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EXHIBIT 10.1
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT (this "Agreement"), effective as of the
9th day of December, 2002 (the "Effective Date"), by and between EXCHANGE
BANCSHARES, INC., a holding company organized under the laws of the State of
Ohio and registered under the Bank Holding Company Act of 1956 (the "Company"),
and XXXXXXX X. XXXX XX., a resident of Ohio (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is employed as the President and Chief Executive
Officer of the Company; and
WHEREAS, the Board of Directors of the Company recognizes the possibility
that a change in control of the Company may occur and that such possibility, and
the uncertainty and questions which it may raise among management, may result in
the departure or distraction of key management personnel to the detriment of the
Company and its shareholders; and
WHEREAS, the Board of Directors of the Company believes it is in the best
interests of the Company to enter into this Agreement with the Employee in order
to assure continuity of management of the Company and to reinforce and encourage
the attention and dedication of the Employee to his assigned duties without
distraction in the face of potentially disruptive circumstances arising from the
possibility of a change in control of the Company; and
WHEREAS, the Employee desires to enter into this Agreement in consideration
of his consent to terminate that certain Employment Agreement by and between the
Company and the Employee, dated July 17, 2002; and
WHEREAS, the Board of Directors of the Company has approved and authorized
the execution of this Agreement with the Employee.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto
hereby agree as follows:
1. TERM. The term of this Agreement shall commence on the Effective
Date and shall terminate upon the earlier of (i) the date on which payment is
made of the Change in Control Payment due to the Employee hereunder, or (ii) the
date on which the Employee's employment by the Company comes to an end for any
reason other than in conjunction with a Change in Control as described herein.
2. CHANGE IN CONTROL PAYMENT.
A. CAUSE FOR PAYMENT. Upon the occurrence of a Change in Control and
for a period of one year thereafter, or in the event that during the 120 days
prior to a Change in Control either (i) the Employee is involuntarily terminated
by the Company for any reason other than Cause (as defined below), or (ii) the
Employee voluntarily terminates his employment for any reason, the Company shall
provide a Change in Control Payment to the Employee as set forth below. A
"Change in Control" for the purposes of this Agreement shall mean (i) the
consolidation, merger or other business combination of the Company wherein the
Company is not the surviving entity, (ii) the transfer of all or substantially
all of the assets of the Company to a third party, or (iii) the purchase by a
person, entity, or an affiliated group of persons or entities of 50% or more of
the outstanding voting shares of the Company. For the purposes of this
Agreement, "Cause" shall mean (i) commission of a willful act of dishonesty in
the course of the Employee's duties; (ii) conviction by a court of competent
jurisdiction of a crime constituting a felony or conviction with respect to any
act involving fraud or dishonesty; (iii) the Employee's continued, habitual
intoxication or performance under the influence of controlled substances during
working hours, after the Company shall have provided written notice to the
Employee and given the Employee ten days within which to commence rehabilitation
with respect thereto, and the Employee shall have failed to promptly commence
and diligently continue such rehabilitation; (iv) frequent or extended, and
unjustifiable (not as a result of incapacity or disability) absenteeism which
shall not have been cured within 30 days after the Company shall have advised
the Employee in writing of its intention to terminate the Employee's employment
in the event such condition shall not have been cured; or (v) the Employee's
willful and continued personal misconduct, action, inaction, inability or
refusal to perform his duties and responsibilities, if (A) the Company shall
have given the Employee prior written notice of the reason therefor and (B) a
period of 30 days following receipt by the Employee of such notice shall have
lapsed and the matters which constitute or give rise to such Cause shall not
have been cured or eliminated by the Employee; provided, however, that if such
matters are of a nature that the same cannot be cured or eliminated within such
30 day period, such period shall be extended for so long as the Employee shall
be endeavoring diligently and in good faith to cure or eliminate such matters.
B. AMOUNT OF CHANGE IN CONTROL PAYMENT. The Change in Control Payment shall
be a lump sum payment equal to 2.99 times the greater of (i) the Employee's
annual salary as of the effective date of the Change in Control or (ii)
$120,000.
C. TIMING OF CHANGE IN CONTROL PAYMENT. The Change in Control Payment shall
be paid to the Employee not later than the earlier of (i) 30 days after the
effective date of the Change in Control, or (ii) 30 days after the date of
termination of the Employee's employment if such termination occurs after the
effective date of the Change in Control.
3. OTHER BENEFITS. The Change in Control Payment described in this
Agreement shall be in addition to any other retirement or other benefits payable
to the Employee under any plan, fund or program maintained by the Company.
4. SUCCESSOR. The Company will require any successor as the result of
a Change in Control to assume expressly and to agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform hereunder. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of the Change in Control shall be a breach
of this Agreement and shall entitle the Employee to the Change in Control
Payment from the Company in the same amount and on the same terms as the
Employee would be entitled to hereunder upon the occurrence of a Change in
Control.
5. MISCELLANEOUS.
A. OBLIGATION OF THE COMPANY. The Company, and not the Board of
Directors of the Company or any member thereof, shall be liable for any and all
claims made in connection with this Agreement and for any and all payments to
which the Employee may be entitled under this Agreement. The Agreement shall be
unfunded.
B. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, the heirs and legal
representatives of the Employee, and the successors and assigns of the Company,
except that the Employee may not assign this Agreement.
C. MODIFICATION. This Agreement may not be changed, amended, or
modified except by a writing signed by both parties.
D. NOTICES. Any notice, request, demand, waiver, consent,
approval, or other communication which is required to be or may be given under
this Agreement shall be in writing and shall be deemed given only if delivered
to the party personally or sent to the party by a commercially reputable
overnight delivery service, delivery charges prepaid, to the parties at the
addresses set forth herein or to such other address as either party may
designate from time to time by notice to the other party sent in like manner.
E. GOVERNING LAW. This Agreement constitutes the entire agreement
between the parties and shall be governed by and construed in accordance with
the laws of the State of Ohio applicable to agreements made and to be performed
solely within such state.
F. HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not be deemed to be a part of this
Agreement or to affect the construction or interpretation of this Agreement.
G. NO MITIGATION. The Employee shall not be required to mitigate
the amount of any payment or benefit provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation earned by the
Employee as the result of employment by another employer, by retirement benefits
after the date of termination or otherwise.
H. CONFIDENTIALITY. This Agreement shall be confidential, and the
Employee agrees not to disclose the existence of this Agreement or its terms to
anyone other than the Employee's attorney and the Employee's financial and tax
advisors.
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed as of the Effective Date.
EXCHANGE BANCSHARES, INC. EMPLOYEE
By: /s/Xxxxxx Xxxxxx /s/Xxxxxxx X. Xxxx Xx.
Xxxxxx Xxxxxx Xxxxxxx X. Xxxx Xx.
Name: Xxxxxx Xxxxxx
Title: Chairman
