PEOPLES BANCORP INC. CHANGE IN CONTROL AGREEMENT
Exhibit
10.1
THIS
CHANGE IN CONTROL (the “Agreement”) is adopted this 4th day of September, 2007,
by and between PEOPLES BANCORP INC., a financial holding company, located in
Marietta, Ohio (the "Company"), and Xxxxxxx X. Xxxx (the "Executive"), an
Executive of the Company or any of its subsidiaries.
The
Board of
Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company to retain the Executive’s services and to reinforce and
encourage the continued attention and dedication of the Executive to his
assigned duties, without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company or the
assertion of claims and actions against Executives.
The
Company and the Executive agree as provided herein.
Article
1
Definitions
Whenever
used in this Agreement, the following words and phrases shall have the meanings
specified:
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1.1
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“Base
Annual Compensation" means the Executive’s average annualized
compensation paid by the Company which was includible in the Executive’s
gross income during the most recent five taxable years ending before
the
date of the Change of Control. The definition covers amounts
includible in compensation, prior to any deferred arrangements, and
defined as the individual’s “base amount” under Section 280G of the
Code.
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1.2
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“Cause”
means
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(a)
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Gross
negligence or gross neglect of duties;
or
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(b)
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Commission
of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Company;
or
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(c)
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Fraud,
disloyalty, dishonesty or willful violation of any law or significant
Company policy committed in connection with the Executive's employment;
or
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(d)
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Issuance
of an order for removal of the Executive by the Company’s banks
regulators.
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1.3
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“Change in Control” shall mean: |
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(a)
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Any
person or entity or group of affiliated persons or entities (other
than
the Company) becomes a beneficial owner, directly or indirectly,
of 25% or
more of the Company’s voting securities or all or substantially all of the
assets of the Company;
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(b)
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The
Company enters into a definitive agreement which contemplates the
merger,
consolidation or combination of the Company with an unaffiliated
entity in
which either or both of the following is to occur: (i) the
Board of Directors of the Company, as applicable, immediately prior
to
such merger, consolidation or combination will constitute less than
a
majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities
of the
surviving, new or combined entity will be beneficially owned by the
stock
holders of the Company immediately prior to such merger, consolidation
or
combination; provided, however, that if any definitive agreement
to merge,
consolidate or combine is terminated without consummation of the
transaction, then no Change in Control shall be deemed to have occurred
pursuant to this paragraph;
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(c)
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The
Company enters into a definitive agreement which contemplates the
transfer
of all or substantially all of the Company’s assets, other than to a
wholly-owned Subsidiary of the Company; provided, however, that if
any
definitive agreement to transfer assets is terminated without consummation
of the transfer, then no Change in Control shall be deemed to have
occurred pursuant to this paragraph;
or
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(d)
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A
majority of the members of the Board of Directors of the Company
shall be
persons who: (i) were not members of such Board on the date of this
Agreement (“current members”); and (ii) were not nominated by a vote of
such Board which included the affirmative vote of a majority of the
current members on such Board at the time of their nomination (“future
designees”) and (iii) were not nominated by a vote of such Board which
included the affirmative vote of a majority of the current members
and
future designees, taken as a group, on such Board at the time of
their
nomination.
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1.4
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“Code”
means the Internal Revenue Code of 1986, as
amended.
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1.5
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“Disability”
means
the
Executive’s suffering a sickness, accident or injury which has been
determined by the insurance carrier of any individual or group disability
insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally
and
permanently disabled. The Executive must submit proof to the
Plan Administrator of the insurance carrier’s or Social Security
Administration’s determination upon the request of the Plan
Administrator.
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1.6
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“Good
Reason” means, without the Executive’s express written consent, after
written notice to the Board, and after a thirty (30) day opportunity
for
the Board to cure, the continuing occurrence of any of the
following events:
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(a)The
assignment to the Executive of any material duties or responsibilities
inconsistent with the Executive’s positions, or a change in the
Executive’s reporting responsibilities, titles, or offices, or any removal
of the Executive from or any failure to re-elect the Executive to
any of
such positions, except in connection with the termination of the
Executive’s employment for Cause, Disability, retirement, or as a result
of the Executive’s death;
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(b)A
reduction by the Company in the Executive’s base
salary;
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(c)The
taking
of any action by the Company which would adversely affect the Executive’s
participation in or materially reduce the Executive’s benefits under any
benefit plans, or the failure by the Company to provide the Executive
with
the number of paid vacation days to which the Executive is then entitled
on the basis of years of service with the Company in accordance with
the
Company’s normal vacation policy in effect on the date
hereof;
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(d)Any
failure of the Company to obtain the assumption of, or the agreement
to
perform, this Agreement by any successor as contemplated in Section
3.9
hereof; or
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(e)The
Company directing the Executive to be reassigned to an office location
50
miles or more form the current office location of the Executive except
for
required travel on Company business to an extent substantially consistent
with the Executive’s present business travel obligations or, in the event
the Executive consents to any relocation, the failure by the Company
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.
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1.7
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“Termination
Date” shall mean the date on which the Executive’s employment with the
Company is terminated.
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Article
2
Change
in Control Benefits
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2.1
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Change
in Control Benefit. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company,
the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason,
then
in any such events, the Company shall pay to the Executive a benefit
under
this Article.
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2.1.1
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Amount
of Benefit. The benefit under this Section 2.1 is: two
(2) times the Executive’s Base Annual Compensation at the date of
the Change of Control.
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2.1.2
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Payment of Benefit. The Company shall pay the benefit to the Executive in a lump sum within thirty (30) days following the Termination Date. |
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2.1.3
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Insurance Benefits. During the period of time specified in Section 3.2 of this Agreement, the Executive shall receive, in addition to the benefit provided in Section 2.1.1 of this Agreement, life, medical and dental insurance substantially in the form and expense to the Executive as received by the Executive on the Termination Date. It is understood and agreed that any rights and privileges of the Executive provided by the Consolidated Omnibus Budget Reconciliation Act of 1986, amending the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Services Act, as amended, shall begin at the end of the period of time specified in Section 3.2 of this Agreement. |
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2.2
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Excess
Parachute Payment. Notwithstanding anything to the contrary
in this Agreement, if there are payments to the Executive which constitute
“parachute payments,” as defined in Section 280G of the Code, then the
payments made to the Executive shall be the greater of (x) one dollar
($1.00) less than the amount which would cause the payments to the
Executive (including payments to the Executive which are not included
in
this Agreement) to be subject to the excise tax imposed by Section
4999 of
the Code, and (y) any payments to the Executive contingent upon the
Company’s Change in Control (including payments to the Executive which are
not included in the Agreement) less any excise tax.
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Article
3
Miscellaneous
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3.1
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Confidential
Information. The
Executive recognizes and acknowledges that he will have access to
certain
information of the Company and that such information is confidential
and
constitutes valuable, special and unique property of the
Company. The Executive shall not at any time, either during or
subsequent to the term of this Agreement, disclose to others, use,
copy or
permit to be copied, except as directed by law or in pursuance of
the
Executive’s duties for or on behalf of the Company, its successors,
assigns or nominees, any Confidential Information of the Company
(regardless of whether developed by the Executive), without the prior
written consent of the Company. The
term “Confidential Information” with respect to any person means any
secret or confidential information or know-how and shall include,
but
shall not be limited to, the plans, customers, costs, prices, uses,
and
applications of products and services, results of investigations,
studies
owned or used by such person, and all products, processes, compositions,
computer programs, and servicing, marketing or operational methods
and
techniques at any time used, developed, investigated, made or sold
by such
person, before or during the term of this Agreement, that are not
readily
available to the public or that are maintained as confidential by
such
person. The Executive shall maintain in confidence any
Confidential Information of third parties received as a result of
the
Executive’s employment with the Company in accordance with the Company’s
obligations
to such third parties and the policies established by the
Company.
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3.2
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No
Competition. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company,
the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason,
then
and for a period of one (1) year immediately following the Termination
Date, the Executive shall not directly or indirectly engage in the
business of banking, or any other business in which the Company directly
or indirectly engages during the term of the Agreement; provided,
however,
that this restriction shall apply only to the geographic market of
the
Company as delineated on the Termination Date in the Community
Reinvestment Act Statement of Peoples Bank, National
Association. The Executive shall be deemed to engage in a
business if he directly or indirectly, engages or invests in, owns,
manages, operates, controls or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner
connected with, or renders services or advice to, any business engaged
in
banking, provided, however, that the Executive may invest in the
securities of any enterprise (but without otherwise participating
in the
activities of such enterprise) if two conditions are met: (a) such
securities are listed on any national or regional securities (exchange
or
have been registered under Section 12(g) of the Securities Exchange
Act of
1934) and (b) the Executive does not beneficially own (as defined
Rule 1
3d-3 promulgated under the Securities Exchange Act of 1934) in excess
of
1% of the outstanding capital stock of such
enterprise.
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3.3
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Delivery
of Documents Upon Termination. The Executive shall deliver
to the Company or its designee at the termination of the Executive’s
employment all correspondence, memoranda, notes, records, drawings,
sketches, plans, customer lists, product compositions, and other
documents
and all copies thereof, made, composed or received by the Executive,
solely or jointly with others, that are in the Executive’s possession,
custody, or control at termination and that are related in any manner
to
the past, present, or anticipated business or any member of the
Company.
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3.4
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Remedies. The
Executive acknowledges that a remedy at law for any breach or attempted
breach of the Executive’s obligations under Sections 3.1, 3.2 and 3.3 may
be inadequate, agrees that the Company may be entitled to specific
performance and injunctive and other equitable remedies in case of
any
such breach or attempted breach and further agrees to waive any
requirement for the securing or posting of any bond in connection
with the
obtaining of any such injunctive or other equitable relief. The
Company shall have the right to offset against amounts to be paid
to the
Executive pursuant to the terms hereof any amounts from time to time
owing
by the Executive to the Company. The termination of the
Agreement shall not be deemed to be a waiver by the Company of any
breach
by the Executive of this Agreement or any other obligation owed the
Company, and notwithstanding such a termination the Executive shall
be
liable for all damages attributable to such a
breach.
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3.5
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Dispute
Resolution. Subject to the Company’s right to seek
injunctive relief in court as provided in Section 3.4 of this Agreement,
any dispute, controversy or claim arising out of or in relation to
or
connection to this Agreement, including without limitation any dispute
as
to the construction, validity, interpretation, enforceability or
breach of
this Agreement,
shall be settled by arbitration administered by the American Arbitration
Association under its National Rules for the Resolution of Employment
Disputes and judgment upon the award rendered by the arbitrator(s)
may be
entered in any court having jurisdiction
thereof.
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3.6
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Acknowledgement
of Parties. The Company and Executive understand and
acknowledge that this Agreement means that neither can pursue an
action
against the other in a court of law regarding any employment dispute,
except for claims involving workers’ compensation benefits or unemployment
benefits, and except as set forth elsewhere in this Agreement, in
the
event that either party notifies the other of its demand for arbitration
under this Agreement. The Company and Executive understand and
agree that this Section 3.5, concerning arbitration, shall not include
any
controversies or claims related to any agreements or provisions (including
provisions in this Agreement) respecting confidentiality, proprietary
information, non-competition, non-solicitation, trade secrets, or
breaches
of fiduciary obligations by the Executive, which shall not be subject
to
arbitration.
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3.7
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Right
to Consult Counsel. Executive has been advised of the
Executive’s right to consult with an attorney prior to entering into this
Agreement.
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3.8
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Successors
of the Company. The
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all
of the business and/or assets of the Company, by agreement in form
and
substance satisfactory to the Executive, expressly to assume and
agree to
perform this Agreement in the same manner and to the same extent
that the
Company would be required to perform it if no such succession had
taken
place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the
Company
in the same amount and on the same terms as the Executive would be
entitled hereunder if the Executive terminated the Executive’s employment
for Good Reason, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be
deemed
the Date of Termination. As used in this Agreement, “Company”
as hereinbefore defined shall include any successor to its business
and/or
assets as aforesaid which executes and delivers the agreement provided
for
in this Section 3 or which otherwise becomes bound by all the terms
and
provisions of this Agreement by operation of
law.
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3.9
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Executive’s
Heirs, etc. The
Executive may not assign the Executive’s rights or delegate the
Executive’s duties or obligations hereunder without the written consent of
the Company. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and
legatees. If the Executive should die while any amounts would
still be payable to the Executive hereunder as if he had continued
to
live, all such amounts, unless other provided herein, shall be paid
in
accordance with the terms of this Agreement to the Executive’s designee
or, if there be no such designee, to the Executive’s
estate.
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3.10
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Notices. Any
notice or communication required or permitted under the terms of
this
Agreement shall be in writing and shall be delivered personally,
or sent
by registered or certified
mail, return receipt requested, postage prepaid, or sent by nationally
recognized overnight carrier, postage prepaid, or sent by facsimile
transmission to the Company at the Company’s principal office and
facsimile number in Marietta, Ohio, or to the Executive at the
address and facsimile number, if any, appearing on the books and
records
of the Company. Such notice or communication shall be deemed
given (a) when delivered if personally delivered; (b) five mailing
days
after having been placed in the mail, if delivered by registered
or
certified mail; (c) the business day after having been placed with
a
nationally recognized overnight carrier, if delivered by nationally
recognized overnight carrier, and (d) the business day after transmittal
when transmitted with electronic confirmation of receipt, if transmitted
by
facsimile.
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| Any party may change the address or facsimile number to which notices or communications are to be sent to it by giving notice of such change in the manner herein provided for giving notice. Until changed by notice, the following shall be the address and facsimile number to which notices shall be sent: |
If
to the Company, to: Xxxxxx X. Xxxxx, General
Counsel
PEOPLES
BANCORP, INC.
000
Xxxxxx
Xxxxxx
Xxxxxxxx,
Xxxx 00000
Fax: (000)
000-0000
If
to
the Executive, to: Xxxxxxx X.
Xxxx
0000
Xxxxxxxx Xx
Xxxxxx,
Xxxx 00000
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3.11
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Amendment
or
Waiver. No
provisions of this Agreement may be modified, waived or discharged
unless
such waiver, modification or discharge is agreed to in writing signed
by
the Executive and such officer as may be specifically designated
by the
Board (which shall not include the Executive). 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
or
dissimilar 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 set forth expressly
in this
Agreement. This
Agreement
constitutes the entire agreement between the Company and the Executive
as
to the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically
set
forth herein.
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3.12
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Invalid
Provisions. Should
any portion of this Agreement be adjudged or held to be invalid,
unenforceable or void, such holding shall not have the effect of
invalidating or voiding the remainder of this Agreement and the parties
hereby agree that the portion so held invalid, unenforceable or void
shall
if possible, be deemed amended or reduced in scope, or otherwise
be
stricken from this Agreement to the extent required for the purposes
of
validity and enforcement thereof. In this regard, the parties
hereto hereby agree that any judicial authority construing this Agreement
shall be empowered to sever any portion of the geographic area or
any
prohibited business activity from the coverage of this Agreement,
and to
reduce the duration of the non-compete period and to apply the provisions
of this Agreement to the remaining portion of the geographic area
or the
remaining business activities not to be severed by such judicial
authority
and to the duration of the non-compete period as reduced by judicial
determination
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3.13
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Survival
of the Executive’s Obligations. The Executive’s obligations
under this Agreement shall survive regardless of whether the Executive’s
employment by the Company is terminated, voluntarily or involuntarily,
by
the Company or the Executive, with or without
Cause.
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3.14
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Counterparts. This
Agreement may be executed in one or more counterparts, each of which
shall
be deemed to be an original but all of which together will constitute
one
and the same instrument.
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3.15
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Governing
Law. This Agreement and any action or proceeding related to
it shall be governed by and construed under the laws of the State
of
Ohio.
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3.16
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Captions
and Gender. The use of Captions and Section headings herein
is for purposes of convenience only and shall not effect the
interpretation or substance of any provisions contained
herein. Similarly, the use of the masculine gender with respect
to pronouns in this Agreement is for purposes of convenience and
includes
either sex who may be a signatory.
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IN
WITNESS WHEREOF, the Executive and a
duly authorized representative of the Company have signed this
Agreement.
| EXECUTIVE: | COMPANY: | ||||
| PEOPLES BANCORP INC. | |||||
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By:/s/
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XXXXXXX X. XXXX |
By:/s/
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XXXXX X. XXXXXXXXXXXX | ||
| Xxxxxxx X. Xxxx | Xxxxx X. Xxxxxxxxxxxx | ||||
| Title: Executive Vice President, Operations | |||||
| September 11, 2007 |
