Executive Employment Contract
EXHIBIT 10.5
This Contract is made as of October 24, 2005 (“Effective Date”), between Commercial
Bancshares, Inc. (“CBS”), an Ohio corporation having an address of 000 X. Xxxxxxxx Xxxxxx, X.X. Xxx
00, Xxxxx Xxxxxxxx, Xxxx 00000, and Xxxxx X. Xxxx (“Xx. Xxxx”), having an address of
______, for Xx. Xxxx’x employment by CBS as Chief Financial
Officer (“CFO”) of CBS.
BACKGROUND
A. CBS desires to employ Xx. Xxxx under the terms and conditions set forth in this
Contract.
B. Xx. Xxxx desires to be employed by CBS under the terms set forth in this Contract.
C. CBS has sent to Xx. Xxxx, and Xx. Xxxx has accepted, a letter of intent (“Letter of
Intent”) to enter into an employer-employee relationship. A copy of the Letter of Intent is
attached to this Contract as Exhibit A.
In consideration of the promises contained in this Contract, the parties agree as follows:
1. Employment. Upon the terms and subject to the conditions of this Contract, CBS hereby agrees to
employ Xx. Xxxx. Upon the terms and subject to the conditions of this Contract, Xx. Xxxx agrees to
serve as a full time employee of CBS.
2. Services rendered.
(a) General. Xx. Xxxx shall render services and perform the duties of the position of
CFO of CBS. Subject to Sections 2(b) and 2(d), Xx. Xxxx shall perform such other duties and have
such other responsibilities for CBS and its affiliates as are of the same character and nature as
those typically performed by the chief financial officer of a bank holding company of comparable
size and with a comparable market to that of CBS.
(b) Reporting and authority. Xx. Xxxx shall report to and be subject to the
supervision and direction of the Chief Executive Officer of CBS (the “CEO”). Xx. Xxxx shall have
the authority set by the CBS Code of Regulations and the authority delegated by the Board.
(c) Full-time employee. Xx. Xxxx shall devote his full-time employment during the
term of this Contract to the faithful and diligent performance of his duties for CBS. Xx. Xxxx
shall not engage in other employment or business activities, whether or not the employment or
activities are pursued for gain, profit, or other pecuniary advantage without the prior written
consent of CBS.
(d) Adherence to standards. Xx. Xxxx shall perform all duties in a competent and
professional manner in accordance with applicable accounting and financial reporting standards.
Xx. Xxxx shall abide by the Articles of Incorporation and Code of Regulations of CBS; the rules,
regulations, policies, and performance objectives of CBS as they exist from time to time;
applicable ethical and business standards; and the law, including, but not limited to, the
Xxxxxxxx-Xxxxx Act of 2002 and the regulations promulgated under the act. The parties understand
that collaborative goals and objectives will be developed, and that progress towards these
established criteria will be used to determine performance.
3. Compensation. “Compensation” includes base salary and employee benefits.
(a) Base salary. During the initial term of this Contract, CBS shall pay Xx. Xxxx a
base salary of $120,000, subject to all applicable withholdings, in accordance with the then
current policies of CBS for executive compensation. The base salary provided by this Section 3(a)
as adjusted under Section 3(c) may be called “base salary”.
(b) Employee benefits. In addition to the base salary, CBS shall provide to, or for
the benefit of, Xx. Xxxx, the following employee benefits:
1.
| [i] | Vacation and sick leave. Participation in the vacation and sick leave plan maintained for executives of CBS, which includes four weeks of vacation each year. | |||
| [ii] | Business expense reimbursement. Reimbursement for, or payment of, the reasonable business and entertainment expenses incurred by Xx. Xxxx on behalf of CBS pursuant to the written policies of CBS or as otherwise approved by the Board. | |||
| [iii] | Continuing education/seminars. Reimbursement for reasonable expenses incurred by Xx. Xxxx for continuing education to maintain his status as a Certified Public Accountant. Attendance at continuing education programs and seminars shall not constitute vacation time, if the attendance is approved by the CEO or Chair of the Board. | |||
| [iv] | Benefit plans. Participation in the retirement and welfare benefit plans made available to the employees of CBS and in any such other similar plans maintained by CBS on the same basis as the other executive employees of CBS who participate in such plans. | |||
| [v] | Deferred compensation program. Participation in CBS’s deferred compensation program to the extent authorized by law. | |||
| [vi] | Health and disability insurance plans. Participation in the family group health, disability, and other insurance plans made available to the employees of CBS and in any such other similar plans maintained for the executives of CBS on the same basis as the other executives participating in such plans. | |||
| [vii] | Life insurance plans. A term life insurance policy upon the life of Xx. Xxxx in an amount equal to one and one-half times his annual base salary continuing on if Xx. Xxxx becomes partially or permanently disabled. | |||
| [viii] | Memberships. Reimbursement for, or payment of, the membership dues and other expenses required to maintain a membership of Xx. Xxxx in a single health club or other club or organization that CBS determines to be beneficial to CBS. | |||
| [ix] | Automobile allowance. A $700 per month automobile expense allowance to reimburse Xx. Xxxx for some or all of the cost of maintaining and operating an automobile for use in the performance of Xx. Xxxx’x duties under this Contract. Xx. Xxxx also shall receive reimbursement for mileage relating to his use of the automobile to perform his duties under this Contract at a rate equal to one-half (1/2) of the standard mileage rate established annually by the Internal Revenue Service. Xx. Xxxx shall maintain the automobile in first-class condition and insure that the automobile is available for Xx. Xxxx’x use in the business of CBS. |
(c) Reports of use of employee benefits. Xx. Xxxx shall submit regular reports of personal
use of the employee benefits required under the Internal Revenue Code to be treated as taxable
income to Xx. Xxxx in order to allow CBS to determine the amount that must be reported to the
Internal Revenue Service as compensation to Xx. Xxxx. In providing the employee benefits under
Section 3(b), the Board may determine that the payment for any or all of such employee benefits
shall be taken from the pre-tax salary of Xx. Xxxx, to the extent permissible under applicable law.
The benefits provided under Section 3(b) and pursuant to annual adjustments, if any, under
Section 3(d) may be called “employee benefits”.
(d) Annual review. Xx. Xxxx’x base salary and employee benefits will be reviewed and,
in the discretion of CBS, shall be subject to adjustment not less frequently than annually, at the
end of each calendar year during the term of this Contract. Any adjustments to Xx. Xxxx’x base
salary and employee benefits (including any decision not to adjust base salary or employee
benefits) shall be made in the sole discretion of the Board or a committee of the Board.
4. Term and termination.
2.
(a) Term; renewal; and non-renewal. Xx. Xxxx’x employment and this Contract are
effective as of the Effective Date and shall remain in full force and effect for a period expiring
October 24, 2006, unless earlier terminated. Xx. Xxxx’x employment and this Contract shall be
renewed automatically for a one year period following the conclusion of the original term and
following the end of each subsequent one year period upon the terms and conditions set forth in
this Contract, unless either party gives written notification to the other party of the intention
not to renew this Contract or to alter any of its terms and conditions not less than 60 days prior
to the termination hereof.
(b) Termination other than expiration of term.
(1) Termination by CBS without cause. CBS may terminate Xx. Xxxx’x employment without
cause by giving Xx. Xxxx a notice of termination. The notice of termination without cause shall be
effective upon the earlier of actual receipt by Xx. Xxxx or two days after mailing by first class
mail. If CBS terminates the employment of Xx. Xxxx without cause, CBS shall provide Xx. Xxxx with
twelve (12) consecutive months of continuing compensation commencing upon termination. CBS shall
pay the base salary component of the continuing compensation in arrears on the last day of each
month commencing on the last day of the first month after the month in which termination has
occurred. A termination of Xx. Xxxx’x employment voluntarily by Xx. Xxxx, a termination of Xx.
Xxxx’x employment arising out of illness or disability, and a termination of Xx. Xxxx’x employment
after a change in control will not be a termination without cause under this subsection.
(2) Termination by Xx. Xxxx. Xx. Xxxx may terminate his employment by giving CBS sixty
(60) days notice of his intention to resign. If Xx. Xxxx voluntarily terminates his employment,
CBS will not be obligated to pay continuing compensation after the date of termination, except as
required by law.
(3) Termination by CBS for cause. CBS may terminate Xx. Xxxx’x employment for cause by
giving Xx. Xxxx notice of termination for cause. The notice of termination for cause is not
required to describe the cause or causes, but must state that “Your employment is hereby terminated
for cause”. The notice of termination for cause shall be effective upon the earlier of actual
receipt by Xx. Xxxx or two business days after mailing by first class mail. If CBS terminates Xx.
Xxxx’x employment for cause, CBS will not be obligated to pay or provide any compensation of any
type after the date of termination, except as required by law. “Cause” includes, but is not
limited to, conduct by Xx. Xxxx concerning any one or more of the
following: [i] failure to
adhere to ethical standards or the law; [ii] moral and ethical misdeeds conducted on the job; [iii]
failure to carry out duties of employment or to carry out directions of the CEO; [iv] willful
misconduct; [v] conviction of a felony; or [vi] conduct that otherwise interferes with the
performance of Xx. Xxxx’x duties or CBS’s business, including any conduct that adversely reflects
upon CBS or its business and any conduct committed during or outside of the employment relationship
that, reasonably considered, xxxxx the reputation of CBS. As used in this subsection, “conduct”
includes one or more acts, one or more failures to act, or any combination of an act, multiple
acts, a failure to act, or multiple failures to act.
(4) Termination upon permanent disability. Xx. Xxxx’x employment shall terminate upon the
permanent disability of Xx. Xxxx. “Permanent disability” means Xx. Xxxx’x physical or mental
inability to perform the services required under this Contract caused by a physical or mental
condition or impairment for a period exceeding 180 days. If a disability prevents Xx. Xxxx from
performing the services required under this Contract, Xx. Xxxx shall receive such short-term and
long-term disability coverage as shall then be available to employees of CBS. CBS will not
otherwise be obligated to pay any continuing compensation upon the permanent disability of Xx.
Xxxx, except as required by law.
(5) Termination after a change in control.
(i) When a termination after a change in control occurs.
A termination after a change in control occurs [i] when, within one year after a change in
control, Xx. Xxxx’x employment is terminated without cause; [ii] when, within one year after a
change in control, Xx. Xxxx resigns because he has [a] been demoted, [b] had his compensation
reduced, [c] had his principal place of employment transferred away from Wyandot County, Ohio or a
county contiguous
3.
thereto, or [d] had his job title, status or responsibility materially reduced;
or [iii] when, [a] Xx. Xxxx’x employment is terminated by CBS without cause, [b] there is a change
in control within one (1) year following the termination, and [c] Xx. Xxxx’x termination of
employment [1] was at the request of a third party who has taken steps reasonably calculated to
effect a change in control or [2] was otherwise in anticipation of a change in control. A
termination of employment [i] upon expiration of the term of this Contract, [ii] for cause, or
[iii] upon the permanent disability of Xx. Xxxx is not a termination after a change in control.
(ii) Continuing compensation after termination after a change in control.
If Xx. Xxxx’x employment is terminated after a change in control, CBS shall provide Xx. Xxxx
eighteen (18) consecutive months of continuing compensation commencing upon termination. CBS shall
pay the base salary component of the continuing compensation in arrears on the last day of each
month commencing on the last day of the first month after the month in which termination has
occurred.
(iii) No parachute payments.
Notwithstanding any other provision of this Contract or of any other agreement, contract or
understanding between Xx. Xxxx and CBS or any affiliate of CBS now existing or later arising, Xx.
Xxxx shall not have any right to receive any compensation or benefit to the extent that the sum of
all payments to or benefits received by or on behalf of Xx. Xxxx from CBS or any of its affiliates
would cause any payment or benefit to be considered a “parachute payment” under 28 U.S.C. §
280G(b)(2), as amended (“Parachute Payment”). If the receipt by or on behalf of Xx. Xxxx of any
payment or benefit from CBS or an affiliate would cause Xx. Xxxx to be considered to have received
a Parachute Payment, then Xx. Xxxx may designate those payments or benefits that should be reduced
or eliminated so as to avoid having a payment or benefit deemed a Parachute Payment. Any
determination in writing by CBS’s independent public accountants (“Accountants”) of the value of
payments and benefits includable in the calculation of a Parachute Payment shall be conclusive and
binding upon Xx. Xxxx and CBS for all purposes. For purposes of making the calculations required
by this subsection, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations concerning the application
of 28 U.S.C. §§ 280G and 4999, as amended. CBS and Xx. Xxxx shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to make a
determination under this subsection. CBS shall pay the costs for a determination by the
Accountants under this subsection.
(iv) Change in control.
A “change in control” occurs on the date of a transaction pursuant to which
| [i] | Any person or group (as defined for purposes of §§ 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)) is or becomes the “beneficial owner” (as defined in Rule 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of securities of CBS representing 50% or more of the combined voting power of CBS’s then outstanding securities; | |||
| [ii] | A merger, consolidation, sale of assets, reorganization, or proxy contest is consummated and, as a consequence, members of the Board in office immediately prior to the transaction or event constitute less than a majority of the Board after the transaction or event; | |||
| [iii] | During any period of twenty-four (24) consecutive months, individuals who at the beginning of the period constitute the Board (including any director whose appointment, selection, or nomination was approved by a vote of a majority of the directors who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board; or | |||
| [iv] | A merger, consolidation or reorganization is consummated with any other corporation or entity pursuant to which the shareholders of CBS immediately prior to the merger, consolidation or reorganization do not immediately thereafter directly or indirectly own |
4.
| more than fifty percent (50%) of the combined voting power of the voting securities entitled to vote in the election of directors of the merged, consolidated or reorganized entity. |
No person shall be deemed to be the beneficial owner of, or to beneficially own, any security
beneficially owned by another person solely by reason of any revocable proxy, or any other
agreement, arrangement or understanding if the revocable proxy, agreement, arrangement, or
understanding may be revoked or terminated or if the persons would not otherwise be deemed to be a
group under § 13(d) of the Exchange Act or otherwise be deemed to be acting in concert.
For purposes of this definition of change in control, [i] neither CBS nor any subsidiary of
CBS, including, without limitation, any trust department or designated fiduciary or other trustee
of such trust department of CBS or a subsidiary of CBS, [ii] no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee pension, or other employee benefit plan of
CBS or any of its subsidiaries, and [iii] no trustee of any such plan in its capacity as trustee, shall be treated as
a person or group that is a beneficial owner of securities of CBS.
(6) Continuing compensation calculations. “Continuing compensation” means [i] an
amount equal to 1/12 of Xx. Xxxx’x annual base salary in effect on the effective date of the notice
of termination determined under the then current policies of CBS for executive compensation plus
[ii] one month of Xx. Xxxx’x annual employee benefits under Section 3(b) of this Contract, except
for reimbursement of [a] business expenses incurred after termination, [b] continuing education and
seminar programs occurring after termination, [c] membership expenses in clubs and organizations
(except for minimum costs necessary to maintain membership for six months after termination), and
[d] mileage relating to use of the automobile after termination. Employee benefits shall be
reduced by any similar benefits received by or accruing to Xx. Xxxx from third parties during the
period during which Xx. Xxxx receives continuing compensation. Federal, state, and local taxes,
social security contributions, and other normal deductions will be withheld from continuation
compensation. Payment of continuing compensation, including the timing and amount of each payment,
shall be subject to the Treasury Regulations concerning severance pay issued under 28 U.S.C. §
409A. If Xx. Xxxx dies before receiving all continuing compensation due, the balance of all
continuing compensation then due shall be provided to the personal representative or other designee
of Xx. Xxxx, except for payments for life insurance premiums and retirement plan contributions.
(c) Consequences of termination of employment. Except for post-employment obligations
under this subsection and post-employment obligations concerning continuing compensation,
non-competition, and confidentiality, upon termination of Xx. Xxxx’x employment for any reason, [i]
this Contract shall terminate; [ii] Xx. Xxxx’x employment shall terminate for all affiliates of
CBS; [iii] Xx. Xxxx shall cease all activity on behalf of CBS and its affiliates; [iv] Xx. Xxxx
shall automatically, without further action by either party, be discharged from all directorships
and offices of CBS and all directorships and offices of affiliates of CBS held by Xx. Xxxx; and [v]
Xx. Xxxx shall promptly deliver to CBS all property and all copies of property (regardless of form,
and including (but not limited to) all documents, memoranda, records, specifications, electronic
and digital media and other writings and materials) of CBS and all affiliates of CBS under his
possession, custody or control, including (but not limited to) keys, plans, designs, computer
programs, computer lists, prospect lists, records, letters, notes, reports, financial information,
and all other materials relating to CBS, its subsidiaries and its affiliates, their businesses, or
their clients and customers. Xx. Xxxx agrees that provisions of this subsection related to
resignation are reasonable and that remedies at law would be inadequate for a breach of the
provisions of this subsection. For these reasons, CBS may enforce the obligations of Xx. Xxxx
under this subsection by injunctive relief, including a temporary restraining order, a preliminary
injunction, and a permanent injunction and by an award for fees, costs, and expenses incurred by
CBS to enforce this subsection, including (but not limited to) attorneys’ fees, costs and expenses,
and other expenses incurred to enforce this subsection.
(d) Employment after termination. Xx. Xxxx shall notify CBS in writing within 24
hours after accepting full or part-time employment with a third party.
5.
(e) Suspension and removal. If Xx. Xxxx is suspended or temporarily prohibited from
performing his duties for CBS or its affiliates as a result of any regulatory action, CBS’s
obligations under this Contract shall be suspended as of the date of service of notice of the
regulatory action (unless the suspension or prohibition is stayed by appropriate proceedings). If
the charges in the notice are dismissed, CBS may, in its sole discretion, [i] pay Xx. Xxxx all or
part of the compensation withheld while its obligations under this Contract were suspended, and
[ii] reinstate (in whole or in part) any of its other obligations under this Contract that were
suspended. If Xx. Xxxx is removed or permanently suspended from performing his duties for CBS or
its affiliates as a result of any regulatory action, all obligations of CBS under this Contract
will terminate as of the effective date of the action, and CBS will not be obligated to pay or
provide any compensation of any type to Xx. Xxxx, except as required by law.
5. Noncompetition. During the initial term of this Contract and any renewal term, and for a
period of one year following termination of this Contract for any reason, Xx. Xxxx shall not
provide services similar to those provided under this Contract to any bank, financial institution or bank holding company,
or any affiliate of a bank, financial institution or bank holding company, within a fifty (50) mile
radius of Upper Sandusky, Ohio.
During the term of this Contract (initial term and any renewal period) and for a period of one
year thereafter, Xx. Xxxx (for himself or on behalf of a third party) shall not employ, offer to
employ, or solicit employment of any employee of CBS or any of its affiliates, subsidiaries or any
professional under contract with CBS or any of its subsidiaries.
Xx. Xxxx agrees that he has received consideration to which he was not otherwise entitled in
return for his obligations under this Section 5, and that the provisions of this Section 5 are
reasonable and necessary to protect the legitimate business interests of CBS, and are reasonable
with respect to time, territory, and business. Xx. Xxxx shall pay any and all legal fees, costs,
and other expenses incurred by CBS in the course of legal action to enforce the provisions of this
Section 5. Xx. Xxxx agrees that the remedies at law for a breach of this Section 5 would be
inadequate to protect CBS because money damages would be difficult, if not impossible, to ascertain
and would be estimable only by conjecture, and therefore, Xx. Xxxx agrees that CBS will be entitled
to injunctive relief, including a temporary restraining order, a preliminary injunction and a
permanent injunction for any such breach as well as all reasonable attorneys’ fees, costs and other
expenses incurred to enforce this Section 5. The duty to arbitrate disputes under this Contract
shall not apply to any claim for violation of this Section 5.
The obligations of Xx. Xxxx under this Section 5 shall survive the termination of the Contract
for any reason.
6. Confidentiality. Xx. Xxxx hereby acknowledges that he may be required to handle
Confidential Business Information (as defined below) in the performance of his responsibilities.
Xx. Xxxx is aware that Confidential Business Information is proprietary information to CBS or the
party supplying it and the exclusive property of CBS or its clients and customers, and Xx. Xxxx
shall not disclose Confidential Business Information in any manner at any time, to others inside or
outside CBS or to unauthorized employees and officers of CBS. Unauthorized disclosure or other
mishandling of Confidential Business Information may result in termination of Xx. Xxxx’x employment
for cause and in other appropriate actions. Xx. Xxxx agrees that his obligation not to reveal
Confidential Business Information will remain in force permanently, including in the event that [i]
Xx. Xxxx’x authorization to handle Confidential Business Information is revoked while still under
contract with CBS, and [ii] this Contract or Xx. Xxxx’x employment with CBS is terminated.
Except as CBS may require or otherwise consent to in writing, Xx. Xxxx shall not, at any time
during or subsequent to the termination of this Contract disclose or use in any way any information
or knowledge or data received or developed while providing services to CBS, including but not
limited to, plans, designs, formulas, business processes, methods, test data, inventions,
discoveries, computer programs, customer/client lists, prospect lists, financial information, and
trade secrets of CBS or its customers (collectively, “Confidential Business Information”).
6.
In addition to any other remedies CBS may have at law or in equity, Xx. Xxxx agrees that CBS
will be entitled to a restraining order, injunction, or similar remedy to enforce the terms of this
section, as well as all reasonable attorneys’ fees, costs, and other expenses incurred to enforce
this section. The duty to arbitrate disputes under this Contract shall not apply to any claim for
a violation of this section or Xx. Xxxx’x obligation to return property of CBS upon termination of
employment. The obligations of Xx. Xxxx under this section shall survive the termination of this
Contract for any reason.
7. Indemnification. Subject to any other applicable statutory or regulatory standard or
restriction, CBS shall indemnify Xx. Xxxx for any and all acts or omissions of Xx. Xxxx related in
any way to his employment with CBS, provided Xx. Xxxx acted in good faith, in a manner reasonably
believed to be in, or not opposed to, the best interests of CBS, and with the care that an ordinary
prudent person in a like position would use under similar circumstances. Notwithstanding the
preceding sentence, CBS shall not be obligated to indemnify Xx. Xxxx when such indemnification
would be contrary to law or public policy or appropriate ethical standards.
8. Validity. The invalidity or unenforceability of any particular provision of this Contract
shall not affect the validity or enforceability of any other provision contained in the Contract.
9. Choice of Law. This Contract and the interpretation of each of its provisions shall be
governed by the laws of the State of Ohio and the venue of any dispute or litigation shall be
Wyandot County, Ohio. The rights of the parties under this Contract will likewise be governed by
the laws of the State of Ohio.
10. Entire Contract. CBS and Xx. Xxxx hereby incorporate the Letter of Intent into this
Contract. This Contract contains the complete agreement between the parties concerning the
subjects covered by this Contract. This Contract supersedes any and all prior contracts and
understandings between CBS and Xx. Xxxx. The provisions of this Contract are solely for the
benefit of the parties to this Contract and not for the benefit of any other persons or legal
entities.
11. Assignment. This Contract is binding on and inures to the benefit of successors and
assigns of CBS. Neither this Contract nor any rights hereunder shall be assignable or otherwise
subject to hypothecation by Xx. Xxxx.
12. Amendments. No change, waiver, or amendment to this Contract, in any form, shall be
binding on the parties unless signed in writing by the CEO or the Chair of the Board of CBS and Xx.
Xxxx. No representations have been made by CBS or Xx. Xxxx concerning the terms, conditions, and
agreements of the contractual relationship covered by this Contract other than those
representations contained in this Contract and no representations made during the course of
performance of services under this Contract can alter any of the provisions of this Contract
(unless such representation is in a signed writing as provided in the preceding sentence).
13. Arbitration. CBS and Xx. Xxxx agree to work in good faith to resolve any disputes arising
under this Contract. Except as otherwise provided in this Contract, any controversy or claim
arising out of or relating to the interpretation or application of this Contract, or any breach
hereof, shall be settled by arbitration in Wyandot County in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association then in effect, and judgment upon the
award rendered by the arbitrator(s) shall be final and binding on the parties hereto and may be
entered in any court having jurisdiction thereof.
In Witness Whereof, the parties hereto have executed this Contract effective as of the day and
year first above written.
| Commercial Bancshares, Inc. | ||||||||||
By
|
/s/ Xxxxx X. Xxxx | By | /s/ Xxxxxx X. Xxxxxx | |||||||
| Xxxxx X. Xxxx | Xxxxxx X. Xxxxxx | |||||||||
Its Senior Vice President and Chief Financial Officer
|
Its President and Chief Executive Officer |
7.
Exhibit A
June 27, 2005
Xx. Xxxxx Xxxx
0000 Xxxxxxx Xxx
Xx. Xxxxx, Xxxxxxx 00000
0000 Xxxxxxx Xxx
Xx. Xxxxx, Xxxxxxx 00000
Dear Xxxxx:
The Commercial Savings Bank is pleased to offer you the opportunity to join us as our Senior Vice
President/Chief Financial Officer. Your benefits are as follows:
Salary
$120,000.00 annually commencing your first day of employment. You will be eligible for a review in 90 days at which time you will be named Executive Vice President.
$120,000.00 annually commencing your first day of employment. You will be eligible for a review in 90 days at which time you will be named Executive Vice President.
Health and Dental Benefits
Family coverage fully paid by the Company. By the terms of our health and dental contract there is normally a 45 day wait for coverage. We will attempt to have this waived and if unsuccessful, the Company will pay for all COBRA coverage you may elect from your previous employer.
Family coverage fully paid by the Company. By the terms of our health and dental contract there is normally a 45 day wait for coverage. We will attempt to have this waived and if unsuccessful, the Company will pay for all COBRA coverage you may elect from your previous employer.
Other Insurance Benefits
BOLI coverage at the equivalent of three times salary upon employment. Also, there are other standard insurance benefits including Long Term Disability (90 day elimination period) and term life insurance 1.5 times salary.
BOLI coverage at the equivalent of three times salary upon employment. Also, there are other standard insurance benefits including Long Term Disability (90 day elimination period) and term life insurance 1.5 times salary.
Contractual Arrangements
Employment contract of 12 months payment unless dismissal for cause. Non-compete clause for duration of contract with radius of 50 miles of CSB — Upper Sandusky. In addition, there will be a Change in Control provision whereby your salary will be paid for 18 months upon a change in control of the Company.
Employment contract of 12 months payment unless dismissal for cause. Non-compete clause for duration of contract with radius of 50 miles of CSB — Upper Sandusky. In addition, there will be a Change in Control provision whereby your salary will be paid for 18 months upon a change in control of the Company.
401(k) Plan
After 30 days of employment you are eligible to participate in the Company 401(k) plan. The Company matches 50% of all contributions up to 6% of your salary.
After 30 days of employment you are eligible to participate in the Company 401(k) plan. The Company matches 50% of all contributions up to 6% of your salary.
Club Membership
Health and/or Country Club membership paid for the entire family.
Health and/or Country Club membership paid for the entire family.
Car Allowance
$700.00 per month.
$700.00 per month.
Cell Phone
Provided by the Company.
Provided by the Company.
Relocation Costs
8.
All-inclusive relocation costs including realtor fees, any temporary housing, storage, OOP closing
fees and moving fees.
Sign-on Bonus
Sign-on bonus of $10,000.00 for company stock purchase, if desired, in lieu of initial stock options. You will be asked to assist the Board Compensation Committee to develop a comprehensive stock option plan for executive management that is incentive based in the year 2005.
Sign-on bonus of $10,000.00 for company stock purchase, if desired, in lieu of initial stock options. You will be asked to assist the Board Compensation Committee to develop a comprehensive stock option plan for executive management that is incentive based in the year 2005.
Bonus Plan
Traditional plan has been to pay an aggregate of 5% of earnings in excess of ROAA of .5%. Of the aggregate pool your share would be 20%. A budget-based plan is being developed for 2005 whereby you would be eligible to receive up to 12.5% of salary if the Company budget is met. Some payment is to be made once 85% of the budget is met but the amount has yet to be determined. Also, for each $100,000.00 increment of earnings in excess of the budget the executive officers will be eligible for 20% of said amount and of this pool your share would be a minimum of 13%. You will be asked to provide assistance to the Compensation Committee for the finalization of the bonus plan for 2005.
Traditional plan has been to pay an aggregate of 5% of earnings in excess of ROAA of .5%. Of the aggregate pool your share would be 20%. A budget-based plan is being developed for 2005 whereby you would be eligible to receive up to 12.5% of salary if the Company budget is met. Some payment is to be made once 85% of the budget is met but the amount has yet to be determined. Also, for each $100,000.00 increment of earnings in excess of the budget the executive officers will be eligible for 20% of said amount and of this pool your share would be a minimum of 13%. You will be asked to provide assistance to the Compensation Committee for the finalization of the bonus plan for 2005.
Vacation
Four weeks upon commencing employment.
Four weeks upon commencing employment.
We will ask you to sign an Agreement of Intent, once completed, which basically confirms your
intent to begin your employment with CSB upon the completion of your position with your current
employer. This, along with the other contracts mentioned in this letter will be forwarded to you
immediately upon completion.
Should you have any questions, Xxxxx, please contact me.
Respectfully,
Xxxxxx X. Xxxxxx
President & CEO
President & CEO
ACCEPTED:____________________ DATE:________________
9.
