CHANGE IN CONTROL
TERMINATION AGREEMENT
Agreement made this 20th day of May, 1996, by and between
CHIPPEWA VALLEY BANK, an Ohio banking corporation, and
CHIPPEWA VALLEY BANCSHARES, INC., hereinafter collectively
referred to as "Bank" and XXXXXX X. XXXXX, hereinafter referred
to as "Executive".
WITNESSETH:
The Executive serves as the President and Chief Executive
Officer of the Bank and is the key corporate officer of the Bank.
The Board of Directors of the Bank has determined that the
interests of Chippewa Valley Bancshares, Inc. shareholders will be
best served by assuring that its key corporate officer will adhere to
the policy of the Board of Directors with respect to any event by
which another entity would acquire effective control of the bank,
including but not limited to a tender offer.
The Board of Directors ahs also determined that it is in the
Best interest of the shareholders to promote stability for a key
officer.
IN CONSIDERATION OF THE FOREGOING, the mutual
Covenants hereinafter contained and other good and valuable
consideration, receipt of which is hereby acknowledged, the Bank
and Executive agree as follows:
A. Duties of Executive. Executive shall support the position of
The Board of Directors and shall take any action reasonably
Requested by the Board of Directors with respect to any
Event by which another entity would acquire effective control
of the Bank, including but not limited to a tender offer.
B. Change in Control. The term "Change in Control" shall
mean a change in control of a nature that would be required
to be reported by persons or entities subject to the reporting
requirements of Section 14(a) of the Securities Exchange Act
of 1934 in response to item 5(f) of Schedule 14A of
Regulation 14(A) as in effect on the date hereof, or
successor provisions thereto, provided that, without
limitation, such a change in control shall be deemed to have
occurred if (a) any unaffiliated "person", "entity" and "group"
(as defined in Rule 13 (d) -3 issued under the Securities
Exchange Act of 1934) directly or indirectly becomes the
owner of securities of the Bank representing 30% or more of
the combined voting power of the Bank then outstanding
securities or (b) at any time during any period of two
consecutive calendar years individuals, who at the
beginning of such period constitute the Board of Directors
of the Bank, cease for any reason to constitute at least the
majority of such Board unless the election, or the
nomination for election, by the Bank's shareholders of each
new director was approved by a vote of at least two-thirds of
the directors still in office who were directors of the Bank at
the beginning of such two-year period.
C. Bank's Right to Terminate. The Executive shall serve the
Bank at the pleasure of the Bank's Board until such change
In control of the Bank occurs.
D. Termination Following Change in Control. In the event of
termination of employment subsequent to a Change in
Control and prior to the expiration of the term of this
Agreement, the Executive shall be entitled to the benefits
provided in Paragraph F unless such termination is (a)
because of the Executive's Death, Retirement or Disability,
(b) by the Bank for Cause, or (c) by the Executive other than
for Good Reason.
1) Disability or Retirement. Termination of employment
by the Bank based on "Disability" shall mean
termination because of Total and Permanent Disability
as defined in the Long-Term Disability Plan of the
Bank, in effect from time to time, in which the
Executive is participating. Termination of employment
based on "Retirement" shall mean termination of
employment by the Executive in accordance with the
retirement policy (including early retirement policy)
which is in effect from time to time and is generally
applicable to the Bank'[ salaried employees.
2) Cause. The term "Cause" shall mean termination
upon one or more of the following acts of the
Executive:
a) Felonious criminal activity whether or not
affecting the Bank
b) Disclosure to unauthorized persons of Bank
information which is believed by the Board of
Directors of the Bank to be confidential'
c) Breach of any contract with, or violation of any
legal obligation to, the Bank or dishonesty; or
d) Gross negligence or insubordination in the
performance of duties of the position held by
the Executive.
3) Good Reason. The term "Good Reason" shall mean
Voluntary termination of employment by the Executive
based on any of the following:
a) Involuntary reduction in the Executive's monthly or
bi-weekly based salary, which ever is applicable,
as in effect immediately prior to a Change in
Control unless such reduction occurs
simultaneously with a Bank-wide reduction in
officers' salaries;
b) Involuntary relocation to another office located
more than 50 miles from Executive's office location
at the time the Change in Control occurs;
c) Significant reduction in the Executive
responsibilities and status within the Bank's
organization or change in the Executive's title or
office without prior written consent of the Executive.
d) Involuntary discontinuance of the Executive's
Participation in any benefit plans maintained by the
Bank unless such plans are discontinued by
Reason of law or loss of tax deductibility to the
Bank with respect to contributions to such plans,
or are discontinued as a matter of the Bank's
policy applied equally to all participants in such
plans;
e) Involuntary reduction of the Executive's paid
vacation to less than fifteen (15) working days
per calendar years;
f) Failure to obtain an assumption of the Bank's
obligations under this Agreement by any
successor to the Bank, regardless of whether such
entity becomes a successor to the Bank as a result
of a merger, consolidation, sale of the assets of
the Bank, or other form of reorganization; or
Termination of employment which is not effected
pursuant to a Notice of Termination satisfying the
requirements of Paragraph E herein.
E. Notice of Termination. Any purported termination of the
Executive's employment by the Bank or by the Executive
shall be communicated by written Notice of Termination to
the other party. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon,
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provisions so
indicated and shall specify a "Date of Termination."
F. Compensation and Benefits Upon Termination.
1) If, after a Change in Control has occurred and prior
to the expiration of the term of this Agreement, the
Executive's employment by the Bank shall be
terminated: (1) by the Bank other than for Cause,
Disability, Retirement or death or (2) by the Executive
for Good Reason, then the Executive shall be
entitled to the compensation and benefits provided
in Subparagraph (3) below.
2) If either of the conditions in Subparagraph (1) above
are satisfied, the compensation and benefits
described in Subparagraph (3) below shall continue
to be paid or provided until the first to occur of: (a) the
expiration of a period of thirty-six (36) months after the
Date of Termination of the Executive's employment
by the Bank or (b) the date as of which the Executive
obtains comparable employment with another
employer. In no event, however,shall such
compensation and benefits continue beyond age
sixty-five (65) or the Executive's death, whichever first
occurs. For purposes of this Subparagraph (2), the
Executive shall be deemed to have obtained
comparable employment" if the annual compensation
payable to the Executive with respect to his new
position is substantially equivalent to the annual base
salary being paid to the Executive by the Bank
at the time that his employment is terminated. Also,
for purposes of this Agreement, the term "Month"
shall mean a period of thirty (30) days.
3) The compensation and benefits payable to Executive
pursuant to this Paragraph F shall be as follows:
Base Salary. The Bank shall pay to the Executive
a) His monthly or bi-weekly base salary, whichever is
applicable, at the rate in effect at the time Notice
of Termination is given or immediately preceding
a Change in Control, whichever is higher. Such
payments shall be made periodically according to
the same schedule as such salary payments
are made to the Bank's salaried employees.
b) Medical and Life Insurance. The Bank shall
provide medical, life and accidental death and
dismemberment insurance (including conversion
rights), with coverage and limits identical to those
in effect with respect to the Executive immediately
prior to the Change in Control. For the sole
purpose of determining the Executive's eligibility to
participate in the bank's medical, life and
accidental death and dismemberment insurance
plans, the Executive shall be considered to be on
a paid leave of absence as long as he is receiving
compensation or benefits under this Agreement.
G. Overall Limitation on Benefits. Notwithstanding any
provision in this Agreement to the contrary, if the
compensation and benefits provided to the Executive
pursuant to or under this Agreement, either alone or with
other compensation and benefits received by the Executive,
would constitute "parachute payments" within the meaning
of Section 280G of the Internal Revenue Code (the "Code"),
or the regulations adopted or proposed thereunder, then the
compensation and benefits payable pursuant to or under
this Agreement shall be reduced to the extentnecessary so
that no portion thereof shall be subject to the excise
tax imposed by Section 4999 of the Code. The Executive or
any other party entitled to receive the compensation or
benefits thereunder may request a determination as to
whether the compensation or benefit would constitute a
parachute payment and, if requested, such determination
shall be made by independent tax counsel selected by the
Bank and approved by the party requesting such
determination. In the event that any reduction is required
under this Paragraph G, the Bank shall consult with the
Executive in determining the order in which compensation
and benefits shall be reduced.
H. Legal Fees. The Bank shall pay all legal fees and expenses
incurred by the Executive in enforcing any right or benefit
provided by this Agreement.
I. Term of Agreement. This Agreement shall continue in effect
Until the earliest to occur of the following:
1) the last day of the thirty-sixth (36) month, as defined
in Paragraph F, after a Change in Control occurs; or
2) the date as of which the Bank terminates the
Executive's employment, unless such termination of
employment occurs after a Change in Control and is
for other than Cause, Disability, Retirement or Death;
3) or the date as of which the Executive voluntarily
terminates his employment withthe Ban, unless such
termination of employment occursafter a Change in
Control and is for Good Reason.
In the event that the Executive becomes entitled to the
compensation or benefits provided in Paragraph F of this
Agreement before an event of termination occurs as provided in
This Paragraph I, such compensation and benefits shall continue
for the period provided in Paragraph F notwithstanding the
occurrence of such termination.
J. Notice. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given
when delivered or mailed by certified or registered mail,
return receipt requested, postage prepaid, provided that all
notices to the Bank shall be directed to the attention of the
Board of Directors of the Bank and a copy to the Secretary
of the Bank, or to such other address as either party may
have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective
only upon receipt.
K. Miscellaneous. No provisions of this Agreement may be
modified, waived, or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive and such officer as may be specifically
designated by the Board of Directors of the Bank. No
waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar
provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not
expressly set forth in this Agreement; provided,
however, that this Agreement shall not supersede or in any
way limit the rights, duties or obligations Executive may
have under any other written agreement with the Bank. The
validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
Ohio.
L. Validity. The validity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, which shall remain
in full force and effect.
M. Counterparts.
This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original by all of which together will constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed
This Agreement on the date above first written.
Signed in the presence of:
______________ CHIPPEWA VALLEY BANK AND
CHIPPEWA VALLEY BANCSHARES, INC.
_________By: /s/_Carl H. Bradford_______________
(Xxxx X. Xxxxxxxx, Xx.) Secretary
_________BANK
___________/s/__Philip S. Swope________________
EXECUTIVE
