Exhibit 10.3
FARMERS CITIZENS BANK / FC BANC CORP.
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT, (in addition to and independent of the Contract of
Employment with X.X. Xxxxxx), is made this 20 day of October, 1998, by and
-----
between Farmers Citizens Bank/FC Banc Corp., a state banking association located
in Bucyrus, Ohio (the "Company") and X.X. Xxxxxx (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 20% or more of the
Company's outstanding voting common stock followed within
twenty-four (24) months by replacement of fifty-percent
(50%) or more of the members of the Company's Board of
Directors.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
1.1.3 "Disability" means the Executive suffering a sickness,
accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Executive from
performing substantially all of the Executive's normal
duties for the Company. As a condition to any benefits, the
Company may require the Executive to submit to such physical
or mental evaluations and tests as the Company's Board of
Directors deems appropriate.
1.1.4 "Early Termination" means the Termination of Employment
before Normal Retirement Age for reasons other than death,
Disability, Termination for Cause or following a Change of
Control.
1.1.5 "Early Termination Date" means the month, day and year in
which Early Termination occurs.
1.1.6 "Normal Retirement Age" means the Executive's 65/th/
birthday.
1.1.7 "Normal Retirement Date" means the later of the Normal
Retirement Age or Termination of Employment.
1.1.8 "Plan Year" means a twelve-month period commencing on
January 1 and ending on December 31 of each year. The
initial Plan Year shall commence on the effective date of
this Agreement.
1.1.9 "Termination for Cause" See Section 5.2.
1
1.1.10 "Termination for Employment" means that the Executive ceases
to be employed by the Company for any reason whatsoever
other than by reason of a leave of absence which is approved
by the Company. For purposes of this Agreement, if there is
a dispute over the employment status of the Executive or the
date of the Executive's Termination of Employment, the
Company shall have the sole and absolute right to decide the
dispute.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. Upon Termination of Employment on or after
the Normal Retirement Age for reasons other than death, the Company
shall pay to the Executive the benefit described in this Section 2.1
in lieu of any other benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is
$100,000.00 (one hundred thousand dollars).
2.1.2 Payment of Benefit. The Company shall pay the annual benefit to
the Executive in 12 equal monthly installments payable on the
first day of each month commencing with the month following the
Executive's Normal Retirement Date and continuing for 179
additional months.
2.2 Early Termination Benefit. Upon Early Termination, the Company shall
pay to the Executive the benefit described in this Section 2.2 in lieu
of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
Early Termination Annual Benefit amount set forth in Schedule A
for the Plan Year ending immediately prior to the Early
Termination Date.
2.2.2 Payment of Benefit. The Company shall pay the annual benefit to
the Executive in 12 equal monthly installments payable on the
first day of each month commencing with the month following the
Normal Retirement Age and continuing for 179 additional months.
2.3 Change of Control Benefit. If the Executive is in the active service
of the Company at the time of a Change of Control, the Company shall
pay to the Executive the benefit described in this Section 2.5 in lieu
of any other benefit under this Agreement.
2.3.1 Amount of Benefit. The annual benefit under this Section 2.5 is
the Normal Retirement Benefit amount described in Section
2.1.1.
2.3.2 Payment of Benefit. The Company shall pay the annual benefit
amount to the Executive in 12 equal monthly installments
payable on the first day of each month commencing with the
month following the Termination of Employment and continuing
for 179 additional months.
2.4 Disability Benefit. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Company shall pay to
the Executive the benefit described in this Section 2.4 in lieu of any
other benefit under this Agreement.
2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the
Disability Annual Benefit amount set forth in Schedule A for
the Plan Year ending immediately prior to the date in which the
Termination of Employment occurs.
2.4.2 Payment of Benefit. The Company shall pay the annual benefit
amount to the Executive in 12 equal monthly installments
payable on the first day of each month commencing
2
with the month following the Termination of Employment and
continuing for 179 additional months.
ARTICLE 3
DEATH BENEFITS
3.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's
beneficiary the benefit described in this Section 3.1. This benefit
shall be paid in lieu of the Lifetime Benefits of Article 2.
3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is
the Normal Retirement Benefit amount described in Section
2.1.1.
3.1.2 Payment of Benefit. The Company shall pay the annual benefit to
the beneficiary in 12 equal monthly installments payable on the
first day of each month commencing with the month following the
Executive's death and continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after the benefit
payments have commenced under this Agreement but before receiving all
such payments, the Company shall pay the remaining benefits to the
Executive's beneficiary at the same time and in the same amounts they
would have been paid to the Executive had the Executive survived.
3.3 Death Following Termination of Employment But Before Benefits
Commence. If the Executive is entitled to benefits under this
Agreement, but dies prior to receiving said benefits, the Company
shall pay to the Executive's beneficiary the same benefits, in the
same manner, they would have been paid to the Executive had the
Executive survived to the Normal Retirement Age, however, said benefit
payments will commence upon the Executive's death.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may
revoke or modify the designation at any time by filing a new
designation. However, designations will only be effective if signed by
the Executive and accepted by the Company during the Executive's
lifetime. The Executive's beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases the Executive, or
if the Executive names a spouse as beneficiary and the marriage is
subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's
estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit
to the guardian, legal representative or person having the care or
custody of such minor, incapacitated person or incapable person. The
Company may require proof of incapacity, minority or guardianship as
it may deem appropriate prior to distribution of the benefit. Such
distribution shall completely discharge the Company from all liability
with respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement.
3
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280G of the Code.
5.2 Termination for Cause. If the Company terminates the Executive's
employment for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude; or
5.2.3 Fraud, disloyalty, dishonesty, or willful violation of any law
or significant Company policy committed in connection with the
Executive's employment and resulting in an adverse effect on
the Company.
5.3 Competition After Termination of Employment. Executive agrees that he
will resign from the Board of Directors of the Company and the Bank
and further agrees that he will not, for a period of three years
following termination, disclose, use or otherwise exploit for his own
benefit any confidential information disclosed to him of which he
became aware by reason of his employment with the Company.
5.4 Suicide or Misstatement. No benefits shall be payable if the Executive
commits suicide within two years after the date of this Agreement, or
if the Executive has made any material misstatement of fact on any
application for life insurance purchased by the Company.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against the Agreement (the "Claimant") in writing,
within ninety (90) days of Claimant's written application for
benefits, of his or her eligibility or noneligibility for benefits
under the Agreement. If the Company determines that the Claimant is
not eligible for benefits or full benefits, the notice shall set forth
(1) the specific reasons for such denial, (2) a specific reference to
the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for
the Claimant to perfect his or her claim, and a description of why it
is needed, and (4) an explanation of the Agreement's claims review
procedure and other appropriate information as to the steps to be
taken if the Claimant wishes to have the claim reviewed. If the
Company determines that there are special circumstances requiring
additional time to make a decision, the Company shall notify the
Claimant of the special circumstances and the date by which a decision
is expected to be made, and may extend the time for up to an
additional ninety-day period.
6.2 Review Procedure. If the Claimant is determined by the Company not to
be eligible for benefits, or if the Claimant believes that he or she
is entitled to greater or different benefits, the Claimant shall have
the opportunity to have such claim reviewed by the Company by filing a
petition for review with the Company within sixty (60) days after
receipt of the notice issued by the Company. Said petition shall state
the specific reasons which the Claimant believes entitle him or her to
benefits or to greater or different benefits. Within sixty (60) days
after receipt by the Company of the petition, the Company shall afford
to the Claimant (or counsel) shall have the right to reveiw the
pertinent documents. The Company shall notify the Claimant of its
decision in writing within the sixty-day period, stating specifically
the basis of its decision, written in a manner calculated to be
understood by the Claimant and the specific provisions of the
Agreement on which the decision is based. If, because of the need for
a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the
Company, but notice of this deferral shall be given to the Claimant.
4
ARTICLE 7
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Obligation of Bank and any Successor in Interest. The Company
expressly agrees that it shall not merge or consolidate into or with
another company/bank or sell substantially all of its assets to
another bank/company, firm or person until such bank/company, firm or
person expressly agrees, in writing, to assume and discharge the
duties and obligations of the bank/Company under the agreement. This
agreement shall be binding upon the parties hereto, their successors,
beneficiary(ies), heirs and personal representatives.
8.2 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
right to discharge the Executive. It also does not require the
Executive to remain an employee nor interfere with the Executive's
right to terminate employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this
Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of Ohio, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company
to pay such benefits. The rights to benefits are not subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors. Any
insurance on the Executive's life is a general asset of the Company to
which the Executive and beneficiary have no preferred or secured
claim.
8.7 Recovery of Estate Taxes. If the Executive's gross estate for federal
estate tax purposes included any amount determined by reference to an
on account of this Agreement, and if the beneficiary is other than the
Executive's estate, then the Executive's estate shall be entitled to
recover from the beneficiary receiving such benefit under the terms of
the Agreement, an amount by which the total estate tax due by the
Executive's estate, exceeds the total estate tax which would have been
payable if the value of such benefit had not been included in the
Executive's gross estate. If there is more than one person receiving
such benefit, the right of recovery shall be against each such person.
In the event the beneficiary has a liability hereunder, the
beneficiary may petition the Company for a lump sum payment in an
amount not to exceed the beneficiary's liability hereunder.
8.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof.
No rights are granted to the Executive by virtue of this Agreement
other than those specifically set forth herein.
8.9 Administration. The Company shall have powers which are necessary to
administer this Agreement, including, but not limited to:
5
8.9.1 Interpreting the provisions of the Agreement;
8.9.2 Establishing and revising the method of accounting for the
Agreement;
8.9.3 Maintaining a record of benefit payments; and
8.9.4 Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
8.10 For the purposes of the Employee Retirement Income Security Act of
1974, if applicable, the Company shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and
the delegation of ministerial duties to qualified individuals.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer has
signed this agreement.
EXECUTIVE: COMPANY
FARMERS CITIZENS BANK / FC
BANC CORP
/s/ X.X. Xxxxxx /s/ Xxxxxx X. Xxxx
-------------------- --------------------------------
X.X. XXXXXX By
Title
6
SCHEDULE A
FARMERS CITIZENS BANK
SALARY CONTINUATION AGREEMENT
X. X. Xxxxxx
-----------------------------------------------------------------------------------------------------------------------------
Disability
Early Term. Change of Annual
Plan Early Term. Vested Annual Benefit Control Annual Benefit
Plan Year Accrual Vesting Accrual Payable Benefit Payable Payable
Year Ending Benefit Level Balance Schedule Balance @NRD* Immediately Immediately
-----------------------------------------------------------------------------------------------------------------------------
1 30-Nov-97 100,000 31,373 100.00% $ 31,373 10,986 100,000 $ 3,598
2 30-Nov-98 100,000 65,351 100.00% $ 65,351 21,130 100,000 $ 7,494
3 30-Nov-99 100,000 102,148 100.00% $102,148 30,497 100,000 $ 11,714
4 30-Nov-00 100,000 142,000 100.00% $142,000 39,145 100,000 $ 16,284
5 30-Nov-01 100,000 185,159 100.00% $185,159 47,131 100,000 $ 21,234
6 30-Nov-02 100,000 231,901 100.00% $231,901 54,505 100,000 $ 26,594
7 30-Nov-03 100,000 282,522 100.00% $282,522 61,314 100,000 $ 32,399
8 30-Nov-04 100,000 337,344 100.00% $337,344 67,601 100,000 $ 38,686
9 30-Nov-05 100,000 396,717 100.00% $396,717 73,406 100,000 $ 45,495
10 30-Nov-06 100,000 461,018 100.00% $461,018 78,766 100,000 $ 52,869
11 30-Nov-07 100,000 530,656 100.00% $530,656 83,716 100,000 $ 60,855
12 30-Nov-08 100,000 606,073 100.00% $606,073 88,286 100,000 $ 69,503
13 30-Nov-09 100,000 687,750 100.00% $687,750 92,506 100,000 $ 78,870
14 30-Nov-10 100,000 776,207 100.00% $776,207 96,402 100,000 $ 89,014
15 30-Nov-11 100,000 872,005 100.00% $872,005 100,000 100,000 $100,000
* NRD - Normal Retirement Date means the Executive's 65/th/ birthday
7
FIRST AMENDMENT
TO THE
FARMERS CITIZENS BANK/FC BANC CORP.
SALARY CONTINUATION AGREEMENT
DATED OCTOBER 20, 1998
FOR
X.X. XXXXXX
THIS AMENDMENT executed on this 11/th/ day of November, 1999, by and
------
between FARMERS CITIZENS BANK/FC BANC CORP., located in Bucyrus, Ohio (the
"Company") and X. X. XXXXXX (the "Executive").
On October 20, 1998, the Company and the Executive executed the FARMERS
CITIZENS BANK/FC BANC CORP. SALARY CONTINUATION AGREEMENT (the "Agreement").
The undersigned hereby amends, in part, said Agreement to revise the excess
parachute provision and clarify the effective date of the plan, which was
verbally agreed upon prior to the execution date.
The following new Article 1.1.11 shall be added to the Agreement:
1.1.11 "Effective Date" means November 30, 1996.
Article 2.3 of the Agreement shall be deleted in its entirety and the
following new Article 2.3 shall be added to the Agreement:
2.3 Change of Control Benefit. If the Executive is in the active service
of the Company at the time of a Change of Control, the Company shall pay to the
Executive the benefit described in this Section 2.3 in lieu of any other benefit
under this Agreement.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Normal Retirement Benefit amount described in Section 2.1.1.
2.3.2 Payment of Benefit. The Company shall pay the annual benefit
amount to the Executive in 12 equal monthly installments payable on the
first day of each month commencing with the month following the Executive's
Termination of Employment. The annual benefit shall be paid to the
Executive for 15 years.
2.3.3 Excess Parachute Payment. The Company shall pay the entire
benefit set forth in this Section 2.3, including any part of the benefit
that would create an excise tax under the excess parachute rules of Section
280G of the Code and the regulations thereunder. The Company agrees to pay
any excise tax attributable to benefits paid under this Section 2.3.
Article 5.1 of the Agreement shall be deleted in its entirety.
IN WITNESS OF THE ABOVE, the Executive and the Company have agreed to this
First Amendment.
Executive: Company:
FARMERS CITIZENS BANK/
FC BANC CORP.
/s/ X.X. Xxxxxx
----------------------
X.X. Xxxxxx By /s/ Xxxxxx X. Xxxx
----------------------
Title /s/ Chairman
-------------------
8
