EMPLOYMENT AGREEMENT FOR MARK A. KLEIN
EXHIBIT
10.1
FOR
XXXX
X. XXXXX
This
Employment Agreement (“Agreement”) is entered into this 30th day of July, 2010
(“Effective Date”), by and between Rurban Financial Corp., an Ohio corporation
(the “Employer”), and Xxxx X. Xxxxx (the “Executive”).
WHEREAS, the Executive is
currently employed by the Employer; and
WHEREAS, the Employer desires
to continue to employ the Executive and to enter into an agreement embodying the
terms of such employment; and
WHEREAS, the Executive desires
to continue such employment and enter into such an agreement;
NOW, THEREFORE, in
consideration of the mutual covenants herein contained and other valuable
consideration, the receipt and adequacy of which are agreed to by the parties,
the Employer and the Executive hereby mutually agree as follows:
1. Position and
Duties. The Executive shall continue to be employed by the
Employer pursuant to the terms and conditions of this Agreement and, if elected
to such position by the Board of Directors of the Employer (the “Board”), shall
serve as the Chief Executive Officer of the Employer. During the Term
(as defined below):
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The
Executive shall have the authority commensurate with the Executive’s
position and such duties as shall be determined from time to time by the
Board and shall report directly to the Board. In addition, the
Executive shall be appointed to fill a vacancy on the Board and shall
serve the remainder of such term; thereafter, the Executive shall serve as
a member of the Board, if elected to such position by the shareholders of
the Employer.
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The
Executive will further perform such other duties and hold such other
positions related to the business of the Employer and its Affiliates as
may from time to time be reasonably requested of the Executive by the
Board. For purposes of this Agreement, an “Affiliate” shall mean any
corporation (including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, trust, association
or organization which is, directly or indirectly, controlled by, or under
common control with, the Employer.
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(c)
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Except
as otherwise set forth in this Agreement, the Executive will devote all of
the Executive’s skills and the Executive’s full business time and
attention to the Executive’s duties hereunder and in furtherance of the
business and interests of the Employer and its Affiliates and will not
directly or indirectly render any services of a business, commercial or
professional nature to any person or organization without the prior
written consent of the Board; provided, however, that the Executive may
devote reasonable periods required for: (i) serving as a director, trustee
or member of a committee of any organization involving no actual,
potential or perceived conflict of interest with the interests of the
Employer or any Affiliate; (ii) delivering lectures, fulfilling speaking
engagements, teaching at educational institutions or business
organizations; (iii) engaging in charitable and community activities; and
(iv) managing the Executive’s personal investments, but only if the
activities set forth in this paragraph do not, individually, or together,
interfere with the performance of Executive’s duties and responsibilities
hereunder, as may be reasonably determined by the Board or any committee
thereof. Executive agrees to notify, and obtain the written
approval (which approval shall not be unreasonably withheld) of, the
Board, the Chairman of the Board or an appropriate committee of the Board
before engaging in any activity described in subsections (i) or (iii) of
this Section 2(c).
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EXHIBIT
10.1
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(d)
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Upon
termination of the Executive’s employment hereunder for any reason, the
Executive shall cease to hold any position as an officer or director (or
any other similar position) of the Employer or any Affiliate and shall
resign from all positions as an officer or director (or any other similar
position) in all corporations, partnerships, limited liability companies
or other entities for which the Executive is serving, at the Employer’s
request, as an officer or director (or in such other similar
position).
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2. Term. The
Term of this Agreement shall commence on the Effective Date and shall end on the
third anniversary thereof, subject to the terms and conditions set forth in this
Agreement; provided, however, that beginning on first anniversary of the
Effective Date and each anniversary thereof, the term shall be automatically
extended for an additional one year period, unless the Employer or the Executive
provides the other party not less than 180 days prior written notice that the
term shall not be so extended. The initial term, plus any extension
thereof, shall be the “Term”
3. Compensation.
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(a)
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Base
Salary. During the Term, the Executive will receive an
annual base salary of $219,000. The Board will review the
Executive’s base salary annually and, in its sole discretion and subject
to Section 5(f), may recommend increases to the amount of such base salary
based upon procedures of the Employer that determine adjustments for other
executives of the Employer. The initial annual base salary,
together with any increases, shall be the Executive’s base salary (“Base
Salary”). The Base Salary will be payable in accordance with
the Employer’s regular payroll payment practices but not less frequently
than monthly.
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(b)
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Annual
Bonus. During the Term, the Executive may be eligible
for an incentive bonus payment in an amount and payable at such time or
times as determined by the Board in its sole
discretion.
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EXHIBIT
10.1
4. Fringe Benefits and
Expenses.
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(a)
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Fringe
Benefits. During the Term, the Employer will provide the
Executive with all health and life insurance coverages, disability
programs, tax-qualified retirement plans, equity compensation programs,
and similar fringe benefit plans, paid holidays, paid vacation, and such
other fringe benefits of employment as the Employer may provide from time
to time to actively employed and similarly situated employees
of the Employer. Notwithstanding any provision contained in
this Agreement, the Employer may discontinue or terminate at any time any
employee benefit plan, policy or program described in this Section 4(a),
now existing or hereafter adopted, to the extent permitted by the terms of
such plan, policy or program and will not be required to compensate the
Executive for such discontinuance or termination. Termination or
discontinuance of any such plan, policy or program shall not give the
Executive “Good Reason” (as defined below) to terminate the Term and the
Executive’s employment hereunder.
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(b)
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Expenses. During
the Term, the Employer shall reimburse the Executive for all reasonable
travel, industry, entertainment, and out-of-pocket and miscellaneous
expenses incurred by the Executive in connection with the performance of
the Executive’s business activities under this Agreement in accordance
with the existing policies and procedures of the Employer pertaining to
reimbursement of such expenses to senior
executives.
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(c)
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Vehicle. During
the Term, the Executive shall remain entitled to the use of any vehicle
provided by the Employer as of the Effective Date. The
provision of any replacement vehicle or payment of a vehicle allowance
shall be determined by the Board in the sole discretion and shall be
provided or paid in accordance with the Employer’s policies and procedures
relating to the provision of vehicles and the payment of vehicle
allowances, if any, as may be in effect from time to
time.
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(d)
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Liability
Insurance. The Executive shall be covered by any
liability insurance policies covering directors and officers that the
Employer elects to carry from time to time; provided, however, that
nothing in the foregoing shall be construed as a requirement that the
Employer purchase such liability
insurance.
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5. Termination of
Employment. For purposes of this Agreement, any reference to
the Executive’s “termination of employment” (or any form thereof) shall mean the
Executive’s “separation from service” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulation
§1.409A-1(h).
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(a)
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Death of
Executive. The Term and the Executive’s employment will
terminate upon the Executive’s death and the Executive’s beneficiary (as
designated by the Executive in writing with the Employer prior to the
Executive’s death) will be entitled to the following payments and
benefits:
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(i)
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any
Base Salary that is accrued but unpaid and any business expenses that are
unreimbursed – all, as of the date of termination of employment;
and
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EXHIBIT
10.1
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(ii)
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any
rights and benefits (if any) provided under plans and programs of the
Employer, determined in accordance with the applicable terms and
provisions of such plans and programs (the payments described in Sections
5(a)(i) and (ii) are hereinafter collectively referred to as the “Accrued
Obligations”).
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In the
absence of a beneficiary designation by the Executive, or, if the Executive’s
designated beneficiary does not survive him, payments and benefits described in
this Section 5(a) will be paid to the Executive’s estate. Any
payments due under Section 5(a)(i) shall be made within 30 days after the
date of the Executive’s death.
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(b)
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Disability. The
Term and the Executive’s employment may be terminated by the Employer upon
45 days written notice from the Employer following the determination, as
set forth immediately below, that the Executive suffers from a Permanent
Disability. For purposes of this Agreement, “Permanent
Disability” means a physical or mental impairment that renders the
Executive incapable of performing the essential functions of the
Executive’s job, on a full-time basis, even taking into account reasonable
accommodation required by law, as determined by a physician who is
selected by the agreement of the Executive and the Employer, for a period
of greater than 180 days. During any period that the Executive
fails to perform the Executive’s duties hereunder as a result of a
Permanent Disability (“Disability Period”), the Executive will continue to
receive the Executive’s Base Salary at the rate then in effect for such
period until the Executive’s employment is terminated pursuant to this
Section 5(b); provided, however, that payments of Base Salary so made to
the Executive will be reduced by the sum of the amounts, if any, that were
payable to the Executive at or before the time of any such salary payment
under any disability benefit plan or plans of the Employer and that were
not previously applied to reduce any payment of Base Salary. In
the event that the Employer elects to terminate the Executive’s employment
due to Disability, the Executive will be entitled to payment of the
Accrued Obligations as described in Section 5(a)(ii) of this
Agreement.
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(c)
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Termination of
Employment for Cause. The Employer may terminate the
Term and the Executive’s employment upon notice at any time for
“Cause.”
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EXHIBIT
10.1
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(i)
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For
purposes of this Agreement, “Cause” means: (A) the willful failure by the
Executive to substantially perform the Executive’s duties hereunder (other
than a failure resulting from the Executive’s incapacity because of death
or disability), after notice from the Employer and
a failure to cure such violation within twenty (20) days of said notice;
(B) the willful engaging by the Executive in misconduct injurious to the
Employer; (C) dishonesty, insubordination or gross negligence of the
Executive in the performance of the Executive’s duties; (D) the
Executive’s breach of fiduciary duty involving personal profit; (E) the
Executive’s violation of any law, rule or regulation governing issuers of
publicly traded securities or banks or bank officers or any regulatory
enforcement actions issued by a regulatory authority against the
Executive; (F) conduct on the part of the Executive which brings public
discredit to the Employer and, if the effect may be cured, a failure to
cure within twenty (20) days of the date notice of such conduct is
delivered to the Executive; (G) the Executive’s conviction of or plea of
guilty or nolo contendere to a felony (including conviction of or plea of
guilty or nolo contendere to a misdemeanor that was originally charged as
a felony but was reduced to a misdemeanor as a result of a plea bargain),
crime of falsehood or a crime involving moral turpitude, or the actual
incarceration of the Executive for a period of twenty (20) consecutive
days or more; (H) an act by the Executive affecting any of the Employer’s
employees, customers, business associates, contractors or visitors that an
independent third party decides, after reasonable investigation,
constitutes unlawful discrimination or harassment or violates the
Employer’s policy concerning discrimination or harassment; (I) the
Executive’s theft or abuse of the Employer’s property or the property of
the Employer’s customers, employees, contractors, vendors or business
associates; (J) the direction or recommendation of a state or federal bank
regulatory authority to remove the Executive from the Executive’s
position(s) with the Employer; (K) the Executive’s willful failure to
follow the good faith lawful instructions of the Board with regard to its
operations, after written notice and, if the event may be cured, a failure
to cure such violation within twenty (20) days of the date said notice is
delivered to the Executive; (L) material breach of any contract or
agreement that the Executive entered with the Employer, including a breach
of any of the obligations described in this Agreement and, if the breach
may be cured, a failure to cure such breach within twenty (20) days of the
date notice of such conduct is delivered to the Executive; or (M)
unauthorized disclosure of the trade secrets or Confidential Information
(as defined below) of the Employer, of any of its affiliates, trade
partners or vendors.
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However,
Cause will not arise solely because the Executive is absent from active
employment during periods of vacation, consistent with the Employer’s applicable
vacation policy or other period of absence initiated by the Executive and
approved by the Employer.
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(ii)
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In
the event that the Employer terminates the Executive’s employment for
Cause, the Executive will be entitled to payment of the Accrued
Obligations as described in Section 5(a)(ii) of this
Agreement.
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(d)
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Termination Without
Cause. The Employer may terminate the Term and the
Executive’s employment for any reason upon 60 days prior written notice to
the Executive. If the Executive’s employment is terminated by
the Employer for any reason other than the reasons set forth in
subsections (a), (b) or (c) of this Section 5, the Executive will be
entitled to the following payments and
benefits:
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EXHIBIT
10.1
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(i)
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Payment
of the Accrued Obligations as described in Section 5(a)(ii) of this
Agreement.
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(ii)
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Continuation
of the Executive’s Base Salary in effect on the date of the Executive’s
termination of employment for two years following the date of the
Executive’s termination. The payments due under this
Section 5(d)(ii) shall begin within 60 days following the date of
termination and be made in accordance with the Employer’s normal payroll
practices over such period.
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(iii)
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Continuation
of Executive’s group health, dental and vision insurance coverages in
existence on the date of termination beginning on the date of termination
and continuing for twelve consecutive months thereafter. After
expiration of this period, the Executive shall be eligible to continue
such coverages provided that the Executive properly elects COBRA
continuation coverage and pays the applicable
premiums.
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(e)
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Voluntary Termination
by Executive. If the Executive resigns and voluntarily
terminates the Term and the Executive’s employment with the Employer for
any reason other than for Good Reason (as defined below), the Executive
will be entitled to payment of the Accrued Obligations as described in
Section 5(a)(ii) of this Agreement.
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(f)
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Good Reason
Termination. The Executive may resign and
terminate the Term and the Executive’s employment with the Employer for
Good Reason upon not less than 60 days prior written notice to the
Employer.
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(i)
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For purposes of this Agreement,
the Executive will have “Good Reason” to terminate the Executive’s
employment with the Employer if any of the following events occur without
the Executive’s consent (provided the Employer does not cure the effect of
such event within 30 days following its receipt of written notice of such
event from the Executive).
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(A)
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The
assignment of duties and responsibilities inconsistent with Executive’s
status as Chief Executive Officer of the Employer, unless the Executive
has simultaneously been promoted to a more senior position and has been
assigned substantive duties normally associated with that new
position.
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(B)
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A
reassignment which requires Executive to move his office more than fifty
(50) miles from the location of the Employer’s principal executive
office;
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(C)
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Any
reduction in the Executive’s Base Salary as in effect on the date hereof
or as the same may be increased from time to time, except such reductions
that are the result of a national financial depression, or national or
bank emergency when such reduction has been implemented for the Employer’s
senior management, as a group;
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EXHIBIT
10.1
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(D)
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Any
requirement that the Executive report to a corporate officer or employee
instead of reporting directly to the
Board;
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(E)
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Failure
at any time to obtain an assumption of the obligations under this
Agreement by any successor, regardless of whether such entity becomes a
successor as a result of a merger, consolidation, sale of assets or any
other form of reorganization; and
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(F)
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Any
action or inaction that constitutes a material breach of this Agreement or
any unsuccessful attempt to terminate the Executive for
Cause.
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Notwithstanding the foregoing, Good
Reason shall cease to exist for an event on the 90th day following the later of
its occurrence or the Executive’s knowledge thereof, unless the Executive has
given the Employer written notice of such event and the Executive’s intent to
terminate for Good Reason prior to such date.
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(ii)
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In
the event that the Executive terminates the Term and the Executive’s
employment with the Employer for Good Reason pursuant to this Section
5(f), the Executive will be entitled
to:
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(A)
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Payment
of the Accrued Obligations as described in Section 5(a)(ii) of this
Agreement; and
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(B)
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Continuation
of the Executive’s Base Salary in effect on the date of the Executive’s
termination of employment or, if greater, the Executive’s Base Salary in
effect immediately prior to any event described in Section 5(f)(i)(C) for
two years following the date of the Executive’s termination which shall
begin to be paid within 60 days following the date of termination and be
payable in accordance with the Employer’s normal payroll practices over
such period; and
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(C)
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Continuation
of Executive’s group health, dental and vision insurance coverages in
existence on the date of termination beginning on the date of termination
and continuing for twelve consecutive months thereafter. After
expiration of this period, the Executive shall be eligible to continue
such coverages provided that the Executive properly elects COBRA
continuation coverage and pays the applicable
premiums.
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EXHIBIT
10.1
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(g)
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Cessation of
Term. If Employer elects to cease the automatic
extension of the Term by providing written notice to Executive in
accordance with the provisions of this Section 1, in lieu of continuing
Executive’s employment for the remaining Term, Employer may terminate the
Term and Executive’s employment hereunder and pay Executive the amounts
set forth in Section 5(d).
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(h)
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Expiration of Term of
Agreement. If the Term expires and it is not extended by
the parties, and subject to the Employer’s right to earlier terminate the
Term or the Executive’s employment for Cause, the Executive’s employment
will terminate at the end of such term and the Executive will be entitled
to payment of the Accrued Obligations as described in Section 5(a)(ii) of
this Agreement.
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(i)
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Clawback. Notwithstanding
the foregoing:
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(i)
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In
the event that, following the Executive’s termination (other than for
Cause), within six months following the date of termination, it is later
discovered that Cause to terminate the Executive existed, the Executive
shall forfeit any right to future payments or benefits under this
Agreement (other than payment of the Accrued Obligations described in
Section 5(d)(ii)) and, at the discretion of the Board, shall repay any
payments made by the Employer to the Executive within 30 days following
the determination by the Board that Cause existed, upon receipt of written
notice of the same.
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(ii)
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If
the Employer is required to prepare an accounting restatement due to
material non-compliance of the Employer, as a result of misconduct by the
Executive, with any financial reporting requirement under any applicable
laws, the Executive shall reimburse the Employer for all amounts received
under any incentive compensation plans, programs or arrangements from
Employer during the 12 month period preceding the date of such
restatement.
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The
Executive agrees that the Employer shall be entitled to recovery of its
reasonable costs in enforcing any right described in this Section
5(i).
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(j)
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Golden Parachute
Provisions. Notwithstanding any provision in this
Agreement to the contrary, if any payments or benefits payable or being
provided pursuant to this Agreement, together with any payments or
benefits being provided under any other plan, agreement, or arrangement
with the Employer, constitute “parachute payments” within the meaning of
Section 280G or the Code, the payments or benefits will be reduced to
$1.00 less than the amount that would be considered a “parachute payment”
within the meaning of Section 280G of the
Code.
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6. Change of
Control. In the event of a change of control of the Employer,
the respective rights and obligations of the parties shall be determined
pursuant to the terms of the separate change of control agreement between the
Executive and the Employer. For purposes of clarity, in the
event that the Executive becomes entitled to receive payments or benefits under
such change in control agreement, the Executive shall not be entitled to receive
the payments described in Section 5(d) or (f).
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EXHIBIT
10.1
7. Release. As a condition to
receiving any payments, other than payment of the Accrued Obligations described
in Section 5(a)(ii) and accrued but unpaid bonus (if any), pursuant to this
Agreement, the Executive agrees to release the Employer and all of its
Affiliates, employees and directors from any and all claims that the Executive
may have against the Employer and all of its Affiliates, employees and directors
up to and including the date the Executive signs a Waiver and Release of Claims
(“Release”), and agrees to sign such Release in the form provided by the
Employer. Notwithstanding anything to the contrary in this Agreement,
the Executive acknowledges that the Executive is not entitled to receive, and
will not receive, any payments pursuant to this Agreement unless and until the
Executive provides the Employer with said Release prior to the first date that
payment is to be made or is to commence.
8. Regulatory
Limitations. Except as provided in Section 5(j), if any
payments otherwise payable to the Executive pursuant to this Agreement are
prohibited or limited by any statute, regulation, order, consent decree or
similar limitation in effect at the time the payments would otherwise be paid,
including, without limitation, the provisions of 12 U.S.C. §1828(k) and/or 12
C.F.R. Part 359 (a “Limiting Rule”): (a) the Employer shall pay the maximum
amount that may be paid after applying the Limiting Rule; and (b) shall use
commercially reasonable efforts to obtain the consent of the appropriate agency
or body to pay any amounts that cannot be paid due to the application of the
Limiting Rule. The Executive agrees that the Employer shall not have
breached its obligations under this Agreement if it is not able to pay all or
some portion of any payment due to the Executive as a result of the application
of a Limiting Rule.
9. Covenants.
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(a)
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Non-Competition.
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(i)
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Executive
agrees that, during the Term, including any extension thereof, and for a
period of one year thereafter, the Executive shall not, without the
express written consent of the Employer, directly or indirectly, either
for the Executive or for or with any other person, partnership,
corporation or company, own, manage, control, participate in, consult
with, render services for, permit the Executive’s name to be used or in
any other manner engage in any activity of the kind carried on by the
Employer or any current or future Affiliate within 50 miles of the
Employer’s principal place of business or of the office maintained by any
Affiliate as of the date of termination. For purposes of this
Agreement, the term “participate” includes any direct or indirect interest
in any enterprise, whether as an officer, director, employee, consultant,
partner, investor, sole proprietor, agent, member, representative,
independent contractor, executive, franchisor, franchisee, creditor, owner
or otherwise; provided, however, that the foregoing investment limitations
shall not include passive ownership of less than 1% of the stock of a
publicly held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market, so long as Executive has no
active participation in the business of such
corporation.
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EXHIBIT
10.1
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(ii)
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In
the event of a breach by the Executive of any covenant set forth in this
Section 9(a), the term of such covenant will be extended by the period of
the duration of such breach and such covenant will survive any termination
of this Agreement but only for the limited period of such
extension.
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(b)
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Non-Solicitation.
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(i)
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Executive
agrees that, during the Term, including any extension thereof, and for a
period of one year thereafter, the Executive shall not, without the
express written consent of the
Employer:
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(A)
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Call
upon or solicit, either for the Executive or for any other person or firm
that engages in competition with any business operation of the kind
actively conducted by the Employer or any current or future Affiliate
during the Term, any customer with whom the Employer or any current or
future Affiliate directly conducts business during the Term, any referral
source of the Employer or any current or future Affiliate during the Term
(including, solely by way of example, intermediaries and corporations that
purchase directly from the Employer or any current or future Affiliate);
or
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(B)
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Interfere
with any relationship, contractual or otherwise, between the Employer or
any current or future Affiliate, any customer with whom the Employer or
any current or future Affiliate directly conducts business during the
Term, or any referral source of the Employer of any current or future
Affiliate during the Term; or
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(C)
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Induce
any person who is at the date of termination or was during any of the 12
months preceding the date of termination an employee, officer or agent of
the Employer or any current or future Affiliate to terminate said
relationship.
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(ii)
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In
the event of a breach by the Executive of any covenant set forth in this
Section 9(b), the term of such covenant will be extended by the period of
the duration of such breach and such covenant will survive any termination
of this Agreement but only for the limited period of such
extension.
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(c)
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Confidential
Information. Executive will hold in a fiduciary
capacity, for the benefit of the Employer and its current and future
Affiliates, all trade secrets, secret or confidential information,
knowledge, and data relating to the Employer and any current or future
Affiliate, that shall have been obtained by the Executive in connection
the Executive’s employment with the Employer and that is not public
knowledge (other than by acts by the Executive or the Executive’s
representatives in violation of this Agreement) (collectively,
“Confidential Information”). During the Term and after
termination of the Executive’s employment with the Employer, the Executive
will not, without the prior written consent of the Employer, communicate
or divulge any Confidential Information to anyone other than the Employer
or those designated by it, unless such communication is required pursuant
to a compulsory proceeding in which the Executive’s failure to provide
such Confidential Information would subject the Executive to criminal or
civil sanctions and then only to the extent that the Executive provides
prior notice to the Employer prior to
disclosure.
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EXHIBIT
10.1
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(d)
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Intellectual
Property. The Executive agrees to communicate to the Employer,
promptly and fully, and to assign to the Employer all intellectual
property developed or conceived solely by the Executive, or jointly with
others, during the Term which is within the scope of either the Employer’s
business or any current or future Affiliate’s business, or which utilized
the Employer or Affiliate materials or information. For
purposes of this Agreement, “intellectual property” means inventions,
discoveries, business or technical innovations, creative or professional
work product, or works of authorship. The Executive further
agrees to execute all necessary papers and otherwise to assist the
Employer, at the Employer’s sole expense, to obtain patents, copyrights or
other legal protection as the Employer deems fit. Any such
intellectual property is to be the property of the Employer whether or not
patented, copyrighted or published.
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(e)
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Non-Disparagement. The
Executive agrees that during the Term and following the termination of the
Executive’s employment, the Executive shall not make any public statements
which disparage the Employer or any Affiliate or any of their respective
directors, officers or employees, and the Employer shall make reasonable
efforts to prevent its directors, officers or employees from making any
public statements which disparage the Executive. Nothing in the
foregoing is intended to prohibit the Executive or the Company, its
directors, officers or employees from making truthful statements required
by order of a court, governmental body or regulatory body having
appropriate jurisdiction.
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(f)
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Return of
Property. The Executive agrees that, upon the
termination of the Executive’s employment, the Executive shall promptly
return to Employer any keys, credit cards, passes, confidential documents
or material, or other property belonging to the Employer, and the
Executive shall also return all writings, files, records, correspondence,
notebooks, notes and other documents and things (including any copies
thereof) containing confidential information or relating to the business
or proposed business of the Employer or any Affiliate or containing any
Confidential Information relating to the Employer of any Affiliate, except
any personal diaries, calendars, rolodexes or personal notes or
correspondence.
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(g)
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Cooperation. The
Executive agrees that during the Term and following the termination of the
Executive’s employment, the Executive shall be reasonably available to
testify truthfully on behalf of the Employer or any Affiliate in any
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to assist the Employer, or any Affiliate, in all
reasonable respects in any such action, suit, or proceeding, by providing
information and meeting and consulting with the Board, or their
representatives or counsel, or representatives or counsel to Employer, or
any Affiliate, as requested; provided, however that the same does not
materially interfere with Executive’s then-current professional
activities, and that Executive shall be reasonably compensated for his
time.
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EXHIBIT
10.1
The
restrictions described in this Section 9 may be enforced by the Employer and/or
any successor thereto, by an action to recover payments made under this
Agreement, an action for injunction, or an action for damages. The
provisions of this Section 9 constitute an essential element of this Agreement,
without which the Employer would not have entered into this
Agreement. Notwithstanding any other remedy available to the Employer
at law or at equity, the parties hereto agree that the Employer or any successor
thereto, will have the right, at any and all times, to seek injunctive relief in
order to enforce the terms and conditions of this Section 9.
If the
scope of any restriction contained in this Section 9 is too broad to permit
enforcement of such restriction to its fullest extent, then such restriction
will be enforced to the maximum extent permitted by law, and Executive hereby
consents and agrees that such scope may be judicially modified accordingly in
any proceeding brought to enforce such restriction.
10. Representations of
Executive. The Executive hereby represents and warrants, which
representations and warranties will survive the execution and delivery of this
Agreement, that: (a) Executive is not a party to or otherwise subject to any
other plan, agreement or arrangement that would prohibit Executive from
performing the duties described herein; and (b) Executive has taken all other
steps as may be required by law or by any applicable regulatory body, for
Executive to perform the duties described herein.
11. Assignment and Survivorship of
Benefits.
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(a)
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Employer
Assignment. The Employer may not assign this Agreement
except to an Affiliate. Notwithstanding the foregoing, the
Employer’s obligations hereunder shall be binding legal obligations and
shall inure to the benefit of any successor to all or substantially all of
the Employer’s business by purchase, merger, consolidation, affiliation or
otherwise. The Employer will require any such successor to
expressly assume the obligations of Employer in the same manner and to the
same extent that the Employer would be required to perform it if no such
succession had taken place. Failure of the Employer to obtain
this assumption from any successor shall be a material breach of this
Agreement and shall be considered Good Reason, pursuant to Section
5(f).
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(b)
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Executive
Assignment. No interest of the Executive or the
Executive’s spouse or any other beneficiary under the Agreement, or any
right to receive any payment or distribution hereunder, shall be subject
in any manner to sale, transfer, assignment, pledge, attachment,
garnishment, or other alienation or encumbrance of any kind, nor may such
interest or right to receive a payment or distribution be taken,
voluntarily or involuntarily, for the satisfaction of the obligations or
debts of, or other claims against, the Executive or the Executive’s spouse
or other beneficiary, including claims for alimony, support, separate
maintenance, and claims in bankruptcy
proceedings.
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EXHIBIT
10.1
12. Notices. Any notice
given to either party to this Agreement will be in writing, and will be deemed
to have been given when delivered personally or sent by certified mail, postage
prepaid, return receipt requested, duly addressed to the party concerned, at the
address indicated below or to such changed address as such party may
subsequently give notice of:
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If
to the Employer:
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Attention:
Chair, Board of Directors
000
Xxxxxxx Xxxxxx
Xxxxxxxx,
Xxxx 00000
|
If
to the Executive:
|
Xxxx
X. Xxxxx
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At the
last address on file with the Employer
13. Taxes. Anything in
this Agreement to the contrary notwithstanding, all payments and benefits
required to be made or provided hereunder by the Employer to the Executive will
be subject to withholding of such amounts relating to taxes as the Employer may
reasonably determine that it should withhold pursuant to any applicable law or
regulations. Executive shall be reimbursed for the reasonable costs
of tax preparation assistance for Executive’s personal tax return.
14. Arbitration; Enforcement of
Rights. Any controversy or claim arising out of, or relating
to this Agreement, or the breach thereof, except with respect to Section 9, will
be settled by arbitration in Defiance County, Ohio in accordance with the Rules
of the American Arbitration Association, and judgment upon the award rendered by
the arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. Each party will bear its own costs of arbitration, except
that the parties will share the cost of the arbitrator
equally. Notwithstanding the foregoing, if the Executive is the
prevailing party in the arbitration, the Employer will reimburse the Executive’s
reasonable costs of arbitration, including reimbursement of reasonable
attorneys’ fees.
15. No Mitigation. The
Executive is not required to mitigate the amount of any payment described in
this Agreement by seeking other employment or otherwise, nor will the amount of
any payment or benefit provided for in this Agreement be reduced by any
compensation or benefits the Executive earns, or is entitled to receive, in any
capacity after Termination or by reason of the Executive’s receipt of or right
to receive any retirement or other benefits attributable to
employment.
16. Governing Law; Captions;
Severance. This Agreement will be construed in accordance
with, and pursuant to, the laws of the State of Ohio. The captions of
this Agreement will not be part of the provisions hereof, and will have no force
or effect. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of any other
provision of this Agreement. Except as otherwise specifically
provided in this Section 16, the failure of either party to insist in any
instance on the strict performance of any provision of this Agreement or to
exercise any right hereunder will not constitute a waiver of such provision or
right in any other instance.
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17. Entire Agreement;
Amendment. This instrument contains the entire agreement of
the parties relating to the subject matter hereof, and the parties have made no
agreement, representations, or warranties relating to the subject matter of this
Agreement that are not set forth herein. This Agreement may be
amended only by mutual written agreement of the parties. This
Agreement may be executed in one or more counterparts.
18. Six-Month Distribution Delay for
Specified Employees. Notwithstanding anything in this
Agreement to the contrary, in the event that the Executive is a “specified
employee” (as defined in Section 409A of the Code) of the Employer or any
of its Affiliates, as determined pursuant to the Employer’s policy for
identifying specified employees, on the date of the Executive’s termination of
employment and the Executive 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
applicable, shall not be paid or provided (or begin to be paid or provided)
until the first day of the seventh month following the date of the Executive’s
termination of employment (or, if earlier, the date of the Executive’s
death). The first
payment that can be made to the Executive following such period shall include
the cumulative amount of any payments or benefits that could not be paid or
provided during such period due to the application of Section 409A(a)(2)(B)(i)
of the Code.
19. Compliance with Section 409A of the
Code. This
Agreement is intended, and shall be construed and interpreted, to comply with
Section 409A of the Code and if necessary, any provision shall be held null and
void to the extent such provision (or part thereof) fails to comply with Section
409A of the Code or the Treasury Regulations thereunder. For purposes
of Section 409A of the Code, each payment of compensation under the Agreement
shall be treated as a separate payment of compensation. Any amounts
payable solely on account of an involuntary termination shall be excludible from
the requirements of Section 409A of the Code, either as separation pay or as
short-term deferrals to the maximum possible extent. Further, any
reimbursements or in-kind benefits provided under the Agreement shall be made or
provided in accordance with the requirements of Section 409A of the Code,
including, where applicable, the requirement that (a) any reimbursement is for
expenses incurred during the period of time specified in the Agreement, (b) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other calendar year, (c) the
reimbursement of an eligible expense will be made no later than the last day of
the calendar year following the year in which the expense is incurred, and (d)
the right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit.
20. Nonexclusivity of
Rights. Nothing in this Agreement will prevent or limit the
Executive’s continuing or future participation in any incentive, fringe benefit,
deferred compensation, or other plan or program provided by the Employer and for
which the Executive may qualify, nor will anything herein limit or otherwise
affect such rights as the Executive may have under any other agreements with the
Employer. Amounts that are vested benefits or that the Executive is
otherwise entitled to receive under any plan or program of the Employer at or
after the date of termination of employment, will be payable in accordance with
such plan or program.
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EXHIBIT
10.1
21. Remedies
Cumulative. No remedy conferred upon a party by this Agreement
is intended to be exclusive of any other remedy, and each and every remedy shall
be cumulative and shall be in addition to any other remedy given under this
Agreement or current or future law or in equity. The failure of either party to
insist in any instance on the strict performance of any provision of this
Agreement or to exercise any right hereunder will not constitute a waiver of
such provision or right in any other instance.
22. Opportunity to
Review. The Executive represents that the Executive has been
provided with an opportunity to review the terms of this Agreement with legal
counsel.
23. No Presumption. The
parties agree that this Agreement is the product of negotiations between parties
representing by legal counsel and that the presumption of interpreting
ambiguities against the drafter of this Agreement shall not apply.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
| RURBAN FINANCIAL CORP. | |||
|
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxxx | |
| Its: | Chairman – Board of Directors | ||
| XXXX X. XXXXX | |||
|
|
By:
|
/s/ Xxxx X. Xxxxx | |
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