NONCOMPETITION AGREEMENT
Exhibit
10.7
NONCOMPETITION
AGREEMENT
This
NONCOMPETITION AGREEMENT (this “Agreement”) is entered into as
of the ____ day of ____________, 2011 (the “Effective Date”), by and
between Consumers Bancorp, Inc., an Ohio corporation (the “Company”), Consumers National
Bank, an Ohio Banking Corporation (the “Bank”),
and _________________ (the “Executive”).
WHEREAS, Executive has
provided guidance, leadership, and direction in the growth, management, and
development of the Company, the Bank, and the Affiliates, and has learned trade
secrets, confidential procedures, and information, and technical and sensitive
plans of Consumers.
WHEREAS, the Company desires
to restrict, after the Executive’s Termination of Employment with the Company
and the Bank, the Executive’s availability to other employers or entities that
compete with Consumers;
NOW, THEREFORE, in
consideration of these premises, the mutual promises and undertakings set forth
in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Executive, the Company and the
Bank hereby agree as follows.
1. Administration
of this Agreement.
(a) Administrator
Duties. This Agreement shall be administered by the
Compensation Committee of the Board or by such committee or person as the Board
shall appoint (the “Administrator”). The
Executive may not be a member of the Administrator. The Administrator
shall have the discretion and authority to (x) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of this
Agreement and (y) decide or resolve any and all questions that may arise,
including interpretations of this Agreement.
(b) Agents. In
the administration of this Agreement the Administrator may employ agents and
delegate to them such administrative duties as it sees fit (including acting
through a duly appointed representative) and may from time to time consult with
counsel, who may be counsel to the Company.
(c) Binding
Effect of Decisions. The decision or action of the
Administrator concerning any question arising out of the administration,
interpretation, and application of this Agreement and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in this Agreement.
(d) Indemnity
of Administrator. The Company shall indemnify and hold
harmless the members of the Administrator against any and all claims, losses,
damages, expenses, or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by the
Administrator or any of its members. No individual shall be liable
while acting as Administrator for any action or determination made in good faith
regarding this Agreement, and any such individual shall be entitled to
indemnification and reimbursement in the manner provided in the Company’s
charter and bylaws/regulations and under applicable law.
(e) Information. To
enable the Administrator to perform its functions, the Company and the Bank
shall supply full and timely information to the Administrator on all matters
relating to the date and circumstances of the Termination of Employment of the
Executive and such other pertinent information as the Administrator may
reasonably require.
(f) Action by
the Administrator. In addition to acting at a meeting in
accordance with applicable laws, any action of the Administrator concerning this
Agreement may be taken by a written instrument signed by the Administrator
(including, if the Board or a Board committee serves as the Administrator, by
written consent in accordance with Ohio law and the charter and
bylaws/regulations of the Company, and any such action so taken by written
consent shall be effective as if it had been taken by a majority of the members
at a meeting duly called and held).
2. Definitions
(a) Affiliate
shall mean the Bank and any other entity that directly, or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with the Company.
(b) Board
shall mean the Board of Directors of the Company.
(c) Cause
shall mean (i) fraud; (ii) embezzlement; (iii) conviction of or plea of nolo
contendere by the Executive of any felony; (iv) a material breach of, or the
willful failure or refusal by the Executive to perform and discharge the
Executive’s duties, responsibilities and obligations under this Agreement; (v)
any act of moral turpitude or willful misconduct by the Executive intended to
result in personal enrichment of the Executive at the expense of Consumers or
any of its affiliates or which has a material adverse impact on the business or
reputation of Consumers (such determination to be made by the Board in its
reasonable judgment); (vi) intentional material damage to the property or
business of Consumers; (vii) gross negligence; or (viii) the ineligibility of
the Executive to perform the Executive’s duties because of a ruling, directive
or other action by any agency of the United States or any state of the United
States having regulatory authority over Consumers; but in each case only if (a)
the Executive has been provided with written notice of any assertion that there
is a basis for termination for Cause, which notice shall specify in reasonable
detail specific facts regarding any such assertion, (b) such written notice is
provided to the Executive in a reasonable time (and in any event no less than
three (3) business days) before the Board meets to consider any possible
termination for Cause, (c) at or prior to the meeting of the Board to consider
the matters described in the written notice, an opportunity is provided to the
Executive and his counsel to be heard before the Board with respect to the
matters described in the written notice, (d) any resolution or other Board
action held with respect to any deliberation regarding or decision to terminate
the Executive for Cause is duly adopted by a vote of at least two-thirds of the
entire Board (excluding the Executive) at a meeting of the Board duly called and
held, and (e) the Executive is promptly provided with a copy of the resolution
or other corporate action taken with respect to such termination. No
act or failure to act by the Executive shall be considered willful unless done
or omitted to be done by him not in good faith and without reasonable belief
that his action or omission was in the best interests of
Consumers. The unwillingness of the Executive to accept any or all of
a material change in the nature or scope of his position, authorities, or
duties; a reduction in his total compensation or benefits; a relocation that he
deems unreasonable in light of the Executive’s personal circumstances; or other
action by or request of Consumers in respect of the Executive’s position,
authority, or responsibility that he reasonably deems to be contrary to this
Agreement, may not be considered by the Board to be a failure to perform or
misconduct by the Executive.
(d) Change in
Control shall mean the transfer of shares of the Company’s voting common
stock such that one entity or one person acquires (or is deemed to acquire when
applying Section 318 of the Code) more than fifty percent (50%) of the Company’s
outstanding voting common stock.
(e) Code
shall mean the Internal Revenue Code of 1986, as amended, or any successor
statute, rule or regulation of similar effect.
(f) Confidential
Information shall mean all business and other information relating to the
business of Consumers, including without limitation, technical or nontechnical
data, programs, methods, techniques, processes, financial data, financial plans,
product plans, and lists of actual or potential customers, which (i) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other Persons, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy or confidentiality. Such information and compilations of information
shall be contractually subject to protection under this Agreement whether or not
such information constitutes a trade secret and is separately protectable at law
or in equity as a trade secret.
(g) Consumers
shall mean the Company, the Bank, and any Affiliate.
(h) Customer
shall mean any individual, joint venturer, entity of any sort, or other business
partner of Consumers with, for, or to whom Consumers has provided Financial
Products or Services during the final two years of the Executive’s employment
with Consumers, or any individual, joint venturer, entity of any sort, or
business partner whom Consumers has identified as a prospective customer of
Financial Products or Services within the final year of the Executive’s
employment with Consumers.
(i) Disability
or Disabled shall mean, if the Executive is covered by a
Consumers-sponsored disability policy, total disability as defined in such
policy without regard to any waiting period. If the Executive is not
covered by such a policy, Disability shall mean the Executive’s suffering a
sickness, accident, or injury which, in the judgment of a physician satisfactory
to Consumers, prevents the Executive from performing substantially all of the
Executive’s normal duties for Consumers. As a condition to receiving
any Disability benefits, the Company may require the Executive to submit to such
physical or mental evaluations and tests as the Board deems
appropriate.
(j) Financial
Products or Services shall mean any product or service that a financial
institution or a financial holding company could offer by engaging in any
activity that is financial in nature or incidental to such a financial activity
under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered
by Consumers on the date of the Executive’s employment termination, including
but not limited to banking activities and activities that are closely related
and a proper incident to banking, or other products or services of the type in
which the Executive was involved during the Executive’s employment with
Consumers.
(k) Good
Reason shall mean without the Executive’s written consent, (i) a material
diminution in authority, duties or responsibilities; (ii) any reduction by
Consumers in the Executive’s Base Salary; (iii) any failure of Company to obtain
the assumption of, or the agreement to perform, this Agreement by any successor
as contemplated in Section 12 hereof; (iv) Consumers materially breaches this
Agreement; or (v) Consumers requiring the Executive to be permanently assigned
to a location other than the current or future headquarters of the Company,
except for required travel on Consumers’ business to an extent substantially
consistent with the Executive’s present business travel obligations and as
described under Section 3; or, in the event the Executive consents to any
relocation, and such relocation is more than fifty (50) miles from the
Executive’s previous location, the failure by Consumers to pay (or
reimburse the Executive) for all reasonable moving expenses incurred by the
Executive relating to a change of the Executive’s principal residence in
connection with such relocation and to indemnify the Executive against any loss
realized on the sale of the Executive’s principal residence in connection with
any such change of residence. Good Reason shall be deemed to occur
only when the Executive provides notice to the Company and the Bank of the
Executive’s judgment that a Good Reason event has occurred within ninety (90)
days of such occurrence, and the Company and the Bank will have at least thirty
(30) days during which it may remedy the condition.
(l) Person
shall mean any individual, corporation, limited liability company, bank,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or other entity.
(m) Retirement
shall mean Executive’s Voluntary Termination of Employment on or after
attainment of age sixty-five (65).
(n) Section
409A shall mean Section 409A of the Code and the regulations and other
guidance issued thereunder by the United States Department of Treasury and
Internal Revenue Service.
(o) Specified
Employee shall mean an employee who at the time of Termination of
Employment is a key employee of Consumers, if any stock of Consumers is publicly
traded on an established securities market or otherwise. For purposes
of this Agreement, an employee is a key employee if the employee meets the
requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in
accordance with the regulations thereunder and disregarding section 416(i)(5))
at any time during the twelve- (12-) month period ending on December 31 (the
“identification
period”). If the employee is a key employee during an
identification period, the employee is treated as a key employee for purposes of
this Agreement during the twelve- (12-) month period that begins on the first
day of January following the close of the identification period.
(p) Termination
of Employment shall mean that the Executive shall have ceased to be
employed by Consumers for reasons other than death, excepting a leave of absence
approved by Consumers. Whether a termination of employment has
occurred is determined based on whether the facts and circumstances indicate
that Consumers and the Executive reasonably anticipated that no further services
would be performed after a certain date or that the level of bona fide services
the Executive would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than twenty
percent (20%) of the average level of bona fide services performed (whether as
an employee or an independent contractor) over the immediately preceding
thirty-six (36) month period (or the full period of services to Consumers if the
Executive has been providing services to Consumers less than thirty-six (36)
months). Termination of Employment shall be construed consistently
with a “separation from service” within the meaning of Section
409A.
(q) Voluntary
Termination of Employment shall mean the Termination of Employment by the
Executive of the Executive’s employment with Consumers, which is not the result
of Good Reason.
3. Term.
(a) The term of
this Agreement shall commence upon the Effective Date and will continue for an
initial term of one (1) year. Commencing on the Effective Date, as
each day lapses during such initial term, one (1) additional day shall be
automatically added to the term so that the term of the Agreement after each
one- (1-) day renewal shall always be one (1) year, unless terminated as
provided in Section 3(b).
(b) This Agreement
may be terminated effective on or after the one- (1-) year anniversary of the
Effective Date upon at least one (1) year’s advance written notice of
termination by either party to the other party.
4. Covenants against
Competition, Solicitation, or Disclosure of Confidential
Information.
(a) Competition. For and in
consideration of the payments described in Section 5, the Executive shall not,
without the prior written consent of the Administrator, either separately,
jointly, or in association with others, directly or indirectly, as an agent,
employee , owner, partner, member, or stockholder or otherwise, compete with
Consumers or establish, engage in, or become interested in, any business, trade,
or occupation that competes with Consumers in the Financial Products or Services
industry through association with a financial institution that operates a
corporate headquarters within 50 (fifty) miles of a physical branch or loan
office location of Consumers existent during the Executive’s employment with
Consumers or is existent on the date of the Executive’s Termination
of Employment. The Executive acknowledges and agrees that during the
terms of the Executive’s employment the Executive has acquired special and
confidential knowledge regarding the operations of
Consumers. Furthermore, although not a term or condition of this
Agreement, the Company, the Bank, and the Executive acknowledge and agree that
the Executive services have been used and are being used by Consumers in
executive, managerial and supervisory capacities throughout the areas in which
Consumers does business . The Executive acknowledges and agrees that
the noncompete restrictions contained herein are reasonable and fair in scope
and necessary to protect the legitimate interests of
Consumers. Notwithstanding anything contained in the Section 4(a) to
the contrary, nothing contained herein shall be construed to prohibit the
Executive from owning equity in other businesses that are competitive with
Consumers; provided that, while employed by Consumers, such ownership in any
competitive business does not exceed the value of the Executives equity
ownership in Consumers without the prior written consent of the Administrator
and does not meet or exceed five percent (5%) of the issued and
outstanding equity of such competitive business.
(b) Solicitation. For
and in consideration of the monthly payments described in Section 5, the
Executive shall not (x) directly or indirectly solicit or attempt to solicit any
Customer of Consumers to accept or purchase Financial Products or Services of
the same nature, kind, or variety currently being provided to the Customer by
Consumers or being provided to the Customer by Consumers when the Executive’s
Termination of Employment occurs, (y) directly or indirectly influence or
attempt to influence any Customer, joint venturer, or other business partner of
Consumers to alter that person or entity’s business relationship with Consumers
in any way, and (z) accept the Financial Products or Services business of any
Customer or provide Financial Products or Services to any Customer on behalf of
anyone other than Consumers. In addition, the Executive shall not
solicit or attempt to solicit and shall not encourage or induce in any way any
employee, joint venturer, or business partner of Consumers to terminate an
employment or contractual relationship with Consumers, and shall not hire any
person employed by Consumers during the two- (2-) year period immediately before
the Executive’s Termination of Employment or any person employed by Consumers
during the term of this covenant pursuant to this Section 4(b).
(c) Disclosure
of Confidential Information. For and in consideration of the
monthly payments described in Section 5, the Executive shall not reveal to any
person, firm, or corporation any Confidential Information of any nature
concerning Consumers or the business of Consumers. The covenant in
this Section 4(c) does not prohibit disclosure required by an order of a court
having jurisdiction, a subpoena from an appropriate governmental agency, or
disclosure made by the Executive in the ordinary course of business and within
the scope of the Executive’s authority.
(d) Duration;
No Impact on Existing Obligations under Law or Contract. The
covenants in this Section 4 shall apply during the Executive’s employment with
Consumers and throughout the twelve (12) month period immediately following the
Executive’s Termination of Employment, whether or not Consumers has engaged the
services of the Executive pursuant to an agreement to provide consulting
services upon the Executive’s Termination of Employment with Consumers;
provided, however, that such twelve (12) month period shall automatically be
reduced to six (6) months upon the occurrence of a Change in
Control. The twelve (12) (or, if applicable, six (6)) month
durational period referenced herein shall be tolled and shall not run during any
such time that the Executive is in breach of this Agreement and/or in violation
of any of the covenants contained herein, and once tolled hereunder shall not
begin to run again until such time as all such breach and/or violations have
ceased. The Executive acknowledges and agrees that nothing in this
Agreement is intended to or shall have any impact on the Executive’s obligations
as an officer or employee of Consumers to refrain from competing against,
soliciting Customers, officers, or employees of, or disclosing Confidential
Information of Consumers while the Executive is serving as an officer or
employee of Consumers or thereafter, whether the Executive’s obligations arise
under applicable law or under an employment agreement or otherwise.
(e) Remedies. The
Executive acknowledges and agrees that remedies at law for the Executive’s
breach of the covenants contained herein are inadequate and that for violation
of the covenants contained herein, in addition to any and all legal and
equitable remedies that may be available, the covenants may be enforced by an
injunction in a suit in equity without the necessity of proving actual damage,
and that a temporary injunction may be granted immediately upon the commencement
of any such suit, and without notice. The parties hereto intend that
the covenants contained in this Section 4 shall be deemed to be a series of
separate covenants, one for each county of each state in which Consumers does
business. If in any judicial proceeding a court refuses to enforce
any or all of the separate covenants, the unenforceable covenants shall be
deemed eliminated from the provisions hereof for the purposes of that proceeding
to the extent necessary to permit the remaining separate covenants to be
enforced. Furthermore, if in any judicial proceeding a court refuses
to enforce any covenant because of the covenant’s duration or geographic scope,
the covenant shall be construed to have only the maximum duration or geographic
scope permitted by law.
(f) Forfeiture
of Payments Under This Agreement. If the Executive breaches
any of the covenants in this Section 4, the Executive’s right to any of the
payments specified in Section 5 after the date of the breach shall be forever
forfeited and the right of the Executive’s designated beneficiary or estate to
any payments under this Agreement shall likewise be forever
forfeited. This forfeiture is in addition to and not instead of any
injunctive or other relief that may be available to the Company and the
Bank. The Executive further acknowledges and agrees that any breach
of any of the covenants in this Section 4 shall be deemed a material breach by
the Executive of this Agreement.
5. Noncompete
Payments.
(a) Payments. In
consideration of the Executive’s covenants as described in Section 4
hereto:
(i) Upon
the Executive’s Termination of Employment by the Company or the Bank for Cause
or upon a Voluntary Termination of Employment by the Executive, except for a
Termination for Good Reason or Retirement, the Company shall pay to the
Executive a monthly payment, in an amount equal to one hundred United States
dollars (US$100), for a period of twelve (12) consecutive months, beginning the
first day of the month following the Executive’s Termination of Employment;
or
(ii) Upon
the a Termination of Employment without Cause by the Company; or a Termination
of Employment for Good Reason by the Executive; the Company shall pay to the
Executive an amount equal to the aggregate of one (1) times the Executive’s
annual rate of base salary, excluding any bonus or incentive payment, then being
paid to the Executive. The aggregate amount payable identified in
this Section 5(a)(ii) shall be paid in twelve (12) equal consecutive monthly
payments beginning on the first day of the month following the Executive’s
Termination of Employment.
(b) Potential
Six-Month Delay under Section 409A. If, when Termination of
Employment occurs, the Executive is a Specified Employee and if the
noncompetition payments under this Section 5 would be considered deferred
compensation under Section 409A, and finally if an exemption from the six- (6-)
month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not
available, the Executive’s noncompetition payments for the first six (6) months
following the Executive’s Termination of Employment shall be paid to the
Executive in a single lump sum on the first day of the seventh month after the
month in which the Executive’s Termination of Employment occurs. The
remaining payments shall be paid in accordance with the original payment
schedule.
(c) Death and
Disability. Notwithstanding anything herein to the contrary,
no amounts shall be payable under this Agreement in the event of the Executive’s
Termination of Employment as a result of death or Disability except as provided
in Section 6(b). Further, all payments under this Agreement shall
cease upon Executive’s death, except as provided in Section 6(b).
6. Payment After a Change in
Control.
(a) Termination
of Employment After a Change in Control. If the
Executive’s Termination of Employment occurs within twelve (12) consecutive
months after a Change in Control is consummated and if the Executive would
otherwise be entitled to receive payments under Section 5(a)(i) or 5(a)(ii), the
Executive shall be entitled to receive in a single lump sum, within five (5)
days after the date of the Termination of Employment (provided that if such
five- (5-) day period begins in one calendar year and ends in another, the
Executive shall not have a right to designate the calendar year of payment), the
aggregate payment due under Section 5, without present value discount for the
time value of money; provided that Section 5(b) shall apply, if
applicable. The obligations of the Executive under Section 4 shall
continue for a period of six (6) consecutive months following the date of
Termination of Employment.
(b) Death
Subsequent to a Change in Control. Notwithstanding anything
herein to the contrary, in the event of the Executive’s death subsequent to a
Termination of Employment after a Change in Control and prior to payment of the
amount specified in Section 6(a), all amounts due and unpaid shall be paid to
the Executive’s designated beneficiary in a single lump sum within thirty (30)
days of the date of death; provided that if such thirty- (30-) day period begins
in one calendar year and ends in another, such beneficiary shall have no right
to designate the calendar year of payment.
7. Claims
Procedure. The Executive, or a designated beneficiary of the
Executive, who has not received benefits under this Agreement that he or she
believes should be paid shall make a claim for such benefits by submitting to
the Administrator a written claim for the benefits. The claim must
state with particularity the determination desired by the
claimant. All determinations and decisions made by the Administrator
regarding claims for benefits under this Agreement will be final, conclusive,
and binding on all persons, including Consumers, the Executive, and the
Executive’s estate and designated beneficiary(ies).
8. Assignment
of Rights; Spendthrift Clause. None of the Executive, the
Executive’s estate, or the Executive’s beneficiary shall have any right to sell,
assign, transfer, pledge, attach, encumber, or otherwise convey the right to
receive any payment hereunder. To the extent permitted by law,
benefits payable under this Agreement shall not be subject to the claim of any
creditor of the Executive, the Executive’s estate, or the Executive’s designated
beneficiary(ies) or subject to any legal process by any creditor of the
Executive, the Executive’s estate, or the Executive’s designated
beneficiary(ies).
9. Suicide. If
the Executive commits suicide within two (2) years after the Effective Date, all
payments provided for herein shall be forfeited.
10. Binding
Effect. This Agreement shall bind the Executive, the Company,
the Bank and their beneficiaries, survivors, executors, successors and assigns,
administrators, and transferees.
11. Successors;
Binding Agreement. By an assumption agreement in form and
substance satisfactory to the Executive, the Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform this Agreement had
no succession occurred.
12. Amendment
of Agreement. This Agreement may not be altered or amended
except by a written agreement signed by the Company, the Bank, and the
Executive. However, if the Company determines to its reasonable
satisfaction that an alteration or amendment of this Agreement is necessary or
advisable so that the Agreement complies with the Code or any other applicable
tax law, then upon written notice to Executive, the Company and the Bank may
unilaterally amend this Agreement in such manner and to such an extent as the
Company and the Bank reasonably considers necessary or advisable to ensure
compliance with the Code or other applicable tax law. Nothing in this
Section 12 shall be deemed to limit the Company’s and the Bank’s right to
terminate this Agreement without stated cause pursuant to Section
3(b).
13. Interpretation. Caption
headings and subheadings herein are included solely for convenience of reference
and shall not affect the meaning or interpretation of any provision of this
Agreement. Words used in the singular in this Agreement shall include
the plural, and words used in the masculine shall include the
feminine.
14. Severability. If
any provision of this Agreement is held invalid, such invalidity shall not
affect any other provision of this Agreement not held invalid, and each such
other provision shall continue in full force and effect to the full extent
consistent with law. If any provision of this Agreement is held
invalid in part, such invalidity shall not affect the remainder of the provision
not held invalid, and the remainder of such provision together with all other
provisions of this Agreement shall continue in full force and effect to the full
extent consistent with law.
15. Governing
Law, Venue, and Waiver of Right to Jury Trial. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Ohio, without regard to its conflict of laws provisions, except to
the extent preempted by the laws of the United States of America. The
Executive, the Company and the Bank agree that the exclusive venue for
resolution of any disputes regarding or arising out of this Agreement or the
Executive’s employment shall be the state and federal courts located in Xxxxx
County, Ohio, or the federal courts located in the jurisdiction of the county
wherever the corporate headquarters of the Company may be located in the
future. The Executive, the Company and the Bank further agree to
waive any right to a jury trial with respect to any disputes regarding or
arising out of this Agreement or the Executive’s employment with
Consumers. The Executive, the Company and the Bank each acknowledge
and agree that this selection of venue and waiver of the right to a jury trial
is knowingly, freely, and voluntarily given, is made after opportunity to
consult with counsel of their choosing about this Agreement and its provisions,
and is in the best interests of each party hereto.
16. Entire
Agreement. This Agreement constitutes the entire
agreement between Executive, the Company, and the Bank concerning the subject
matter. No rights are granted to the Executive under this Agreement other than
those specifically set forth.
17. 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 Consumers nor does it interfere with Consumer’s right to
discharge the Executive. It also does not require the Executive to
remain an employee or interfere with the Executive’s right to terminate
employment at any time.
18. Tax
Withholding. If taxes are required by the Code or other
applicable tax law to be withheld by the Company and the Bank from payments
under this Agreement, the Company shall withhold any taxes that are, it its sole
opinion, required to be withheld.
19. Notices. All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid, to the following addresses or to such other address as either party may
designate by like notice. If to the Company and/or the Bank, notice
shall be given to the Board or to such other or additional person or persons as
the Company shall have designated to the Executive in writing. If to
the Executive, notice shall be given to the Executive at the Executive’s address
appearing on the Company’s records, or to such other or additional person or
persons as the Executive shall have designated to the Company and the Bank in
writing.
20. Compliance
with Section 409A. To the extent applicable, the Company, the
Bank, and the Executive intend that this Agreement shall comply with Section
409A and that the Agreement shall be construed in a manner to comply with
Section 409A.
21. Tax
Treatment. Notwithstanding any other provision of this
Agreement, the federal, state, and local income and/or other tax treatment of
payments and benefits under this Agreement shall not be, and is not, warranted
or guaranteed. Neither Consumers, its directors (including, without
limitation, the Board), officers, employees, agents, attorneys, nor any of their
designees shall be liable for any taxes, penalties, or other monetary amounts
owed by the Executive or any other person as a result of the Agreement, any
deferral or payment under the Agreement, or the administration of the
Agreement.
22. EESA
Limitations. Notwithstanding anything herein to the contrary,
the terms of this Agreement shall be construed subject to the limitations of the
Emergency Economic Stabilization Act of 2008 (“EESA”). It is
expressly understood that this Agreement will be enforced in a manner which is
consistent with Section 111 of EESA, as amended, and rules and regulations
currently issued and to be issued thereunder. Until such time that
the United States Treasury ceases to own any debt or equity or equity securities
of Consumers acquired pursuant to the Capital Purchase Program, Consumers and
Executive agree that all payments under this Agreement shall be limited to the
extent necessary to comply with Section 111 of EESA, as amended.
IN WITNESS WHEREOF, the
Executive and a duly authorized officer of the Company and of the Bank have
executed this Noncompetition Agreement as of the date first written
above.
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COMPANY
AND BANK:
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Consumers
Bancorp, Inc.
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By:
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Title:
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Date:
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Consumers
National Bank
|
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By:
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Title:
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Date:
|
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EXECUTIVE
|
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Date:
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