the
EMPLOYEE.

     16.     Notices.  Any notice or other communication required or permitted
             -------
pursuant to this AGREEMENT shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:

     If to the EMPLOYER:
             Home City Insurance Agency, Inc.
             1110 N. Plum Street
             Springfield, Ohio 45504
             Attention: Mr. Douglas L. Ulery

     If to the EMPLOYEE:

             Mr. Kenneth Richard Rice
             537 Rensselaer Street
             Springfield, Ohio  45503

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed by their duly authorized officers or have signed this AGREEMENT, each
as of the day and year first above written.


Attest:                                       HOME CITY INSURANCE AGENCY, INC.



_________________________________           By_____________________________
                                              Douglas L. Ulery


__________________________________          By______________________________
Attest:                                       Kenneth Richard Rice

<PAGE>

                              EMPLOYMENT AGREEMENT
                              --------------------


     THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into as of the
___ day of ___________, 2000, by and among Home City Insurance Agency, Inc.,
an Ohio corporation (the "EMPLOYER"); and William Nelson, an individual (the
"EMPLOYEE");

                                    WITNESSETH:

     WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of the EMPLOYER desire for the EMPLOYER to
retain the services of the EMPLOYEE as an agent for the sale of insurance as
an employee of the EMPLOYER;

     WHEREAS, the EMPLOYEE desires to serve as an agent for the sale of
insurance as an employee of the EMPLOYER; and

     WHEREAS, the EMPLOYER and the EMPLOYEE desire to enter into this
AGREEMENT to set forth the terms and conditions of the employment relationship
between the EMPLOYER and the EMPLOYEE;

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYER and the EMPLOYEE hereby agree as follows:

     1.     Employment and Term.  Upon the terms and subject to the conditions
of this AGREEMENT, the EMPLOYER hereby employs the EMPLOYEE, and the EMPLOYEE
hereby accepts employment, as a sales agent of the EMPLOYER.  The TERM of this
AGREEMENT shall commence on _____________, 2000, and shall end twenty-four
(24) months thereafter (the "TERM"), subject to earlier termination as
provided herein, except that the provisions of Sections 6 and 7 of this
AGREEMENT shall remain in effect as set forth in such Sections.

     2.     Duties of EMPLOYEE.

     (a)     General Duties and Responsibilities.  The EMPLOYEE shall serve as
a   sales agent of the EMPLOYER.  Subject to the direction of the Board of
Directors of the EMPLOYER, the EMPLOYEE shall perform all duties and shall
have all powers which are commonly incident to the position of sales agent or
which, consistent therewith, are delegated to him by the Board of Directors or
the President.

     (b)     Devotion of Entire Time to the Business of the EMPLOYER.  The
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
duties to the EMPLOYER and its holding company and their subsidiaries and
affiliates.  The EMPLOYEE shall not directly or indirectly render any services
of a business, commercial or professional nature to any person or organization
other than the EMPLOYER and its holding company and their subsidiaries and
affiliates without the prior written consent of the Board of Directors of the
EMPLOYER; provided, however, that the EMPLOYEE shall not be precluded from (i)

<PAGE>

reasonable participation in community, civic, charitable or similar
organizations; or (ii) the pursuit of personal investments which do not
interfere or conflict with the performance of the EMPLOYEE's duties to the
EMPLOYER.  Nothing in this Section shall limit the EMPLOYEE's right to invest
in securities of any business that does not provide services or products of
the type or competing with those provided by the EMPLOYER or its subsidiaries
or affiliates or securities constituting less than five percent of the
outstanding securities of a company whose securities are publicly traded.

     3.     Compensation.  The EMPLOYEE shall receive the following
            ------------
compensation, benefits and expense reimbursements during the TERM:

     (a)     Salary.  The EMPLOYEE shall receive an annual salary of $29,500
             ------
paid in equal installments not less often than monthly.  In addition, if
one-half of the commissions paid to the EMPLOYER by insurance companies for
insurance sold by the EMPLOYEE exceeds $29,500 for any twelve-month period
during the TERM, the EMPLOYEE shall be paid in one lump sum at the end of such
twelve-month period an amount equal to such excess.

     (b)     Expenses.  The EMPLOYEE shall receive reimbursement for all
             --------
reasonable travel, entertainment, mileage and miscellaneous expenses incurred
in connection with the performance of his duties under this AGREEMENT.  Such
reimbursement shall be made in accordance with the existing policies and
procedures of the EMPLOYER pertaining to reimbursement of expenses to
insurance agents.  Such reimbursable expenses shall include expenses necessary
for the maintenance of required insurance licenses.

     (c)     Benefits.  The EMPLOYEE shall be entitled to participate in all
             --------
formally established employee benefit, bonus, pension and profit-sharing plans
and similar programs that are maintained by the EMPLOYER or Home City Federal
Savings Bank of Springfield (the "BANK") from time to time, including programs
in respect of group health, disability or life insurance, and all employee
benefit plans or programs hereafter adopted in writing by the Board of
Directors of the EMPLOYER or the BANK, for which all full-time EMPLOYER
personnel or BANK personnel are eligible, except any employee stock ownership
plan (collectively, the "BENEFIT PLANS").  Notwithstanding any statement to
the contrary contained elsewhere in this AGREEMENT, the EMPLOYER may
discontinue or terminate at any time any such BENEFIT PLANS now existing or
hereafter adopted, to the extent permitted by the terms of such plans and
applicable law, and shall not be required to compensate the EMPLOYEE for such
discontinuance or termination, and the  EMPLOYER shall not be required to
provide to the EMPLOYEE or to continue to provide to the EMPLOYEE any such
BENEFIT PLAN pursuant to which the EMPLOYER cannot obtain coverage for the
EMPLOYEE.

     (d)     Vacation and Sick Leave.  The EMPLOYEE shall be entitled, without
             -----------------------
loss of pay, to be absent voluntarily from the performance of his duties under
this AGREEMENT, subject to the following conditions:

<PAGE>

             (i)     The EMPLOYEE shall be entitled to four weeks of annual
                     vacation and annual sick leave in accordance with the
                     policies periodically established by the Board of Directors
                     of the EMPLOYER; and

             (ii)    In addition to paid vacations and sick leave, the EMPLOYEE
                     shall be entitled, without loss of pay, to absent himself
                     voluntarily from the performance of his employment with
                     the EMPLOYER for such additional period of time and for
                     such valid and legitimate reasons as the Board of Directors
                     may, in its discretion, determine, and the Board of
                     Directors may grant to the EMPLOYEE a leave or leaves of
                     absence, with or without pay, at such time or times and
                     upon such terms and conditions as such Board of Directors,
                     in its discretion, may determine.

     (e)     Errors and Omissions Insurance.  EMPLOYER shall obtain and
             -------------------------------
maintain appropriate and reasonable errors and omissions insurance covering
the services rendered by the EMPLOYEE to and on behalf of EMPLOYER pursuant to
this AGREEMENT.

     4.     Termination of Employment.
            -------------------------

     (a)    General.  The employment of the EMPLOYEE shall terminate at any
            -------
time during the TERM (i) at the option of the EMPLOYER upon the delivery by
the EMPLOYER of written notice of employment termination to the EMPLOYEE, or
(ii) at the option of the EMPLOYEE upon the delivery by the EMPLOYEE of
written notice of termination to the EMPLOYER if, unless consented to in
writing by the EMPLOYEE, (A) EMPLOYEE is assigned duties or responsibilities
substantially inconsistent with those normally associated with EMPLOYEE's
position described in Section 2(a) of this AGREEMENT), (B) the EMPLOYEE is no
longer an agent of the EMPLOYER, (C) the EMPLOYEE is required to move his
personal residence, or perform his principal functions, more than ten (10)
miles from his primary office as of the date of the commencement of the TERM
of this AGREEMENT, or (D) the EMPLOYER otherwise breaches this AGREEMENT in
any material respect.

     (b)     Termination for JUST CAUSE.  In the event that the EMPLOYER
             --------------------------
terminates the employment of the EMPLOYEE before the expiration of the TERM
because of the EMPLOYEE's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure or refusal to perform the duties and responsibilities assigned in this
AGREEMENT, willful violation of any law, rule, regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, conviction of
a felony or for fraud or embezzlement, or material breach of any provision of
this AGREEMENT (collectively, "JUST CAUSE"), the EMPLOYEE shall not receive,
and shall have no right to receive, any compensation or other benefits for any
period after such termination.

     (c)     Termination Other Than for JUST CAUSE.  In the event that the
             -------------------------------------
employment of the EMPLOYEE is terminated by the EMPLOYER or is terminated by
the EMPLOYEE in accordance with Section 4(a)(ii) of this AGREEMENT before the
expiration of the TERM other than for JUST CAUSE, the EMPLOYER shall be
obligated (A) to  pay to the EMPLOYEE, his designated beneficiaries or his
estate in one lump sum due within one month following such termination an

<PAGE>

amount equal to the base salary amount to which the EMPLOYEE is entitled for
the remainder of the TERM pursuant to Section 3 of this AGREEMENT, without
giving effect to the year-end payment based on amount of commissions.

     (d)     Death of the EMPLOYEE.  The TERM shall automatically terminate
             ---------------------
upon the death of the EMPLOYEE.  In the event of such death, the EMPLOYEE's
estate shall be entitled to receive the compensation due the EMPLOYEE through
the last day of the calendar month in which the death occurred, except as
otherwise specified herein.

     5.     Consolidation, Merger or Sale of Assets.  Nothing in this
            ---------------------------------------
AGREEMENT shall preclude the EMPLOYER from consolidating with, merging into,
or transferring all, or substantially all, of its assets to another
corporation.  If an acquiring or surviving corporation does not agree to
assume all of the EMPLOYER's obligations and undertakings hereunder, the
EMPLOYER shall pay to the EMPLOYEE, his designated beneficiary or his
estate before closing the amount specified in Section 4(c) of this AGREEMENT.
Upon such a consolidation, merger or transfer of assets, the term "EMPLOYER,"
as used herein, shall mean such other corporation or entity, and this
AGREEMENT shall continue in full force and effect.

     6.     Covenants Not to Compete or Solicit.
            ------------------------------------

     (a)    Covenant Not to Compete.  Commencing on the date of the
            -----------------------
EMPLOYEE's termination of employment by EMPLOYER and ending on the tenth
anniversary thereof (the "RESTRICTED COMPETITION PERIOD"), the EMPLOYEE agrees
that he shall not, and shall not permit any of his AFFILIATES (hereinafter
defined), alone, together or in association with others, either as principal,
agent, owner, shareholder, officer, director, partner, lender, investor,
independent contractor, consultant or in any other capacity, to engage in,
have a financial interest in or be in any way connected or affiliated with, or
render advice or services to any natural person, organization or entity of any
type that engages in any activity which would compete in any way in Clark
County, Ohio, or any county contiguous to Clark County, Ohio, with the
business operated by the EMPLOYER of selling as agent insurance of all types.
For purposes of this Section 6, an "AFFILIATE" of a person shall mean (i) any
natural person, organization or entity of any type that directly, or
indirectly through one or more intermediaries, controls, is controlled by or
is under common control with, such specified person; (ii) any relative or
spouse of such person, or any relative of such spouse, any one of whom has the
same home as such person; (iii) any trust or estate in which such person or
any of the persons specified in (ii) collectively own ten percent or more of
the total beneficial interest or of which any of such persons serve as
trustee, executor or in any similar capacity; or (iv) any corporation or other
organization in which such person or any of the persons specified in (ii) are
the beneficial owners collectively of ten percent or more of any class of
equity securities or ten percent or more of the equity interest.  For purposes
of the definition of the term "AFFILIATE," "control" means the power to direct
the management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.  The
provision of financial planning services or the sale as agent or broker of
securities, other than the sale of insurance products or the referral of
persons to an insurance agency competing with the EMPLOYER, will not be deemed
to be competition with the business of the EMPLOYER for purposes of this
Section 6.

<PAGE>

     (b)     Covenant Not to Solicit.  During the RESTRICTED COMPETITION
             -----------------------
PERIOD, the EMPLOYEE further agrees that he will not, and will not permit any
AFFILIATE, directly or indirectly, to solicit, divert, take away or interfere
with, or attempt to solicit, divert, take away or interfere with, the
relationship of the EMPLOYER with any person who is or was, at any time
commencing two years immediately before the date of this AGREEMENT and ending
on the date of termination of the EMPLOYEE's employment with EMPLOYER, a
customer, employee or supplier of the EMPLOYER, Home City Federal Savings Bank
of Springfield ("Home City"), a wholly owned subsidiary of Home City Financial
Corporation ("HCFC"), or any company acquired by Home City or HCFC during the
period commencing on the date of this AGREEMENT and ending on the date of
termination of the EMPLOYEE's employment with EMPLOYER.

     (c)     Interpretation of Covenants.  The parties to this AGREEMENT
             ---------------------------
acknowledge and agree that the duration and area for which the covenant not to
compete and the covenant not to solicit are to be effective are fair and
reasonable and are reasonably required for the protection of the business of
the EMPLOYER.  In the event that any court determines that the time period or
the area, or both of them, are unreasonable as to any covenant and that such
covenant is to that extent unenforceable, the parties hereto agree that the
covenant shall remain in full force and effect for the greatest time period
and in the greatest area that would not render it unenforceable.  The parties
intend that each covenant shall be deemed to be a series of separate
covenants, one for each and every county of each and every state of the United
States of America and one for each and every political subdivision of each and
every other country in which the covenant not to compete or other covenant is
intended to be effective and is not proscribed by law.

     (d)     Waiver of Defense.  The EMPLOYEE hereby expressly waives any
             -----------------
objection to or defense in respect of the geographical scope or duration of
the restriction on competition and other covenants for the protection of the
business of the EMPLOYER provided in this Section 6.

     7.     Confidential Information.  The EMPLOYEE acknowledges that during
            ------------------------
his employment he will learn and have access to confidential information
regarding the EMPLOYER and its customers and businesses.  The EMPLOYEE agrees
and covenants, during the term of this AGREEMENT and thereafter, not to
disclose or use for his own benefit, or the benefit of any other person or
entity, any confidential information, unless or until the EMPLOYER consents to
such disclosure or use, such information becomes common knowledge in the
industry or is otherwise legally in the public domain or the EMPLOYEE is
required to disclose such information by a court of law.  The EMPLOYEE shall
not, during the term of this AGREEMENT and thereafter, knowingly disclose or
reveal to any unauthorized person any confidential information relating to the
EMPLOYER, its parent, subsidiaries or affiliates, or to any of the businesses
operated by them, and the EMPLOYEE confirms that such information constitutes
the exclusive property of the EMPLOYER.  The EMPLOYEE shall not otherwise
knowingly act or conduct himself (a) to the material detriment of the
EMPLOYER, its subsidiaries, or affiliates, or (b) in a manner which is
inimical or contrary to the interests of the EMPLOYER.

<PAGE>
     8.     Equitable Remedies.  The parties hereto acknowledge and agree that
            ------------------
the EMPLOYEE's obligations contained in this AGREEMENT are of special and
unique character which give them a peculiar value to the EMPLOYER and that
EMPLOYER will suffer immediate and irreparable harm to its good will and
business which will not be compensable by damages alone in the event the
EMPLOYEE repudiates or breaches the provisions hereof or threatens or attempts
to do so.  The EMPLOYEE, therefore, expressly agrees that, in addition to any
other rights or remedies that the EMPLOYER may have at law or in equity or by
reason of any other agreement, the EMPLOYER shall be entitled to obtain a
temporary, preliminary and/or permanent injunction in order to prevent or
restrain any such breach by the EMPLOYEE or any partner, agent,
representative, employer, employee and/or any other persons acting directly or
indirectly, in concert or in participation with the EMPLOYEE.

     9.     Nonassignability.  Neither this AGREEMENT nor any right or
            ----------------
interest hereunder shall be assignable by the EMPLOYEE, his beneficiaries or
his legal representatives without the EMPLOYER's prior written consent;
provided, however, that nothing in this Section 9 shall preclude (a) the
EMPLOYEE from designating a beneficiary or his estate to receive any benefits
payable hereunder upon his death, or (b) the executors, administrators, or
other legal representatives of the EMPLOYEE or his estate from assigning any
rights hereunder to the person or persons entitled thereto.

     10.     No Attachment.  Except as required by law, no right to receive
             -------------
payment 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 of assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.

     11.     Binding Agreement.  This AGREEMENT shall be binding upon, and
             -----------------
inure to the benefit of, the EMPLOYEE and the EMPLOYER and their respective
permitted successors and assigns.

     12.     Amendment of AGREEMENT.  This AGREEMENT may not be modified or
             ----------------------
amended, except by an instrument in writing signed by the parties hereto.

     13.     Waiver.  No term or condition of this AGREEMENT shall be deemed
             ------
to have been waived, nor shall there be an 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 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 or as to any act
other than the act specifically waived.

     14.     Severability.  If, for any reason, any provision of this
             ------------
AGREEMENT is held invalid, such invalidity shall not affect the other
provisions of this AGREEMENT not held so invalid, and each such other
provision shall, to the full extent consistent with applicable law, continue
in full force and effect.  If this AGREEMENT is held invalid or cannot be
enforced, then any prior Agreement between the EMPLOYER (or any predecessor

<PAGE>

thereof) and the EMPLOYEE shall be deemed reinstated to the full extent
permitted by law, as if this AGREEMENT had not been executed.

     15.     Headings.  The headings of the 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.

     16.     Governing Law; Regulatory Authority.  This AGREEMENT has been
             -----------------------------------
executed and delivered in the State of Ohio and its validity, interpretation,
performance and enforcement shall be governed by the laws of the State of
Ohio, except to the extent that federal law is governing.

     17.     Effect of Prior Agreements.  This AGREEMENT contains the entire
             --------------------------
understanding between the parties hereto and supersedes any prior employment
agreement between the EMPLOYER or any predecessor of the EMPLOYER and the
EMPLOYEE.

     18.     Notices.  Any notice or other communication required or permitted
             -------
pursuant to this AGREEMENT shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:

     If to the EMPLOYER:

             Home City Insurance Agency, Inc.
             1110 N. Plum Street
             Springfield, Ohio 45504
             Attention: Mr. Douglas L. Ulery

     If to the EMPLOYEE:

             Mr. William Nelson
             120 Tuttle Road
             Springfield, Ohio 45503

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed by their duly authorized officers or have signed this AGREEMENT, each
as of the day and year first above written.


Attest:                                       HOME CITY INSURANCE AGENCY, INC.

________________________________              By_______________________________
                                                Douglas L. Ulery



Attest:


________________________________                 ______________________________
                                                 William Nelson

<PAGE>

                                 EMPLOYMENT AGREEMENT
                                 --------------------


     THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into as of the
___ day of ___________, 2000, by and among Home City Insurance Agency, Inc.,
an Ohio corporation (the "EMPLOYER"); and Teresa Rinker, an individual (the
"EMPLOYEE");

                                      WITNESSETH:

     WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of the EMPLOYER desire for the EMPLOYER to
retain the services of the EMPLOYEE as the Office Manager and as an agent for
the sale of insurance as an employee of the EMPLOYER;

     WHEREAS, the EMPLOYEE desires to serve as the Office Manager and as an
agent for the sale of insurance as an employee of the EMPLOYER; and

     WHEREAS, the EMPLOYER and the EMPLOYEE desire to enter into this
AGREEMENT to set forth the terms and conditions of the employment relationship
between the EMPLOYER and the EMPLOYEE;

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYER and the EMPLOYEE hereby agree as follows:

     1.     Employment and Term.  Upon the terms and subject to the conditions
of this AGREEMENT, the EMPLOYER hereby employs the EMPLOYEE, and the EMPLOYEE
hereby accepts employment, as the Office Manager and as a sales agent of the
EMPLOYER.  The TERM of this AGREEMENT shall commence on _____________, 2000,
and shall end twenty-four (24) months thereafter (the "TERM"), subject to
earlier termination as provided herein, except that the provisions of Sections
6 and 7 of this AGREEMENT shall remain in effect as set forth in such
Sections.

     2.      Duties of EMPLOYEE.

     (a)     General Duties and Responsibilities.  The EMPLOYEE shall serve as
the Office Manager and as a sales agent of the EMPLOYER.  Subject to the
direction of the Board of Directors of the EMPLOYER, the EMPLOYEE shall
perform all duties and shall have all powers which are commonly incident to
the position of Office Manager and as a sales agent or which, consistent
therewith, are delegated to her by the Board of Directors or the President.

     (b)     Devotion of Entire Time to the Business of the EMPLOYER.  The
EMPLOYEE shall devote her entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of her
duties to the EMPLOYER and its holding company and their subsidiaries and
affiliates.  The EMPLOYEE shall not directly or indirectly render any services

<PAGE>

of a business, commercial or professional nature to any person or organization
other than the EMPLOYER and its holding company and their subsidiaries and
affiliates without the prior written consent of the Board of Directors of the
EMPLOYER; provided, however, that the EMPLOYEE shall not be precluded from (i)
reasonable participation in community, civic, charitable or similar
organizations; or (ii) the pursuit of personal investments which do not
interfere or conflict with the performance of the EMPLOYEE's duties to the
EMPLOYER.  Nothing in this Section shall limit the EMPLOYEE's right to invest
in securities of any business that does not provide services or products of
the type or competing with those provided by the EMPLOYER or its subsidiaries
or affiliates or securities constituting less than five percent of the
outstanding securities of a company whose securities are publicly traded.

     3.     Compensation.  The EMPLOYEE shall receive the following
            ------------
compensation, benefits and expense reimbursements during the TERM:

     (a)     Salary.  The EMPLOYEE shall receive an annual salary of $30,000
             ------
paid in equal installments not less often than monthly.

     (b)     Expenses.  The EMPLOYEE shall receive reimbursement for all
             --------
reasonable travel, entertainment, mileage and miscellaneous expenses incurred
in connection with the performance of her duties under this AGREEMENT.  Such
reimbursement shall be made in accordance with the existing policies and
procedures of the EMPLOYER pertaining to reimbursement of expenses to
insurance agents.  Such reimbursable expenses shall include expenses necessary
for the maintenance of required insurance licenses.

     (c)     Benefits.  The EMPLOYEE shall be entitled to participate in all
             --------
formally established employee benefit, bonus, pension and profit-sharing plans
and similar programs that are maintained by the EMPLOYER or Home City Federal
Savings Bank of Springfield (the "BANK") from time to time, including programs
in respect of group health, disability or life insurance, and all employee
benefit plans or programs hereafter adopted in writing by the Board of
Directors of the EMPLOYER or the BANK, for which all full-time EMPLOYER
personnel or BANK personnel are eligible, except any employee stock ownership
plan (collectively, the "BENEFIT PLANS").  Notwithstanding any statement to
the contrary contained elsewhere in this AGREEMENT, the EMPLOYER may
discontinue or terminate at any time any such BENEFIT PLANS now existing or
hereafter adopted, to the extent permitted by the terms of such plans and
applicable law, and shall not be required to compensate the EMPLOYEE for such
discontinuance or termination, and the  EMPLOYER shall not be required to
provide to the EMPLOYEE or to continue to provide to the EMPLOYEE any such
BENEFIT PLAN pursuant to which the EMPLOYER cannot obtain coverage for the
EMPLOYEE.

     (d)     Vacation and Sick Leave.  The EMPLOYEE shall be entitled, without
             -----------------------
loss of pay, to be absent voluntarily from the performance of her duties under
this AGREEMENT, subject to the following conditions:

             (i)     The EMPLOYEE shall be entitled to five weeks of annual
vacation and annual sick leave in accordance with the policies periodically
established by the Board of Directors of the EMPLOYER; and

<PAGE>

             (ii)    In addition to paid vacations and sick leave, the
EMPLOYEE shall be entitled, without loss of pay, to absent herself
voluntarily from the performance of her employment with the EMPLOYER for such
additional period of time and for such valid and legitimate reasons as the
Board of Directors may, in its discretion, determine, and the Board of
Directors may grant to the EMPLOYEE a leave or leaves of absence, with or
without pay, at such time or times and upon such terms and conditions as such
Board of Directors, in its discretion, may determine.

     (e)     Errors and Omissions Insurance.  EMPLOYER shall obtain and
             ------------------------------
maintain appropriate and reasonable errors and omissions insurance covering
the services rendered by the EMPLOYEE to and on behalf of EMPLOYER pursuant to
this AGREEMENT.

     4.     Termination of Employment.

     (a)    General.  The employment of the EMPLOYEE shall terminate at any
            -------
time during the TERM (i) at the option of the EMPLOYER upon the delivery by
the EMPLOYER of written notice of employment termination to the EMPLOYEE, or
(ii) at the option of the EMPLOYEE upon the delivery by the EMPLOYEE of
written notice of termination to the EMPLOYER if, unless consented to in
writing by the EMPLOYEE, (A) EMPLOYEE is assigned duties or responsibilities
substantially inconsistent with those normally associated with EMPLOYEE's
position described in Section 2(a) of this AGREEMENT), (B) the EMPLOYEE is no
longer an agent of the EMPLOYER, (C) the EMPLOYEE is required to move her
personal residence, or perform her principal functions, more than ten (10)
miles from her primary office as of the date of the commencement of the TERM
of this AGREEMENT, or (D) the EMPLOYER otherwise breaches this AGREEMENT in
any material respect.

     (b)    Termination for JUST CAUSE.  In the event that the EMPLOYER
            --------------------------
terminates the employment of the EMPLOYEE before the expiration of the TERM
because of the EMPLOYEE's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure or refusal to perform the duties and responsibilities assigned in this
AGREEMENT, willful violation of any law, rule, regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, conviction of
a felony or for fraud or embezzlement, or material breach of any provision of
this AGREEMENT (collectively, "JUST CAUSE"), the EMPLOYEE shall not receive,
and shall have no right to receive, any compensation or other benefits for any
period after such termination.

     (c)     Termination Other Than for JUST CAUSE.  In the event that the
             -------------------------------------
employment of the EMPLOYEE is terminated by the EMPLOYER or is terminated by
the EMPLOYEE in accordance with Section 4(a)(ii) of this AGREEMENT before the
expiration of the TERM other than for JUST CAUSE, the EMPLOYER shall be
obligated (A) to  pay to the EMPLOYEE, her designated beneficiaries or her
estate in one lump sum due within one month following such termination an
amount equal to the salary to which the EMPLOYEE is entitled for the remainder
of the TERM pursuant to Section 3 of this AGREEMENT.

<PAGE>

     (d)     Death of the EMPLOYEE.  The TERM shall automatically terminate
             ---------------------
upon the death of the EMPLOYEE.  In the event of such death, the EMPLOYEE's
estate shall be entitled to receive the compensation due the EMPLOYEE through
the last day of the calendar month in which the death occurred, except as
otherwise specified herein.

     5.     Consolidation, Merger or Sale of Assets.  Nothing in this
            ---------------------------------------
AGREEMENT shall preclude the EMPLOYER from consolidating with, merging into,
or transferring all, or substantially all, of its assets to another
corporation.  If an acquiring or surviving corporation does not agree to
assume all of the EMPLOYER's obligations and undertakings hereunder, the
EMPLOYER shall pay to the EMPLOYEE, her designated beneficiary or her estate
before closing the amount specified in Section 4(c) of this AGREEMENT.  Upon
such a consolidation, merger or transfer of assets, the term "EMPLOYER," as
used herein, shall mean such other corporation or entity, and this AGREEMENT
shall continue in full force and effect.

     6.     Covenants Not to Compete or Solicit.
            -----------------------------------

     (a)    Covenant Not to Compete.  Commencing on the date of the
            -----------------------
EMPLOYEE's termination of employment by EMPLOYER and ending on the tenth
anniversary thereof (the "RESTRICTED COMPETITION PERIOD"), the EMPLOYEE agrees
that she shall not, and shall not permit any of her AFFILIATES (hereinafter
defined), alone, together or in association with others, either as principal,
agent, owner, shareholder, officer, director, partner, lender, investor,
independent contractor, consultant or in any other capacity, to engage in,
have a financial interest in or be in any way connected or affiliated with, or
render advice or services to any natural person, organization or entity of any
type that engages in any activity which would compete in any way in Clark
County, Ohio, or any county contiguous to Clark County, Ohio, with the
business operated by the EMPLOYER of selling as agent insurance of all types.
For purposes of this Section 6, an "AFFILIATE" of a person shall mean (i) any
natural person, organization or entity of any type that directly, or
indirectly through one or more intermediaries, controls, is controlled by or
is under common control with, such specified person; (ii) any relative or
spouse of such person, or any relative of such spouse, any one of whom has the
same home as such person; (iii) any trust or estate in which such person or
any of the persons specified in (ii) collectively own ten percent or more of
the total beneficial interest or of which any of such persons serve as
trustee, executor or in any similar capacity; or (iv) any corporation or other
organization in which such person or any of the persons specified in (ii) are
the beneficial owners collectively of ten percent or more of any class of
equity securities or ten percent or more of the equity interest.  For purposes
of the definition of the term "AFFILIATE," "control" means the power to direct
the management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.  The
provision of financial planning services or the sale as agent or broker of
securities, other than the sale of insurance products or the referral of
persons to an insurance agency competing with the EMPLOYER, will not be deemed
to be competition with the business of the EMPLOYER for purposes of this
Section 6.

     (b)     Covenant Not to Solicit.  During the RESTRICTED COMPETITION
             -----------------------
PERIOD, the EMPLOYEE further agrees that she will not, and will not permit any
AFFILIATE, directly or indirectly, to solicit, divert, take away or interfere
with, or attempt to solicit, divert, take away or interfere with, the

<PAGE>

relationship of the EMPLOYER with any person who is or was, at any time
commencing two years immediately before the date of this AGREEMENT and ending
on the date of termination of the EMPLOYEE's employment with EMPLOYER, a
customer, employee or supplier of the EMPLOYER, Home City Federal Savings Bank
of Springfield ("Home City"), a wholly owned subsidiary of Home City Financial
Corporation ("HCFC"), or any company acquired by Home City or HCFC during the
period commencing on the date of this AGREEMENT and ending on the date of
termination of the EMPLOYEE's employment with EMPLOYER.

     (c)     Interpretation of Covenants.  The parties to this AGREEMENT
             ---------------------------
acknowledge and agree that the duration and area for which the covenant not to
compete and the covenant not to solicit are to be effective are fair and
reasonable and are reasonably required for the protection of the business of
the EMPLOYER.  In the event that any court determines that the time period or
the area, or both of them, are unreasonable as to any covenant and that such
covenant is to that extent unenforceable, the parties hereto agree that the
covenant shall remain in full force and effect for the greatest time period
and in the greatest area that would not render it unenforceable.  The parties
intend that each covenant shall be deemed to be a series of separate
covenants, one for each and every county of each and every state of the United
States of America and one for each and every political subdivision of each and
every other country in which the covenant not to compete or other covenant is
intended to be effective and is not proscribed by law.

     (d)     Waiver of Defense.  The EMPLOYEE hereby expressly waives any
             -----------------
objection to or defense in respect of the geographical scope or duration of
the restriction on competition and other covenants for the protection of the
business of the EMPLOYER provided in this Section 6.

     7.     Confidential Information.  The EMPLOYEE acknowledges that during
            ------------------------
her employment she will learn and have access to confidential information
regarding the EMPLOYER and its customers and businesses.  The EMPLOYEE agrees
and covenants, during the term of this AGREEMENT and thereafter, not to
disclose or use for his own benefit, or the benefit of any other person or
entity, any confidential information, unless or until the EMPLOYER consents to
such disclosure or use, or such information becomes common knowledge in the
industry or is otherwise legally in the public domain or the EMPLOYEE is
required to disclose such information by a court of law.  The EMPLOYEE shall
not, during the term of this AGREEMENT and thereafter, knowingly disclose or
reveal to any unauthorized person any confidential information relating to the
EMPLOYER, its parent, subsidiaries or affiliates, or to any of the businesses
operated by them, and the EMPLOYEE confirms that such information constitutes
the exclusive property of the EMPLOYER.  The EMPLOYEE shall not otherwise
knowingly act or conduct herself (a) to the material detriment of the
EMPLOYER, its subsidiaries, or affiliates, or (b) in a manner which is
inimical or contrary to the interests of the EMPLOYER.

     8.     Equitable Remedies.  The parties hereto acknowledge and agree that
            ------------------
the EMPLOYEE's obligations contained in this AGREEMENT are of special and
unique character which give them a peculiar value to the EMPLOYER and that

<PAGE>

EMPLOYER will suffer immediate and irreparable harm to its good will and
business which will not be compensable by damages alone in the event the
EMPLOYEE repudiates or breaches the provisions hereof or threatens or attempts
to do so.  The EMPLOYEE, therefore, expressly agrees that, in addition to any
other rights or remedies that the EMPLOYER may have at law or in equity or by
reason of any other agreement, the EMPLOYER shall be entitled to obtain a
temporary, preliminary and/or permanent injunction in order to prevent or
restrain any such breach by the EMPLOYEE or any partner, agent,
representative, employer, employee and/or any other persons acting directly or
indirectly, in concert or in participation with the EMPLOYEE.

     9.     Nonassignability.  Neither this AGREEMENT nor any right or
            ----------------
interest hereunder shall be assignable by the EMPLOYEE, her beneficiaries or
her legal representatives without the EMPLOYER's prior written consent;
provided, however, that nothing in this Section 9 shall preclude (a) the
EMPLOYEE from designating a beneficiary or her estate to receive any benefits
payable hereunder upon her death, or (b) the executors, administrators, or
other legal representatives of the EMPLOYEE or her estate from assigning any
rights hereunder to the person or persons entitled thereto.

     10.     No Attachment.  Except as required by law, no right to receive
             -------------
payment 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 of assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.

     11.     Binding Agreement.  This AGREEMENT shall be binding upon, and
             -----------------
inure to the benefit of, the EMPLOYEE and the EMPLOYER and their respective
permitted successors and assigns.

     12.     Amendment of AGREEMENT.  This AGREEMENT may not be modified or
             ----------------------
amended, except by an instrument in writing signed by the parties hereto.

     13.     Waiver.  No term or condition of this AGREEMENT shall be deemed
             ------
to have been waived, nor shall there be an 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 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 or as to any act
other than the act specifically waived.

     14.     Severability.  If, for any reason, any provision of this
             ------------
AGREEMENT is held invalid, such invalidity shall not affect the other
provisions of this AGREEMENT not held so invalid, and each such other
provision shall, to the full extent consistent with applicable law, continue
in full force and effect.  If this AGREEMENT is held invalid or cannot be
enforced, then any prior Agreement between the EMPLOYER (or any predecessor
thereof) and the EMPLOYEE shall be deemed reinstated to the full extent
permitted by law, as if this AGREEMENT had not been executed.

<PAGE>

     15.     Headings.  The headings of the 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.

     16.     Governing Law; Regulatory Authority.  This AGREEMENT has been
             -----------------------------------
executed and delivered in the State of Ohio and its validity, interpretation,
performance and enforcement shall be governed by the laws of the State of
Ohio, except to the extent that federal law is governing.

     17.     Effect of Prior Agreements.  This AGREEMENT contains the entire
             --------------------------
understanding between the parties hereto and supersedes any prior employment
agreement between the EMPLOYER or any predecessor of the EMPLOYER and the
EMPLOYEE.

     18.     Notices.  Any notice or other communication required or permitted
             -------
pursuant to this AGREEMENT shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:

     If to the EMPLOYER:

     Home City Insurance Agency, Inc.
     1110 N. Plum Street
     Springfield, Ohio 45504
     Attention: Mr. Douglas L. Ulery

     If to the EMPLOYEE:

     Ms. Teresa Rinker
     3804 Summerford Road
     South Charleston, Ohio 45368

     IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed by their duly authorized officers or have signed this AGREEMENT, each
as of the day and year first above written.

Attest:                                       HOME CITY INSURANCE AGENCY, INC.


__________________________                    By _____________________________
                                                 Douglas L. Ulery

Attest:

__________________________                        _____________________________
                                                  Teresa Rinker
<PAGE>

                                     EXHIBIT 2

                                       LEASE
                                       -----

     This Lease (the "Lease") is entered into this ____ day of ___________,
2000, by and between Kenneth Richard Rice, a natural person residing at 537
Rensselaer Street, Springfield, Ohio 45503, and V. Carol Rice, a natural
person residing at _____________ in Springfield, Ohio (collectively,
"Landlord"), and Home City Insurance Agency, Inc., a wholly-owned subsidiary
of Home City Financial Corporation and an Ohio corporation with its principal
executive offices located at 63 W. Main Street, Springfield, Ohio 45502
("Tenant").

                                   WITNESSETH:

     In consideration of all the rentals hereinafter reserved and the
covenants and agreements hereinafter set forth, the parties agree as follows:

     1.     Lease of Premises.  Landlord does hereby lease unto Tenant, and
            -----------------
Tenant does hereby take and lease from Landlord, the building located at 1110
N. Plum Street, Springfield, Ohio 45504 (the "Leased Premises"), for the term,
at the rent, and upon and subject to the terms and conditions hereinafter
stated.

     The lease of the Leased Premises shall include the right to use all
personal property located in the building on __________, 2000, including, but
not limited to, computers and furnishings.

     2.     Term.  This Lease shall terminate one year from the date first set
            ----
forth above, provided that Tenant shall have the right to renew this Lease for
up to three consecutive one-year terms by providing notice to Landlord at
least 60 days before the expiration of the then current term.

     3.     Surrender of Possession.  Upon the expiration or earlier
            -----------------------
termination of this Lease, Tenant shall peaceably and quietly leave and
surrender the Leased Premises to the Landlord, broom clean and in good order,
condition and repair, except for reasonable wear and tear and damage by the
elements of fire, acts of God, earthquake, insurrection, riot, invasion,
commotion or acts of any military power.

     4.     Holding Over.  In the event that Tenant shall not immediately
            ------------
surrender the Leased Premises at the expiration or prior termination of this
Lease, Tenant shall become a month-to-month tenant at 110% of the monthly rent
in effect during the last month of the then current term of this Lease,
commencing with the first day next after the expiration of the term of this
Lease.  Tenant shall continue to be subject to all of the terms, conditions,
covenants and agreements of this Lease.

<PAGE>

     5.     Rental Payment.  Tenant covenants to pay to Landlord monthly rent
            --------------
in the amount of $1,800.00 on the ____________ day of each month for the first
year of the term of this Lease.  If Tenant renews this Lease as provided in
Section 2, then each year the rental payment shall be adjusted annually to an
amount equal to the product obtained by multiplying the rental for the
immediately prior year by a fraction, the numerator of which shall be the
CPI-U (defined hereinafter) for the 11th calendar month of the immediately
prior lease year, and the denominator of which shall be the CPI-U for the 11th
calendar month of the year prior to the immediately prior lease year.  The
CPI-U shall mean the "Consumer Price Index-Seasonally Adjusted U.S. City
Average for All Items for All Urban Consumers, (1982-84 = 100)," published
monthly in the "Monthly Labor Review" of the Bureau of Labor Statistics of the
United States Department of Labor.  If the base year "(1982-84 = 100)" or
other base year used in computing the CPI-U is changed, the figures used in
making the computation above shall be changed accordingly, so that all
increases in such price index are taken into account notwithstanding any such
change in the base year.

     For example, assume that this Lease was effective on August 1, 1999.  The
11th month of this Lease Term would have been June 2000.  The CPI-U for June
2000 was 172.3, and the
CPI-U for June 1999 was 166.2.  The rental payment would be adjusted as
follows:

     $1,800 times (172.3 divided by 166.2) = $1,800 times 1.0367 = $1,866.06

     6.     Use of Leased Premises.  Tenant may use the Leased Premises for
            ----------------------
any lawful purpose and shall conduct business thereon without criminal
violation.

     Tenant shall not commit, nor allow to be committed, in, on or about the
Leased Premises, any act of waste, including any act that might deface, damage
or destroy the Leased Premises or any part thereof; use or permit to be used
on the Leased Premises any hazardous substance, equipment or other thing that
might cause injury to person or property or increase the danger of fire or
other casualty in, on or about the Leased Premises; permit any objectionable
or offensive noises or odors to be emitted from the Leased Premises; or do
anything or permit anything to be done, that would, in Landlord's reasonable
opinion, disturb or tend to disturb other occupants in the Leased Premises.

     Tenant shall not use the Leased Premises, or allow the Leased Premises to
be used, for any purpose or in any manner that would, in Landlord's opinion,
invalidate any policy of insurance now or hereafter carried on the Leased
Premises or increase the rate of premiums payable on any such insurance
policy.  Should Tenant fail to comply with this covenant, Landlord may, at its
option, require Tenant to stop engaging in such activity or to reimburse
Landlord as additional rent for any increase in premiums charged during the
term of this Lease for the insurance carried by Landlord on the Leased
Premises and attributable to the use being made of the Leased Premises by
Tenant.

     7.     Access to and Inspection of the Premises.  Landlord, its employees
            ----------------------------------------
and agents and any mortgagee of the building shall have the right to enter any
part of the Leased Premises during Tenant's business hours, upon 24 hours'
prior notice, for the purpose of examining or inspecting the same, showing the
same to prospective purchasers, mortgagees, or tenants and for making such

<PAGE>

repairs, alterations or improvements to the Leased Premises as Landlord may
deem necessary or desirable, provided such entry does not interfere with
Tenant's business.  Notwithstanding the foregoing, in the event of an
emergency, Landlord may enter the Leased Premises at any time after attempt to
notify Tenant reasonable under the circumstances.

     8.     Maintenance, Repairs and Taxes.  Landlord agrees and covenants at
            ------------------------------
its own cost and expense to maintain the interior and exterior of the Leased
Premises in good condition and repair, including but not limited to all
mechanical systems, glass, roof, structure, and HVAC system, and to pay all
property taxes levied on the Leased Premises.  Tenant agrees and covenants at
its own cost and expense to be responsible for routine cleaning of the
interior, snow removal and landscape maintenance.

     9.     Utilities.  Tenant shall be responsible for payment of all utility
            ---------
charges for service to the Leased Premises.

     10.    Interruption of Services.  Tenant understands and acknowledges
            ------------------------
that any one or more of the utilities serving the Leased Premises may be
interrupted by reason of accident, emergency or other causes beyond Landlord's
control.  Landlord does not represent or warrant the uninterrupted
availability of such utilities or services.  Any such interruption shall not
be deemed an eviction or disturbance of Tenant's right to possession,
occupancy and use of the Leased Premises or any part thereof, or render
Landlord liable to Tenant for damages by abatement of rent or otherwise, or
relieve Tenant from the obligation to perform its covenants under this Lease,
including the payment of rent, unless such interruption continues for more
than five (5) business days, in which case Tenant may terminate this Lease.

     11.     Casualty Insurance.  Landlord shall be responsible for insuring
             ------------------
and shall at all times during the term of this Lease carry a policy of
insurance which insures the Leased Premises against loss or damage by fire or
other casualty deemed appropriate by Landlord; provided, however, that
Landlord shall not be responsible for, and shall not be obligated to insure
against, any loss of or damage to any personal property of Tenant or which
Tenant may have on the Leased Premises or any trade fixtures installed by or
paid for by Tenant on the Leased Premises or any additional improvements which
Tenant may construct on the Leased Premises or for Tenant's business
interruption.

     12.     Damage or Destruction.  Landlord shall be required to repair any
             ---------------------
and all damage and destruction which occurs at the Leased Premises during
Tenant's occupancy, except damage or destruction caused by the willful,
grossly negligent or negligent conduct of Tenant or its employees, agents,
servants or representatives.  If more than 25% of the Leased Premises are
damaged or destroyed, such damage or destruction cannot be repaired by
Landlord within thirty (30) days and such damage was not caused by Tenant or
its employees, agents, servants or representatives, Tenant shall be permitted
to terminate this Lease by giving written notice to Landlord.  Such
termination shall be effective immediately upon delivery of the notice to
Landlord.

<PAGE>

     13.     Alterations and Improvements.  Tenant shall be permitted to make
             ----------------------------
any alterations and improvements to the Leased Premises as Tenant desires, the
cost of which does not exceed $20,000, without Landlord's consent.  For
alterations and improvements in excess of $20,000, Tenant must obtain prior
approval from Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed.  Except as otherwise agreed in writing by the Landlord
and the Tenant, such alterations and improvements shall be removed prior to
termination of this Lease, and the Leased Premises shall be returned
substantially to the condition of the Leased Premises at the commencement of
this Lease.

     14.     Successors and Assigns.  This Lease and the respective rights and
             ----------------------
obligations of the parties hereto shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto as well as the parties
themselves; provided, however, that Landlord, its successors and assigns shall
be obligated to perform Landlord's covenants under this Lease only during and
in respect to their respective periods of ownership during the term of this
Lease.

     15.     Assignment and Subletting.  Tenant may assign or transfer this
             -------------------------
Lease or sublet or rent (or permit occupancy or use of) the Leased Premises,
or any part thereof, to any party or entity related to or in any way
controlling, controlled by or under common control with Tenant without
obtaining the prior written consent of Landlord.  For purposes of this Section
15, "control" means the ability to elect a majority of the Board of
Directors.  Any other assignment, sublease or transfer shall require the prior
consent of Landlord, which shall not be unreasonably withheld.

     16.     Option to Purchase.  Tenant shall have a right at any time within
             ------------------
the original term of this Lease or within the first two renewal periods of
this Lease, if any, to purchase the Lease Premises at a price of $166,000.
Landlord agrees to execute an appropriate memorandum of lease evidencing the
option, in the form attached hereto as Exhibit A, which may be recorded at any
time by Tenant.

     17.     Invalid Provisions.  If any provision of this Lease shall be held
             ------------------
to be invalid, void or unenforceable, the remaining provisions hereof shall
not be affected or impaired, and such remaining provisions shall remain in
full force and effect.

     18.     Section Headings.  The topical headings of the several sections
             ----------------
of this Lease are inserted only as a matter of convenience and reference, and
do not affect, define, limit or describe the scope or intent of this Lease.

     19.     Rent Payments and Notices.  Rent payments required pursuant to
             -------------------------
this Lease shall be made payable to V. Carol Rice and shall be deemed paid to
Landlord if delivered to V. Carol Rice at 3156 Derr Road, Springfield, Ohio
45503.  Any notice or other communication required or permitted pursuant to
this Lease shall be deemed delivered if such notice or communication is in
writing and is delivered personally or by facsimile transmission or is
deposited in the United States mail, postage prepaid, addressed as follows:

<PAGE>


     If to Tenant:

     Home City Insurance Agency, Inc.
     63 W. Main Street
     Springfield, Ohio 45502
     Attention: Mr. Douglas L. Ulery

     If to Landlord:

     Mr. Kenneth Richard Rice
     537 Rensselaer Street
     Springfield, Ohio  45503


     IN WITNESS WHEREOF, the parties have executed this Lease with the intent
that they be legally bound as of the date first above written.


                                           TENANT:

______________________________________     HOME CITY INSURANCE AGENCY, INC.
______________________________________
print name

______________________________________
______________________________________     By:_______________________________
print name:                                Title:____________________________



                                            LANDLORD:

_______________________________________
_______________________________________
print name:

_______________________________________
_______________________________________     By: ______________________________
print name:                                     K. Richard Rice


_______________________________________
_______________________________________
print name:

________________________________________     By:______________________________
________________________________________        V. Carol Rice
print name:

<PAGE>
STATE OF ____________  :
                       :  SS.
COUNTY OF __________   :

     The foregoing instrument was acknowledged before me this ____ day of
____________, 2000, by __________________________, the ___________________ of
Home City Insurance Agency, Inc., on behalf of the agency.


                                          -------------------------------
                                          Notary Public

                                          My Commission Expires:__________
STATE OF ____________  :
                       :  SS.
COUNTY OF __________   :

     The foregoing instrument was acknowledged before me this ____ day of
____________, 2000, by K. Richard Rice, a natural person.


                                          ---------------------------------
                                          Notary Public

                                          My Commission Expires:___________

STATE OF ____________  :
                       :  SS.
COUNTY OF __________   :


     The foregoing instrument was acknowledged before me this ____ day of
____________, 2000, by V. Carol Rice, a natural person.


                                            _____________________________
                                            Notary Public

                                            My Commission Expires:________

This instrument prepared by:

Cynthia A. Shafer
Vorys, Sater, Seymour and Pease LLP
221 East Fourth Street
Suite 2100, Atrium Two
Cincinnati, Ohio  45202

<PAGE>

                                 EXHIBIT A
                                 ---------

                              MEMORANDUM OF LEASE
                              -------------------


          THIS INSTRUMENT is a Memorandum of Lease pursuant to which Kenneth
Richard Rice and V. Carol Rice, natural persons residing in Springfield, Ohio,
(hereinafter and in said Lease referred to as "Landlord") has leased to Home
City Insurance Agency, Inc., (hereinafter and in said Lease referred to as
"Tenant"), the certain premises generally known as 1110 N. Plum Street, Springfi
eld, Ohio, being situated upon real property which is more particularly
described on Exhibit A, which is attached hereto and hereby made a part hereof
(the "Premises").

          The address of Landlord as set forth in said Lease is 537 Rensselaer
Street, Springfield, Ohio 45503.  The address of Tenant as set forth in said
Lease is 63 W. Main Street, Springfield, Ohio 45502.

          Pursuant to the terms of said Lease, Landlord has leased to Tenant
the Premises, together with the easements, rights and appurtenances thereunto
belonging or appertaining, and together with the buildings, structures,
fixtures and other improvements now or hereafter existing thereon, and all
additions and accessions thereto, substitutions therefor and replacements
thereof permitted by said Lease.

          Said Lease was executed by Landlord and Tenant on
____________________, 2000 (the "Commencement Date"), and is for a term of one
(1) year, which shall commence on the Commencement Date and shall terminate on
___________________, 2001.  Further, said Lease provides for three (3) renewal
terms of one (1) year each.

          Landlord acquired title to the Premises by an instrument recorded in
the Recorder's Office of Clark County, Ohio, Inst. No. 9600009878, Vol. 574,
Page 141.

          Tenant has an option to purchase the Premises at any time during the
initial term or during the first two renewal terms.

<PAGE>

          IN WITNESS WHEREOF, Landlord and Tenant have executed this
Memorandum of Lease at _______________________ this ___ day of ___________,
2000.


Signed and acknowledged
in the presence of:

__________________________________
__________________________________        __________________________________
Print Name:                               Kenneth Richard Rice

__________________________________
__________________________________
Print Name:

__________________________________
__________________________________         __________________________________
Print Name:                                V. Carol Rice

__________________________________
__________________________________
Print Name:




____________________________________         HOME CITY INSURANCE AGENCY, INC.
____________________________________
Print Name:
____________________________________
____________________________________          By:______________________________
Print Name:                                   Its:_____________________________


STATE OF _____________     :
                           :  ss.
COUNTY OF ___________      :


          The foregoing instrument was acknowledged before me this _____ day
of ______________, 2000, by Kenneth Richard Rice.


                                                  ______________________________
                                                  Notary Public
<PAGE>

STATE OF _____________     :
                           :  ss.
COUNTY OF ___________      :


          The foregoing instrument was acknowledged before me this _____ day
of ______________, 2000, by V. Carol Rice.



                                                  _____________________________
                                                  Notary Public

STATE OF _____________     :
                           :  ss.
COUNTY OF ___________      :


          The foregoing instrument was acknowledged before me this _____ day
of ______________, 2000, by __________________________, the
_____________________ of Home City Insurance Agency, Inc., an Ohio
corporation, on behalf of the corporation.




                                                   _____________________________
                                                   Notary Public




This instrument prepared by and after
recording return to:

Cynthia A. Shafer
Vorys, Sater, Seymour and Pease LLP
Suite 2100, Atrium Two
221 East Fourth Street
P.O. Box 0236
Cincinnati, Ohio  45201-0236

<PAGE>


                                     EXHIBIT 3

Safeco
Indiana GRE
Westfield
Citizens Ins. Co. (Howell, MI)
Preferred Mutual Ins. Co.
Progressive
Great Oaks Ins. Co.
Guideone
Western Surety (CNA Insurance)
Burnham & Flowers
Great American Collectors Insurance Co.
Golden Rule Insurance Co.
Safeco Life Insurance Co.
American States Life Insurance Co.
Ohio Fair Plan Underwriting Assoc.
Fortis
Washington Nation
Central United Life Insurance Co.
Community Insurance Co.
Foremost Insurance Co.
Burns & Wilcox
First Community
Market Finders
Personal Service Insurance Co.
Bolton & Company

<PAGE>



                                    EXHIBIT 4

                            AGREEMENT NOT TO COMPETE
                            ------------------------


          THIS AGREEMENT NOT TO COMPETE (this "AGREEMENT") is made and entered
into this ____ day of ____________, 2000, by and between Home City Insurance
Agency, Inc., an Ohio corporation ("HOME CITY AGENCY"), and Kenneth Richard
Rice, an individual residing in Springfield, Ohio ("KRR").

                                W I T N E S S E T H:
                                -------------------

     WHEREAS, HOME CITY AGENCY, KRR, Home City Financial Corporation ("HOME
CITY FINANCIAL") and Rice Insurance Agency, Inc. ("RICE AGENCY"), executed
effective ______________, 2000, an Asset Sale and Purchase Agreement providing
for the sale of the book of business of RICE AGENCY to HOME CITY AGENCY;

     WHEREAS, HOME CITY AGENCY expects to employ KRR from the effective date
of the transfer of the book of business of RICE AGENCY to HOME CITY AGENCY
until June 1, 2003;

     WHEREAS, in connection with that transfer of business, HOME CITY
FINANCIAL deemed it important to the continued operation of that business that
KRR not compete with HOME CITY AGENCY in the business of selling insurance as
agent upon the conclusion of the employment of KRR by HOME CITY AGENCY; and

     WHEREAS, the parties to this AGREEMENT desire to set forth the
understanding of the parties hereto with respect to restrictions on KRR's
competition with HOME CITY AGENCY upon the termination of employment of KRR by
HOME CITY AGENCY;

     NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, KRR and HOME CITY AGENCY hereby agree as follows:

     1.     Covenant Not to Compete.  Commencing on the date first set forth
            -----------------------
above and ending on the tenth anniversary of the termination of KRR's
employment by HOME CITY AGENCY  (the "RESTRICTED COMPETITION PERIOD"), KRR
agrees that he shall not, and shall not permit any of his AFFILIATES
(hereinafter defined), alone, together or in association with others, either
as principal, agent, owner, shareholder, officer, director, partner, lender,
investor, independent contractor, consultant or in any other capacity, to
engage in, have a financial interest in or be in any way connected or
affiliated with, or render advice or services to any natural person,
organization or entity of any type that engages in any activity which would
compete in any way in Clark County, Ohio, or any county contiguous to Clark
County, Ohio, with the business operated by the HOME CITY AGENCY of selling as
an agent insurance of any type being sold by HOME CITY AGENCY at the time of
termination of KRR's employment by HOME CITY AGENCY or actively being
considered for sale by HOME CITY AGENCY at the time of termination of KRR's
employment by HOME CITY AGENCY.  For purposes of this AGREEMENT, an

<PAGE>

"AFFILIATE" of a person shall mean (i) any natural person, organization or
entity of any type that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with,
such specified person; (ii) any relative or spouse of such person, or any
relative of such spouse, any one of whom has the same home as such person;
(iii) any trust or estate in which such person or any of the persons
specified in (ii) collectively own ten percent or more of the total beneficial
interest or of which any of such persons serve as trustee, executor or in any
similar capacity; or (iv) any corporation or other organization in which such
person or any of the persons specified in (ii) are the beneficial owners
collectively of ten percent or more of any class of equity securities or ten
percent or more of the equity interest.  For purposes of the definition of
the term "AFFILIATE," "control" means the power to direct the management and
policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.  The provision of
financial planning services or the sale as agent or broker of securities,
other than the sale of insurance products or the referral of persons to an
insurance agency competing with HOME CITY AGENCY, will not be deemed to be
competition with the business of the HOME CITY AGENCY for purposes of this
AGREEMENT.

     2.     Covenant Not to Solicit.  During the RESTRICTED COMPETITION PERIOD,
            -----------------------
KRR further agrees that he will not, and will not permit any AFFILIATE,
directly or indirectly, to solicit, divert, take away or interfere with, or
attempt to solicit, divert, take away or interfere with, the savings
association, banking, insurance or investment relationship of HOME CITY AGENCY
with any person who is or was (i) at any time commencing two years immediately
before the date of this AGREEMENT and ending on the date of termination of
KRR's employment with HOME CITY AGENCY, a customer, employee or supplier of
RICE AGENCY or (ii) commencing on the date of this AGREEMENT and ending on the
date of termination of KRR's employment with HOME CITY AGENCY, a customer,
employee or supplier of HOME CITY AGENCY, Home City Federal Savings Bank of
Springfield ("HOME CITY BANK"), a wholly owned subsidiary of HOME CITY
FINANCIAL, or any company acquired by HOME CITY BANK or HOME CITY FINANCIAL
during the period commencing on the date of this AGREEMENT and ending on the
date of termination of the KRR's employment with HOME CITY AGENCY.

     3.     Confidential Information.  KRR acknowledges that during his
            ------------------------
employment he will learn and have access to confidential information regarding
HOME CITY AGENCY and its customers and businesses.  KRR agrees and covenants,
during the term of this AGREEMENT and thereafter, not to disclose or use for
his own benefit, or the benefit of any other person or entity, any
confidential information, unless or until HOME CITY AGENCY consents to such
disclosure or use, such information becomes common knowledge in the industry
or is otherwise legally in the public domain or KRR is required to disclose
such information by a court of law.  KRR shall not, during the term of this
AGREEMENT and thereafter, knowingly disclose or reveal to any unauthorized
person any confidential information relating to HOME CITY AGENCY, its parent,
subsidiaries or affiliates, or to any of the businesses operated by them, and
KRR confirms that such information constitutes the exclusive property of HOME
CITY AGENCY.  KRR shall not otherwise knowingly act or conduct himself (a) to

<PAGE>

the material detriment of HOME CITY AGENCY, its subsidiaries, or affiliates,
or (b) in a manner which is inimical or contrary to the interests of HOME CITY
AGENCY.

     4.     Payments to KRR.  In consideration and exchange for the covenants,
            ---------------
agreements and releases set forth in this AGREEMENT, HOME CITY AGENCY shall
pay to KRR the following:

     a.  The sum of $390,000, payable in ten annual installments of $39,000
due on June 1 of each year commencing with the first payment due on June 1,
2003, and

     b.  On the first of each month commencing with the first full month after
____________ [the effective date of the closing of the asset sale] and ending
on June 1, 2003, $_______ [an amount equivalent to interest on $390,000 at the
rate being paid by HOME CITY BANK on a 24-month certificate of deposit
purchased at the time of the effective date of the asset sale].

5.     Interpretation of Covenants and Remedies.  The parties to this
       ----------------------------------------
AGREEMENT acknowledge and agree that the duration and area for which the
covenant not to compete and the covenant not to solicit are to be effective
are fair and reasonable and are reasonably required for the protection of the
business of HOME CITY AGENCY.  In the event that any court determines that the
time period or the area, or both of them, are unreasonable as to any covenant
and that such covenant is to that extent unenforceable, the parties hereto
agree that the covenant shall remain in full force and effect for the greatest
time period and in the greatest area that would not render it unenforceable.
The parties intend that each covenant shall be deemed to be a series of
separate covenants, one for each and every county of each and every state of
the United States of America in which the covenant not to compete or other
covenant is intended to be effective and is not proscribed by law.

The parties further agree that in the event that any court determines, upon
request by KRR or any AFFILIATE of KRR, that the time period is unreasonable
as to any covenant and that such covenant is to that extent unenforceable,
then payments pursuant to Section 4 of this Agreement shall cease for the
portion of the RESTRICTED COMPETITION PERIOD with respect to which this
AGREEMENT is not enforceable.  The cessation of payments shall be in addition
to any remedies available to HOME CITY AGENCY for a breach of any provision of
this AGREEMENT by KRR.  In the event that any court determines, upon request
by anyone other than KRR or any AFFILIATE of KRR, that the time period is
unreasonable as to any covenant and that such covenant is to that extent
unenforceable, then payments pursuant to Section 4 of this Agreement shall not
cease for the portion of the RESTRICTED COMPETITION PERIOD with respect to
which this AGREEMENT is not enforceable.

     The parties hereto acknowledge and agree that KRR's obligations contained
in this AGREEMENT are of special and unique character which give them a
peculiar value to HOME CITY AGENCY and that HOME CITY AGENCY will suffer
immediate and irreparable harm to its good will and business which will not be
compensable by damages alone in the event KRR repudiates or breaches the
provisions hereof or threatens or attempts to do so.  KRR, therefore, expressly
agrees that, in addition to any other rights or remedies that HOME CITY AGENCY

<PAGE>

may have at law or in equity or by reason of any other agreement, HOME CITY
AGENCY, HOME CITY FINANCIAL or HOME CITY BANK shall be entitled to obtain a
temporary, preliminary and/or permanent injunction in order to prevent or
restrain any such breach by KRR or any partner, agent, representative,
employer, employee and/or any other persons acting directly or indirectly,
in concert or in participation with KRR.

     6.     Nonassignability.  Neither this AGREEMENT nor any right or
            ----------------
interest hereunder shall be assignable by KRR, his beneficiaries or his legal
representatives without HOME CITY AGENCY's and HOME CITY BANK's prior written
consent; provided, however, that nothing in this Section 6 shall preclude (a)
KRR from designating a beneficiary to receive any benefits payable hereunder
upon his death, or (b) the executors, administrators, or other legal
representatives of KRR or his estate from assigning any rights hereunder to
the person or persons entitled thereto.

     7.     No Attachment.  Except as required by law, no right to receive
            -------------
payment 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 of assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.

     8.     Binding Agreement.  This AGREEMENT shall be binding upon, and
            -----------------
inure to the benefit of, KRR, HOME CITY AGENCY, HOME CITY FINANCIAL and HOME
CITY BANK and their respective permitted successors and assigns.

     9.     Amendment of AGREEMENT.  This AGREEMENT may not be modified or
            ----------------------
amended, except by an instrument in writing signed by the parties hereto.

     10.     Waiver.  No term or condition of this AGREEMENT shall be deemed
             ------
to have been waived, nor shall there be an 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 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 or as to any act
other than the act specifically waived.

     11.     Severability.  If, for any reason, any provision of this
             ------------
AGREEMENT is held invalid, such invalidity shall not affect the other
provisions of this AGREEMENT not held so invalid, and each such other
provision shall, to the full extent consistent with applicable law, continue
in full force and effect.

     12.     Headings.  The headings of the 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.

     13.     Governing Law; Regulatory Authority.  This AGREEMENT has been
             -----------------------------------
executed and delivered in the State of Ohio and its validity, interpretation,
performance and enforcement shall be governed by the laws of the State of

<PAGE>

Ohio, except to the extent that federal law is governing.

     14.     Effect of Prior Agreements.  This AGREEMENT contains the entire
             --------------------------
understanding between the parties hereto and supersedes any prior
noncompetition agreement between RICE AGENCY or any predecessor of RICE AGENCY
and KRR.

     15.     Notices.  Any notice or other communication required or permitted
             -------
pursuant to this AGREEMENT shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:

     If to HOME CITY AGENCY, HOME CITY FINANCIAL or HOME CITY BANK:

     Home City Federal Savings Bank of Springfield
     63 W. Main Street
     Springfield, Ohio 45502
     Attention: President

     If to KRR:

     Mr. Kenneth Richard Rice
     537 Rensselaer Street
     Springfield, Ohio 45503


IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed by their duly authorized officers or have signed this AGREEMENT, each
as of the day and year first above written.


Attest:                                      HOME CITY INSURANCE AGENCY, INC.

________________________________             By_______________________________
                                               Douglas L. Ulery
                                               President

Attest:


________________________________               _______________________________
                                                Kenneth Richard Rice

<PAGE>

                                     EXHIBIT 5

     1.  Rice Insurance Agency, Inc.
     2.  Rice Insurance Agency
     3.  Rice Agency
     4.  Picture of Building at 1110 N. Plum Street, Springfield, Ohio 45503




            DRIVE-IN INSURANCE AGENCY
           "It's a Pleasure I Insure You"

<PAGE>

                                      EXHIBIT 7


EXPENSES TO BE REIMBURSED PRO RATA BASED ON PORTION OF YEAR ELAPSED:

     1.  Errors and Omissions Insurance from Westport Insurance for period
     from August 4, 2000, to August 4, 2001 -- Annual Premium of $2,688

     2.  Annual Dues to the Independent Insurance Agents of Ohio & USA from
     July 1, 2000, to July 1, 2001 -- $1,000

EXPENSES TO BE REIMBURSED IN FULL:

     1.  60 Monthly Desk Plan Organizers for 2001             $434.49
     2.  60 Executive Large Am. Charm Calendars for 2001       575.65
     3.  300 Moneyshines Calendars for 2001                    683.78
     4.  200 Desk Calendars for 2001                           435.96





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