CHANGE OF CONTROL AGREEMENT
Exhibit 10
THIS CHANGE OF CONTROL AGREEMENT (this “Agreement”) is entered into as of the 14th day of
January, 2009, by and between Camco Financial Corporation, a Delaware corporation (“Camco”), and
Xxxxx X. Xxxxxx (the “Employee”);
WITNESSETH:
WHEREAS, the Employee is employed as the Chief Financial Officer of Camco and its wholly-owned
subsidiary, Advantage Bank (the “Bank”);
WHEREAS, as a result of the skill, knowledge and experience of the Employee, Camco believes it
is in the best interest of Camco and its stockholders to provide the Employee with a sense of
security and fair treatment to encourage the Employee to remain an employee of Camco;
WHEREAS, Camco and the Employee desire to enter into this Agreement to set forth their
understanding as to their respective rights and obligations in the event of the termination of
Employee’s employment under the circumstances set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, Camco
and the Employee hereby agree as follows:
1. Term. The term of this Agreement shall commence on January 14, 2009, and shall end
January 31, 2010, subject to extension and to earlier termination as provided herein (the “Term”).
Prior to each anniversary of the date of this Agreement, the Board of Directors of Camco shall
review the performance of the Employee. In connection with such annual review, the Term of this
Agreement shall be extended for a one-year period beyond the then-effective expiration date,
provided the Board of Directors of Camco, in its sole discretion, determines in a duly adopted
resolution that this Agreement should be extended.
2. Termination of Employment.
(a) Termination by Camco in Connection with a Change of Control. In the event that
the employment of the Employee is terminated by Camco, the Bank or their respective successors or
assigns, during the Term for any reason other than Just Cause within six months prior to a Change
of Control (hereinafter defined) or within one year after a Change of Control, then the following
shall occur:
(i) Camco shall promptly, but in no event more than 60 days following the
Employee’s date of termination, pay to the Employee or to his beneficiaries,
dependents or estate an amount equal to two times the Employee’s annual base
compensation as most recently set prior to the occurrence of the Change of Control;
(ii) The Employer shall pay the premiums required to maintain coverage for the
Employee and his eligible dependents under the health insurance plan of Camco or the
Bank in which the Employee is a participant immediately prior to the Change of
Control in accordance with the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, until the earliest of (A) the second anniversary of the
termination of the Employee’s employment or (B) the date on which the Employee is
eligible to be included in another employer’s benefit plans as a full-time employee.
Notwithstanding the foregoing, any amounts or benefits that will be paid or
provided under this Section 2(a)(ii) after completion of the time period described
in Treasury Regulation §1.409A-1(b)(9)(v)(B) shall be subject to the following
requirements: (X) the amount of expenses eligible for reimbursement or benefits
provided during any taxable year of the Employee may not affect the expenses
eligible for reimbursement or benefits to be provided in any other taxable year of
the Employee; (Y) any reimbursement of an eligible expense shall be made on or
before the last day of the taxable year of the Employee following the taxable year
of the Employee in which the expense was incurred; and (Z) the right to such
reimbursement or benefit may not be subject to liquidation or exchange for another
benefit; and
(iii) The Employee shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor shall
any amounts received from other employment or otherwise by the Employee offset in
any manner the obligations of Camco hereunder, except as specifically stated in
subparagraph (b).
For purposes of this Agreement, the term “Just Cause” means 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. For purposes of this Agreement, any reference
to the Employee’s “termination” or “termination of employment” shall mean the Employee’s
“separation from service”, within the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended (“Code”) from Camco and all entities with whom Camco would be considered a single
employer under Sections 414(b) and (c) of the Code.
(b) Termination by the Employee in Connection with a Change of Control. The Employee
may voluntarily terminate his employment pursuant to this Agreement within twelve months following
a Change of Control and shall be entitled to compensation as set forth in Section 2(a) of this
Agreement in the event that:
(i) the present capacity or circumstances in which the Employee is employed
immediately prior to the completion of the Change of Control are materially changed,
in the reasonable opinion of the Employee (including, without
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limitation, a material reduction in responsibilities or authority or a
reduction in salary);
(ii) the Employee is required to move his personal residence, or perform his
principal executive functions, more than thirty-five (35) miles from his primary
office as of the date of the commencement of the Term of this Agreement; or
(iii) Camco otherwise breaches this Agreement in any material respect.
In the event that payments pursuant to this Section 2 would result in the imposition of a penalty
tax pursuant to Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder (“Section 280G”), such payments shall be reduced to the maximum
amount which may be paid under Section 280G without exceeding such limits. Any reduction in
payments necessary to comply with the requirements of this Agreement relating to the limitations of
Section 280G or applicable regulatory limits shall be made in accordance with Section 409A of the
Code.
(c) Death of the Employee. This Agreement shall automatically terminate upon the
death of the Employee.
(d) “Golden Parachute” Provision. Any payments made to the Employee pursuant to this
Agreement or otherwise are subject to and conditioned upon their compliance with 12 U.S.C. §1828(k)
and any regulations promulgated thereunder.
(e) Definition of “Change of Control”. A “Change of Control” shall mean any one of
the following events: (i) the acquisition by any person (as defined under Section 409A of the
Code), or more than one person acting as a group (as defined under Section 409A of the Code), of
shares of Camco that, together with the shares of Camco held by such person or group, constitutes
more than 50 percent of the total fair market value or total voting power of all of the shares of
Camco; (ii) the acquisition by any person, or more than one person acting as a group, within any
12-month period, of shares of Camco possessing 30 percent or more of the total voting power of all
of the shares of Camco; (iii) a majority of the members of the Board of Directors of Camco is
replaced during any 12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board of Directors of Camco prior to the date of the appointment or
election; or (iv) the acquisition by any person, or more than one person acting as a group, within
any 12-month period, of assets from Camco that have a total gross fair market value equal to or
more than 40 percent of the total gross fair market value of all of the assets of Camco immediately
prior to such acquisition or acquisitions. This definition of Change of Control shall be
interpreted in a manner that is consistent with the definition of “change in control event” under
Section 409A of the Code.
(f) Payment Delay for Specified Employees. Notwithstanding anything in this Agreement
to the contrary, if the Employee is a “specified employee” (within the meaning of Section 409A of
the Code and as determined under Camco’s policy for determining specified
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employees), on the Employee’s date of termination and the Employee is entitled to a payment and/or
a benefit under this Agreement that is required to be delayed pursuant to Section 409A(a)(2)(B)(i)
of the Code, then such payment or benefit, as the case may be, shall not be paid or provided (or
begin to be paid or provided) until the first business day of the seventh month following the date
of the Employee’s termination of employment (or, if earlier, the date of the Employee’s death).
The first payment that can be made to the Employee following such postponement period shall include
the cumulative amount of any payments or benefits that could not be paid or provided during such
postponement period due to the application of Section 409A(a)(2)(B)(i) of the Code.
3. Confidential Information. The Employee acknowledges that during his employment he
will learn and have access to confidential information regarding Camco and its customers and
businesses. The Employee agrees and covenants not to disclose or use for his own benefit, or the
benefit of any other person or entity, any confidential information, unless or until Camco consents
to such disclosure or use or such information becomes common knowledge in the industry or is
otherwise legally in the public domain. The Employee shall not knowingly disclose or reveal to any
unauthorized person any confidential information relating to Camco, its subsidiaries or affiliates,
or to any of the businesses operated by them, and the Employee confirms that such information
constitutes the exclusive property of Camco. The Employee shall not otherwise knowingly act or
conduct himself (a) to the material detriment of Camco, its subsidiaries, or affiliates, or (b) in
a manner which is inimical or contrary to the interests of Camco.
4. Nonassignability. Neither this Agreement nor any right or interest hereunder shall
be assignable by the Employee, his beneficiaries or his legal representatives without Camco’s prior
written consent; provided, however, that nothing in this Section 4 shall preclude (a) the Employee
from designating a beneficiary 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.
5. 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.
6. Binding Agreement. This Agreement shall be binding upon, and inure to the benefit
of, the Employee and Camco and their respective permitted successors and assigns.
7. Amendment of Agreement. This Agreement may not be modified or amended, except by
an instrument in writing signed by the parties hereto.
8. 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
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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.
9. 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.
10. 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.
11. 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.
If this Agreement conflicts with any applicable federal law as now or hereafter in effect, then
federal law shall govern.
12. Effect of Prior Agreements. This Agreement contains the entire understanding
between the parties hereto and supersedes any prior employment agreement between Camco or any
predecessor of Camco and the Employee.
13. 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 Camco:
If to the Employee:
Xxxxx X. Xxxxxx
0000 XXXXXXXXXXX XX
XXXXXX, XX. 00000
0000 XXXXXXXXXXX XX
XXXXXX, XX. 00000
14. Section 409A of the Code. This Agreement is intended to comply with the
requirements of Section 409A of the Code, and, to the maximum extent permitted by law, shall be
interpreted, construed and administered consistent with this intent. Neither Camco nor any
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other
person shall have liability in the event this Agreement fails to comply with the requirements of
Section 409A of the Code. Nothing in this Agreement shall be construed as the guarantee of any
particular tax treatment to the Employee.
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IN WITNESS WHEREOF, Camco has caused this Agreement to be executed by its duly authorized
officer, and the Employee has signed this Agreement, each as of the day and year first above
written.
Attest:
|
CAMCO FINANCIAL CORPORATION | |||
/s/ Xxxxxx X. Xxxxxx
|
By /s/ Xxxxx X. Xxxxxx |
|||
| EMPLOYEE | ||||
/s/ Xxxxxx X. Xxxxxx
|
/s/ Xxxxx X. Xxxxxx | |||
| Xxxxx X. Xxxxxx |
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