CHANGE IN CONTROL AGREEMENT
EXHIBIT
10.8
This is an Agreement (the “Agreement”)
made by and between OHIO LEGACY
BANK. (“Company”), and Xxxxxxx Xxxxxxxx (“Executive”), collectively
“The Parties”, effective
this day the 4th of
February 2009 and replaces and supersedes any all agreements between the
parties.
RECITALS
A. Company
is a bank holding company whose subsidiary is engaged in the business of banking
and businesses incidental thereto.
B. Executive
possesses unique skills, knowledge, and experience relating to the businesses of
the Company.
C. Company
desires to recognize the past and future services of Executive, and in that
connection, Executive desires to be assured that, in the event of a change in
control of the Company, Executive will be provided with an adequate severance
payment for termination without cause or as compensation for Executive’s
Severance in the event of a material change in his duties and
functions.
D. Company
desires to be assured of the objectivity of Executive in evaluating a potential
change of control and advising whether or not a potential change in control is
in the best interest of Company and its shareholders.
E. Company
desires to induce Executive to remain in the employ of the Company following a
change of control to provide a continuity of management.
NOW, THEREFORE, in
consideration of the premises and of their mutual covenants expressed in this
Agreement, the parties hereto make the following agreement, intended to be
legally bound thereby:
1. Definitions.
A. Exchange
Act. “Exchange Act” means The Securities Exchange Act of
1934.
B. Change in
Control. The term “Change in Control” means a change in
ownership or control of the Company effected through any of the following
transactions:
(i) The
direct or indirect acquisition by any person or related group of persons, other
than by the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company immediately prior to
such acquisition, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Act of 1934, as amended) of securities possessing
more than 50 percent of the total combined voting power of the Company's
outstanding securities, whether effectuated pursuant to a tender or exchange
offer made directly to the Company's shareholders or pursuant to another
transaction;
(ii) A change
in the composition of the board of directors of the Company over a period of 36
or fewer consecutive months (rounded up to the next whole number) such that a
majority of such respective board members ceases, by reason of one or more
contested elections for such respective board membership, to be comprised of
individuals who either (i) have been board members continuously since the
beginning of such period, or (ii) have been elected or nominated for election as
board members during such period by at least a majority of the board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the board; or
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(iii) The
completion of a transaction requiring shareholder approval for the acquisition
of all or substantially all of the stock or assets of the Company by an entity
other than the Company or any merger of the Company into another entity in which
the Company is not the surviving entity.
C. Code. “Code”
shall mean the Internal Revenue Code of 1986 as amended from time to
time.
D. Company. “Company”
shall include Ohio Legacy Bank, N.A. and any members of its Affiliated Group,
over which Executive has managerial control, as that term is defined in Section
1504 of the Code, and shall include any predecessor corporations of the Company
and its Affiliated Group.
E. Board. “Board”
shall mean the Board of Directors of the Company.
2. Term
of Agreement.
A. This
Agreement shall be effective from the date of this Agreement until the Agreement
Termination Date, which is the earliest of:
(i) The date
this Agreement is mutually rescinded or upon Executive’s resignation other than
as provided in Section 3(A);
(ii) The date
prior to a Change in Control on which the Executive’s employment with the
Company is terminated by death, retirement, disability, resignation, or
dismissal for any reason;
(iii) The date
Executive is terminated for Cause;
(iv) The date
which is two (2) years after a Change in Control;
(v) The date
which Company, or any other member of its Affiliated Group, and over which the
Executive has managerial control, which is a financial institution which is
insured by an agency of any state or the United States Federal
Government:
(1) Becomes
insolvent; or
(2) Has
appointed any conservator or receiver; or
(3) Is
defined by the primary regulator to be in a “troubled condition”;
or
(4) Is
assigned a composite rating of 4 or 5 by the appropriate federal banking agency
or is informed in writing by the Federal Deposit Insurance Corporation that it
is rated 4 or 5 under the Uniform Financial Institution’s Rating System of the
Federal Financial Institutions Examination Council; or
(5) Has
initiated against it by the Federal Deposit Insurance Corporation a proceeding
to terminate or suspend deposit insurance.
(vi) The
date on which it is reasonably determined in good faith and with due care that
the payments called for under this Agreement, or the obligations and promises
assumed and made under this Agreement have become proscribed under applicable
law or regulations. Provided, however, if such law or regulations
apply prospectively only, or for some other reason do not apply to this
Agreement, then this agreement shall not be deemed by the Company to be
proscribed under this Subsection (vi).
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B. This
Agreement shall not change, alter, or amend any rights which either the Company
or the Executive may have in respect of the termination of the employment of
Executive by the Company prior to a Change in Control. This Agreement
is not an employment agreement or a promise of employment. Employee
is an employee at will and the Company or Employee may terminate the employment
relationship at any time. Nothing contained in this Agreement shall
be construed to create any additional right or obligation of Executive to be
employed by Company. If employment of Executive by Company is
terminated by Company or by Executive, for any reason whatsoever, prior to a
Change in Control, Executive and Company shall have only such rights and
obligations in respect of such termination as either of them would have if this
Agreement had not been effected and as specifically set forth in this
Agreement.
C. If the
Company terminates the Executive's employment for cause (as defined below), all
of the Company's obligations hereunder shall immediately
terminate. As used herein, "Cause" shall mean (i) willful misconduct
by the Executive in the performance of his duties, or (ii) gross negligence by
the Executive in the performance of his duties, or (iii) Executive’s continued
failure of and/or refusal to perform, which shall not be cured within fifteen
(15) days following receipt by the Executive of written notice from the Board
specifying the factors or events constituting such failure and/or refusal and
affording the Executive an opportunity within such fifteen (15) day period for
the Executive to correct such deficiencies; or (iv) the Executive’s indictment
or conviction for committing a crime, or (v) the Executive’s commission of an
act of moral turpitude, or (vi) receipt of notice by the Office of the
Comptroller of the Currency that Executive is not properly fulfilling his
duties.
3. Payment
Upon Termination of Employment After a Change in Control.
A. If during
the term of this Agreement as defined by Section 2 and within two (2) years
following a Change in Control, Executive is discharged without Cause or
Executive resigns because Executive has made a reasonable, objective
determination, in good faith and with due care, that:
(i) There has
been a material diminution of Executive’s duties, responsibilities or benefits
has occurred;
(ii) There has
been a change in the principal workplace of Executive to a location more than 45
miles from Executive’s current assigned work location;
(iii) Executive
has received a material demotion;
(iv) There has
been a material change in the number or seniority of personnel reporting to
Executive or a material reduction in the frequency with which, or in the nature
of the latter with respect to which, such personnel are to report to Executive,
other than as part of a Company relocation or reduction in staff;
(v) There has
been a material adverse change in Executive’s perquisites, benefits, contingent
benefits or vacation, other than as part of an overall program applied uniformly
and with equitable effect to all members of the Company’s management;
or
(vi) There has
been a material permanent increase in the required hours of work in the workload
of Executive,
the
Executive shall be entitled to the payment as provided in Subsection C
below.
B. If
Executive is discharged by the Company during the term of this Agreement, other
than for Cause and there
is an announcement of a potential Change in Control within three (3) months of
the discharge, and such
Change in Control occurs within one (1) year of the discharge, then the Company
shall pay to the Executive the benefits as provided for in Subsection C
below.
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C. Upon the
Executive's termination as set forth in Subsection A or B above, the Company
shall pay the Executive in a single lump sum severance pay the amount equal to
the product of (a) 1.5 the Executive's Base Salary in effect for the year of
termination and (b) the Bonus awarded to the Executive for the Company's most
recently completed fiscal year. All stock options previously awarded
to the Executive, whether vested or unvested, shall become immediately
exercisable. In addition, upon termination except for Cause, the
Company, to the extent permitted by the group plan provider, shall permit the
Executive (at the Company’s cost) to continue to participate in its
group health insurance plan for a period of one year from the date of
termination. If the Executive is not permitted by the group health
plan provider to continue participation in the Plan, the Company shall pay, for
one (1) year, an additional amount to Executive on a monthly basis equal to the
Executive’s monthly COBRA payment.
Notwithstanding
the foregoing, the Executive's obligations and the Company's rights under
Sections 6, 7, 8, 9 and 10 shall survive the termination of this
Agreement.
4. Pension
Payments. Nothing contained in this Agreement shall change any
pension benefits or benefits from other qualified or group plans maintained by
the Company to which Executive is otherwise entitled. However,
payments made under this Agreement pursuant to Section 3 shall not be considered
compensation for purposes of a pension plan or any other qualified retirement
plan maintained by the Company.
5. Right to Other
Benefits. The payment to Executive of the amounts as called
for by Sections 3 and 4 shall be Executive’s exclusive remedy and the Company’s
obligation to make the required payments shall be in lieu of all other benefits
and payments except as specifically set forth herein.
6. Protection of
Business. Notwithstanding anything to the contrary contained
elsewhere in this Agreement:
A. Executive
will not at any time (during or after employment with the Company) divulge,
disclose, reveal, or communicate to any person, firm, corporation, partnership,
joint venture or other entity, directly or indirectly, any trade secrets or
other information which Executive may have obtained during the course of his
employment by the Company in respect to any matters affecting or relating to the
banking business of the Company including, without limitation, any of its plans,
policies, business practices, finances, customer information, methods of
operation or other information known to Executive to be historically considered
by the Company to be confidential information.
B. In
addition to any action for damages, the restrictions on competition and other
restrictions imposed upon Executive under this Section 6 of this Agreement may
be enforced by the Company by an action for an injunction, it being agreed that
(in view of the general practical difficulty of determining by computation or
legal proof the exact amount of damages, if any, resulting to the Company from a
violation by Executive of the provisions of this Section 6) that there would be
no adequate remedy at law for any breach by Executive of any such
restriction.
C. The
obligations imposed upon Executive by this Section 6 shall survive the
termination of this Agreement pursuant to Section 2 hereof.
7. Nondisclosure. The
Executive agrees that Executive shall not at any time (whether during or for a
period of two (2) years after the termination of Executive’s employment with the
Company) directly or indirectly copy, disseminate or use, for the Executive's
personal benefit or the benefit of any third party, any Confidential
Information, regardless of how such Confidential Information may have been
acquired, except for the disclosure of such Confidential Information as may be
(i) in keeping with the performance of the Executive's employment duties with
the Company, (ii) as required by law, or (iii) as authorized in writing by the
Company. For purposes of this Agreement, the term "Confidential
Information" shall mean all information or knowledge belonging to, used by, or
which is in the possession of the Company relating to the
Company's business, business plans, strategies, pricing, sales
methods, customers (including, without limitation, the names, addresses or
telephone numbers of such customers), technology, programs, finances, costs,
employees (including, without limitation, the names, addresses or telephone
numbers of any employees), employee compensation rates or policies, marketing
plans, development plans, computer programs, computer systems, inventions,
developments, trade secrets, know how or confidences of the Company or the
Company's business, without regard to whether any of such
Confidential Information may be deemed confidential or material to any third
party, and the Company and the Executive hereby stipulate to the confidentiality
and materiality of all such Confidential Information. The Executive
acknowledges that all of the Confidential Information is and shall continue to
be the exclusive proprietary property of the Company, whether or not prepared in
whole or in part by the Executive and whether or not disclosed to or entrusted
to the custody of the Executive. The Executive agrees that upon the
termination of the Executive's employment with the Company for any reason, the
Executive will return promptly to the Company all memoranda, notes, records,
reports, manuals, pricing lists, prints, customer lists, and other documents
(and all copies thereof) relating to the Company's business which he may then
possess or have with the Executive's control, regardless of whether any such
documents constitute Confidential Information. The Executive further
agrees that Executive shall forward to the Company all Confidential Information
which at any time (including after the period of Executive’s employment with the
Company) should come into the Executive's possession or the possession of any
other person, firm or entity with which the Executive is affiliated in any
capacity.
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8. No Slander. The
Executive agrees not to in any way slander or injure the business reputation or
goodwill of the Company through any contact with customers, vendors, suppliers,
employees or agents of the Company, or in any other way.
9. Work Product. The
Executive agrees that all inventions, innovations, improvements, developments,
methods, designs, analyses, drawings, reports, and all similar or related
information which relates to the Company's actual or anticipated business,
research and development or existing or future products or services and which
are conceived, developed or made by the Executive while employed by the Company
(all of the foregoing being referred to herein as "Work Product") belong to the
Company. The Executive shall perform all actions reasonably
requested by the Company (whether during or after the employment period) to
establish and confirm such ownership of Work Product (including, without
limitation, assignments, consents, powers of attorney and other
instruments).
10. Remedies.
A. The
Executive acknowledges that the restrictions contained in Sections 6, 7, 8, 9
and 10 are reasonable and necessary to protect the legitimate interests of the
Company. If the Executive breaches any of the provisions of Sections
6, 7, 8 and 9 hereof, the Company shall have the right to specifically enforce
the Agreement by means of an injunction, it being acknowledged by the Executive
and agreed upon by the parties that any such breach will cause irreparable
injury to the Company for which money damages alone will not provide an adequate
remedy. The rights and remedies enumerated above shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
at law or in equity.
B. In the
event any of the covenants contained in Sections 6, 7, 8, 9 and 10 or any
portion thereof, shall be found by a court of competent jurisdiction to be
invalid or unenforceable as against public policy or for any other reason, such
court shall exercise its discretion to reform such covenant to the end that the
Executive shall be subject to noncompetition, nonsolicitation and nondisclosure
covenants that are reasonable under the circumstances and are enforceable by the
Company. In any event, if any provision of this Agreement is found
unenforceable for any reason, such provision shall remain in force and effect to
the maximum extent allowable and all unaffected provisions shall remain fully
valid and enforceable and such finding shall in no way affect the enforceability
of any such provision at a subsequent date against a different
employee.
11. Enforceability. The
unenforceability or invalidity of any provision of this Agreement shall not
affect the enforceability or validity of the balance of the
Agreement. In the event that any such provision should be or becomes
invalid for any reason, such provision shall remain effective to the maximum
extent permissible, and the parties shall consult and agree on a legally
acceptable modification giving effect to the commercial objectives of the
unenforceable or invalid provision, and every other provision of this Agreement
shall remain in full force and effect.
12. Binding
Effect. This Agreement shall inure to the benefit of, and be
enforceable by, the parties' successors, representatives, executors,
administrators or assignees.
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13. Notices. All
notices, requests, demands and other communications made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given (a) if delivered, at the time delivered or (b) if mailed, at the time
mailed at any general or branch United States Post Office enclosed in a
registered or certified postage paid envelope, or (c) if couriered, one day
after deposit with a national overnight courier, addressed to the address of the
respective parties as follows:
|
To the
Company:
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Ohio Legacy Bank
000
Xxxx Xxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attn: Secretary
|
|
|
|
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| To the Executive: | Xxxxxxx Xxxxxxxx
0000
Xxxxxx Xxxxxx XX
Xxxxxxxxx,
XX 00000
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or to
such other addresses as the party to whom notice is to be given may have
previously furnished to the other party in writing in the manner set forth
above, provided that notices of changes of address shall only be effective upon
receipt.
14. Entire
Agreement. This Agreement constitutes the entire agreement of
the parties hereto relating to the subject matter hereof, and there are no
written or oral terms or representations made by either party other than those
contained herein. This Agreement supersedes and replaces any and all
employment agreements and agreements providing for payments for services between
the Executive and the Company, all of which are terminated upon the Executive's
execution of this Agreement.
15. Governing Law. The
validity, interpretation, construction, performance and enforcement of this
Agreement shall be governed by the laws of the State of Ohio, without regard to
principles of conflicts of laws. The Company and the Executive hereby
irrevocably submit to the jurisdiction of the courts of the State of Ohio, with
venue in Xxxxx County, over any dispute arising out of this Agreement and agree
that all claims in respect of such dispute or proceeding shall be heard and
determined in such court. The Company and the Executive hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may have to the venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such
dispute. The Company and the Executive hereby consent to process
being served by them as required by law in any suit, action or
proceeding.
16. 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.
17. Payroll Taxes. Any
payments required or permitted to be made or given to Executive under this
Agreement shall be subject to the withholding and other requirements of
applicable laws, and to the deduction requirements of any benefit plan
maintained by the Company in which Executive is a participant, and to all
reporting, filing, and other requirements in respect of such payments, and
Company shall use its best efforts promptly to satisfy all such
requirements.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the day and year
first written above.
| /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx, Senior Vice Presidents and | |||
| Chief Financial Officer | |||
|
OHIO
LEGACY CORP.
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| /s/ D. Xxxxxxx Xxxxxx | |||
|
D.
Xxxxxxx Xxxxxx, President and Chief Executive Officer
|
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