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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of March 1,
1998 by and between and among:
COMMERCE NATIONAL BANK ("CNB"), a National Association, with
its principal place of business at 000 X. Xxxxxx Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxx 00000;
CNBC BANCORP ("CNBC"), an Ohio corporation, with its principal
place of business at 000 X. Xxxxxx Xxxxxx Xxxx, Xxxxxxxxxxx,
Xxxx 00000; and
XXXXXX X. XXXXXXXXX ("XxXxxxxxx"), residing at 0000 Xxxxxxxxx
Xxxx., Xxxxxxxx, Xxxx 00000.
WHEREAS, CNB and CNBC (collectively the "Bank" unless the context
indicates one entity or the other) are engaged in the financial services
business, and the services of XxXxxxxxx have been an invaluable factor
contributing to the prior success enjoyed by the Bank; and
WHEREAS, the Bank wishes to retain the services, knowledge, and
abilities of XxXxxxxxx as the President and Chief Executive Officer of the Bank,
and the Bank also desires to prevent any other competitive business from
securing XxXxxxxxx'x services and utilizing his experience, background and
expertise; and
WHEREAS, XxXxxxxxx is willing to continue in the employ of the Bank and
agrees to be bound by the terms and conditions of this Agreement as hereinafter
set forth; and
WHEREAS, the Board of Directors of CNB and CNBC (the "Boards") have
determined that it is in the best interests of CNB and CNBC and their
shareholders to continue to employ XxXxxxxxx
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as President and Chief Executive Officer and that CNB and CNBC should be bound
by the terms and conditions of this Agreement, and XxXxxxxxx desires to serve in
that capacity.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CONTRACT PERIOD. The Bank shall continue to employ XxXxxxxxx, and
XxXxxxxxx shall serve the Bank, on the terms and conditions set forth in this
Agreement, for the period commencing on the date of this Agreement and ending on
February 28, 2003 (the "Contract Period"). However, the Contract Period may be
extended beyond February 28, 2003, by mutual agreement of XxXxxxxxx and the
Bank, in which event the Contract Period shall end on such date as agreed.
2. POSITION AND DUTIES.
(a) During the Contract Period, XxXxxxxxx shall be the
President and Chief Executive Officer of CNB and CNBC with such duties
and responsibilities as are assigned to him by the Boards consistent
with his position as Chief Executive Officer of both entities.
XxXxxxxxx shall, from time to time, and with the consent of the Boards,
be entitled to delegate with appropriate supervision the performance of
some of his duties and responsibilities to other management personnel
of the Bank.
(b) During the Contract Period, and excluding any periods of
vacation and sick leave to which he is entitled, XxXxxxxxx shall devote
his full attention and time during normal business hours to the
business and affairs of the Bank and shall perform his services
primarily at the Bank's headquarters, wherever the Boards may from time
to time designate it to be, and to the extent necessary to discharge
the responsibilities assigned to him under this Agreement, use his
reasonable best efforts to carry out such responsibilities faithfully
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and efficiently. It shall not be considered a violation of the
foregoing for XxXxxxxxx to (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (iii) manage
personal investments, so long as such activities do not compete with
and are not provided to or for any entity that competes with or intends
to compete with the Bank and do not interfere with the performance of
his responsibilities as the President and Chief Executive Officer of
the Bank in accordance with this Agreement.
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY. During the Contract Period and for the
remainder of the current calendar year which expires on December 31,
1998, XxXxxxxxx shall receive an annual base salary ("Annual Base
Salary") of One Hundred Forty Thousand Dollars ($140,000), payable in
equal installments at intervals not less frequent than monthly. For the
calendar year commencing January 1, 1999, and for each subsequent
calendar year prior to the expiration of the Contract Period, XxXxxxxxx
shall receive an increase in his then Annual Base Salary in an amount
which shall be determined by the Boards, or its designated committee,
but in no event shall the percentage increase be less than fifty
percent (50%) of the percentage increase in the diluted earnings per
common share of CNBC (the "EPS") during the immediately preceding year
over the prior year. In no event shall the Annual Base Salary then
currently being paid be decreased. In calculating the application of
the fifty percent (50%) provision where there is an increase in the EPS
for a year following a year in which there has been a decrease in the
EPS, the minimum percentage increase in the Annual Base Salary shall be
fifty percent (50%) of the sum of the percentage decrease in EPS of the
earlier year and the percentage increase in EPS for the later year.
Exhibit A attached hereto contains example calculations which
illustrate the provisions of this Subparagraph (a).
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(b) BONUS. In addition to the Annual Base Salary, XxXxxxxxx
may be awarded, for each calendar year or portion of a calendar year
ending during the Contract Period, an annual bonus (the annual bonus
from time to time in effect for the then current calendar year is
referred to as the "Annual Bonus"). The Annual Bonus will be as
determined by the Boards, or its designated committee. Any such Annual
Bonus shall be paid in a single cash lump sum no later than ninety (90)
days after the end of the calendar year for which the Annual Bonus is
awarded.
(c) SUPPLEMENTAL RETIREMENT BENEFIT. During the Contract
Period, the Bank shall contribute the sum of Twenty-Five Thousand
Dollars ($25,000.00) each full calendar year, prorated on a daily basis
for partial calendar years, to the trustee of a certain trust (the
"Trust") established by the Bank pursuant to the terms of a Severance
Benefit Trust Agreement (the "Trust Agreement") of even date herewith.
XxXxxxxxx shall be entitled to receive payments from the Trust in
accordance with the terms of this Agreement and the Trust Agreement.
(d) OTHER BENEFITS. During the Contract Period: (i) XxXxxxxxx
shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs of the Bank to the
same extent as the other executive officers of the Bank; and (ii)
XxXxxxxxx and/or XxXxxxxxx'x family, as the case may be, shall be
eligible for participation in, and shall receive all benefits under,
all welfare benefit plans, practices, policies and programs provided by
the Bank (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life insurance, group life
insurance, accidental death and travel accident insurance plans and
programs) to the same extent as the other executive officers of the
Bank. The benefits currently being provided to XxXxxxxxx are set forth
on Exhibit B attached hereto.
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(e) EXPENSES. During the Contract Period, XxXxxxxxx shall be
entitled to receive prompt reimbursement for all reasonable expenses
incurred by him in carrying out his duties under this Agreement,
provided that he complies with the policies, practices and procedures
of the Bank for submission of expense reports, receipts, or similar
documentation of such expenses.
(f) VACATION. XxXxxxxxx shall be entitled to four (4) weeks of
paid vacation during each full calendar year in the Contract Period.
Further, beginning with the calendar year 2000, he shall be entitled to
five (5) weeks of paid vacation.
(g) OPTIONS. Annually, XxXxxxxxx shall be granted options to
purchase shares of the common stock of CNBC in an amount equal to
twenty percent (20%) of his Annual Base Salary for the immediately
preceding year, subject however, to the anti-dilution adjustments, as
and to the extent set forth in the CNBC Bancorp 1996 Non-Qualified
Stock Option Plan (as amended and restated March 18, 1997), and as it
may be subsequently amended, restated or replaced (collectively the
"Plan"), and subject also to any other limitations set forth in the
Plan, including the limitation on the maximum number of options to be
granted each year to any one individual.
(h) LIFE INSURANCE. In addition to any group life insurance
coverage provided to XxXxxxxxx by the Bank under Paragraph (d) above,
the Bank will continue in force and will pay the premiums for an
individual life insurance policy on XxXxxxxxx'x life in the face amount
of Two Million Dollars ($2,000,000) or any replacement thereof.
XxXxxxxxx will have the right to designate the beneficiary of this
policy or any replacement thereof.
(i) DISABILITY POLICY. The Bank will annually reimburse
XxXxxxxxx for the premium paid by him to maintain in force an
individual disability income policy. The
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reimbursement shall be (i) made within ten (10) days following
submission by XxXxxxxxx to the Bank of an expense report with
appropriate supporting documentation and (ii) treated as compensation
to XxXxxxxxx and shall be subject to all appropriate withholdings.
4. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. XxXxxxxxx'x employment shall
terminate automatically upon his death during the Contract Period. The
Bank shall be entitled to terminate XxXxxxxxx'x employment during the
Contract Period due to his Disability. "Disability" means that
XxXxxxxxx has been unable, for a period of either (A) 120 consecutive
calendar days or (B) an aggregate of 180 calendar days in a period of
365 consecutive calendar days, to substantially perform his material
duties under this Agreement, as a result of physical or mental illness
or injury. A termination of XxXxxxxxx'x employment by the Bank due to
his Disability shall be communicated to him by written notice, and
shall be effective on the 30th day after receipt of such notice by him
(the "Disability Effective Date"), unless he returns to work and is
able to substantially perform his duties in accordance with the
provisions of Section 2 before the Disability Effective Date. For and
during any period prior to the Bank electing to terminate XxXxxxxxx'x
employment due to his Disability, when he is receiving partial or full
disability income benefits from either the Bank provided group policy
or his individual disability income policy referred to in Paragraph (i)
of Section 3 above, the Annual Base Salary paid to him shall be reduced
in order to give the Bank credit for the partial or full disability
income benefits being received by XxXxxxxxx.
(b) CAUSE. The Bank may terminate XxXxxxxxx'x employment
during the Contract Period "For Cause" or "Without Cause." "For Cause"
means:
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(i) The continued failure of XxXxxxxxx to
substantially perform the duties and responsibilities of his
position; or
(ii) Illegal conduct or gross misconduct by XxXxxxxxx
that results in material and demonstrable damage to the
business or reputation of the Bank.
With regards to Section 4(b)(i), the Bank shall be required to
provide XxXxxxxxx with written notification regarding those duties and
responsibilities which it determines he has failed to substantially
perform. The Bank must cite specific objectives which it believes would
represent substantial performance and which must be met by XxXxxxxxx.
Further, the Bank must provide XxXxxxxxx with an appropriate and
reasonable time frame to accomplish that substantial performance. Only
upon XxXxxxxxx'x failure to meet those specific objectives within the
stated time frame will there be a right to terminate "For Cause" under
Section 4(b)(i).
Any act or failure to act by XxXxxxxxx that is based upon
authority given him pursuant to a resolution duly adopted by the
Boards, or the advice of counsel for the Bank, shall be conclusively
presumed to be done, or omitted to be done, by XxXxxxxxx in good faith
and in the best interests of the Bank, and shall not give rise to a
termination For Cause under this Paragraph. XxXxxxxxx'x termination For
Cause shall be effective immediately unless the Bank states otherwise.
"Without Cause" shall be termination of XxXxxxxxx'x employment
during the Contract Period by the Boards for any reason other than For
Cause, Death or Disability.
(c) GOOD REASON.
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(i) XxXxxxxxx'x employment may be terminated by him
during the Contract Period for "Good Reason" or "Without Good
Reason." "Good Reason" means:
A. The assignment to XxXxxxxxx of any duties
inconsistent in any respect with Paragraph (a) of
Section 2 of this Agreement, or any other action by
the Bank that results in a material diminution in his
position, authority, duties or responsibilities,
other than an isolated or an insubstantial and
inadvertent action that is not taken in bad faith and
is remedied by the Bank within a reasonable period of
time after receipt of written notice thereof from
XxXxxxxxx; or
B. Any material breach of this Agreement by
the Bank, other than an isolated or an insubstantial
and inadvertent breach that is not taken in bad faith
and is remedied by the Bank within a reasonable
period of time after receipt of written notice
thereof from XxXxxxxxx. A material breach shall
include, but not be limited to, a failure by the Bank
to comply with any provision of Section 3, Section 6
or Paragraph (c) of Section 11 of this Agreement.
(ii) A termination of employment by XxXxxxxxx for
Good Reason shall be communicated to the Bank by written
notice ("Notice of Termination for Good Reason") of the
termination, setting forth in reasonable detail the specific
conduct of the Bank that constitutes Good Reason and the
specific provision(s) of this Agreement on which XxXxxxxxx
relies. A termination of employment by XxXxxxxxx for Good
Reason shall be effective on the fifth (5th) business day
following the date when the Notice of Termination for Good
Reason is given, unless the notice sets
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forth a later date (which date shall in no event be later than
thirty (30) days after the notice is given).
(iii) "Without Good Reason" shall be termination by
XxXxxxxxx of his employment during the Contract Period for any
reason other than those cited under for Good Reason or "change
in control" (as hereafter defined).
(d) CHANGE IN CONTROL. XxXxxxxxx'x employment may be
terminated by him for any reason in the event that during the Contract
Period there has been a "change in control" of the Bank (as defined
below). Solely for the purposes of applying the provisions of the
immediately preceding sentence, if XxXxxxxxx elects to terminate his
employment due to a change in control, then the Date of Termination
shall be the date selected by XxXxxxxxx when he ceases to be employed
by the Bank.
(i) For purposes of this Paragraph (d), a change in
control shall be deemed to occur:
A. When any "person" as defined in Section
(a)(9) of the Securities Exchange Act of 1934 (the
"Exchange Act") and as used in Sections 13(d) and
14(d) thereof, including a "group" as defined in
Section 13(d) of the Exchange Act, but excluding CNBC
and any subsidiary of CNBC, any employee benefit plan
sponsored or maintained by CNBC or CNB or any
subsidiary of CNBC (including any trustee of such
plan acting as trustee), and XxXxxxxxx or any
affiliate of XxXxxxxxx, directly or indirectly,
becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act, as amended from time to
time) of securities of CNBC representing twenty
percent (20%) or more of the combined voting power of
CNBC's then outstanding securities;
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B. When, during any period of twenty-four
(24) consecutive months during the term of this
Agreement, the individuals who, at the beginning of
such period, constitute the Board of Directors of
CNBC (the "Incumbent Directors") cease for any reason
other than death to constitute at least a majority
thereof; provided, however, that a director who was
not a director at the beginning of such 24-month
period shall be deemed to have satisfied such
24-month requirement (and be an Incumbent Director)
if such director was elected by, or on the
recommendation or with the approval of, at least
sixty-seven percent (67%) of the directors who then
qualified as Incumbent Directors either actually
(because they were directors at the beginning of such
24-month period) or by prior operation of this
Subparagraph B; or
C. When the shareholders of either CNBC or
CNB approve a merger or consolidation resulting in
the shareholders of CNBC immediately prior to the
merger or consolidation owning less than fifty
percent (50%) of the surviving entity immediately
following the merger or consolidation, or approve a
sale or disposition of all or substantially all of
either CNBC's or CNB's assets or a plan of partial or
complete liquidation.
(e) NO WAIVER. The failure to set forth any fact or
circumstance in a Notice of Termination for Cause or a Notice of
Termination for Good Reason shall not constitute a waiver of the right
to assert, and shall not preclude the party giving notice from
asserting, such fact or circumstance in an attempt to enforce any right
under or provision of this Agreement.
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(f) DATE OF TERMINATION. The "Date of Termination" means the
date of XxXxxxxxx'x death, the Disability Effective Date, or the date
on which the termination of XxXxxxxxx'x employment by the Bank or by
XxXxxxxxx is effective, as the case may be.
5. OBLIGATIONS OF THE BANK UPON TERMINATION.
(a) UPON CHANGE IN CONTROL. If XxXxxxxxx elects to terminate
his employment on account of the occurrence of a change in control, as
defined in Paragraph (d) of Section 4, the Bank shall pay the amounts
described in Subparagraph (i) below to XxXxxxxxx or in the case of his
death after commencement of payments to his estate or beneficiary and
shall continue the benefits described in Subparagraph (ii) below until
the completion of the payment of the amounts described in Subparagraph
(i) below; and XxXxxxxxx shall have the option described in
Subparagraph (iii) below:
(i) The amounts to be paid as described above are:
X. XxXxxxxxx'x accrued but unpaid cash
compensation (the "Accrued Obligations"), which shall
equal any portion of his Annual Base Salary through
the Date of Termination that has not yet been paid;
(2) any compensation previously deferred by XxXxxxxxx
(together with any accrued interest or earnings
thereon) that has not yet been paid; and (3) any
accrued but unpaid vacation pay; and
X. Xxxxxxxxx payments calculated on an
annual basis and paid on a monthly basis, beginning
one (1) month following the Date of Termination, and
continuing for a total of one hundred twenty (120)
consecutive months. The annual amount shall be
determined by multiplying
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XxXxxxxxx'x Annual Base Salary for the calendar year
in which the Date of Termination occurs by a factor
of two and nine-tenths (2.9), then dividing by a
factor of ten (10).
(ii) The benefits to be continued are benefits to
XxXxxxxxx and/or his family at least as favorable as those
that would have been provided to them under Paragraph (d)(ii)
of Section 3 of this Agreement if XxXxxxxxx'x employment had
continued until the completion of the payments of the amounts
described in Subparagraph (i) above; provided, however, that
during any period when XxXxxxxxx is eligible to receive such
benefits under another employer-provided plan, the benefits
provided by the Bank under this subparagraph may cease. The
foregoing notwithstanding, if the Bank is unable to continue
to provide benefits to XxXxxxxxx and/or his family on account
of his or their ceasing to be eligible for those benefits
under the terms of the applicable plan or policy, then the
Bank will pay to XxXxxxxxx and/or his family on a monthly
basis the cost of providing medical, life and disability
insurance of substantially equal or better coverage.
(iii) XxXxxxxxx shall have the option exercisable
once or more than once, for a period of five (5) years from
the Date of Termination, to elect to sell to CNBC some or all
of his shares of stock in CNBC, in which event CNBC shall be
obligated to purchase the shares as hereinafter provided. The
foregoing election shall be subject, however, to the receipt
by CNBC of whatever regulatory approvals are required. The
exercise of this option by XxXxxxxxx shall be evidenced by the
giving of written notice to CNBC at any time or times prior to
the fifth (5th) anniversary of the Date of Termination. The
notice shall state the number of shares XxXxxxxxx wishes to
sell and his desired price per share (the "Desired Price").
The notice shall not be valid unless the minimum aggregate
value of the shares to be sold based upon
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the Desired Price is One Hundred Fifty Thousand Dollars
($150,000). The closing of such purchase and sale shall take
place at the office of CNBC at a date designated by CNBC,
which date shall not be more than ninety (90) days following
the date or dates of the notice of the exercise of the option
to cause the purchase, and not less than ten (10) days
following such date or dates. At the closing the purchase
price shall be paid in full by cashier's check or the
equivalent.
A. The price to be paid by CNBC for the
shares will be determined in the following manner.
CNBC and XxXxxxxxx shall initially make a best
efforts attempt to agree on the per share price for
the shares. If they are unable to so agree, then
within ten (10) days after the receipt by CNBC from
XxXxxxxxx of his written notification of his desire
to exercise his option, one appraiser shall be named
by CNBC and one appraiser shall be named by
XxXxxxxxx, or if this shall be a purchase after his
death, by the personal representative of XxXxxxxxx'x
estate. The two appraisers shall complete their
appraisals within forty-five (45) days of their
appointments. If the value of the higher appraisal is
no more than One Hundred and Ten Percent (110%) of
the value of the lower, then the purchase price shall
be the average of the two. If the value of the higher
appraisal is more than One Hundred and Ten Percent
(110%) of the value of the lower, then the two (2)
appraisers shall agree upon and appoint a third
appraiser, and the decision of the appraisers shall
be made within five (5) days thereafter and shall be
final on this issue. The average of the conclusions
of the three (3) appraisers shall be utilized for
purposes of determining the purchase price. If the
price as finally determined is ninety-five percent
(95%) or more of the Desired Price, XxXxxxxxx shall
be required to sell at that price at least the number
of shares set forth in the notice which he gave the
Bank. Except as provided in the
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following sentence, a per share price once determined
under this Subparagraph A shall be valid and binding
for all purposes of this Subparagraph (iii) for a
period of six (6) months from the date of its
determination. However, the Bank, in its sole
discretion, may elect to have the price re-determined
at any time during the six (6) month period utilizing
the same procedure. All of the costs of obtaining
these appraisals shall be borne by the Bank.
(iv) If the payments provided under this Agreement
would constitute a "parachute payment" as defined in Section
280G of the Internal Revenue Code of 1986, as amended (the
"Code"), such payments shall be reduced to the largest amount
as will result in no portion of the benefit under Paragraph
5(a) being subject to the excise tax imposed by Section 4999
of the Code or being disallowed as deductions to the Bank
under Section 280G of the Code.
(b) WITHOUT CAUSE: FOR GOOD REASON. If XxXxxxxxx'x employment
is terminated during the Contract Period either by the Bank Without
Cause as provided in Paragraph (b) of Section 4, or by XxXxxxxxx for
Good Reason as provided in Paragraph (c) of Section 4, the Bank shall
pay the amounts described in Subparagraph 5(a)(i)(A) above to
XxXxxxxxx, shall continue to pay his Annual Base Salary for a period of
one (1) year following the Date of Termination, and shall continue the
benefits described in Subparagraph 5(a)(ii) above for a period of one
year following the Date of Termination; and in the case XxXxxxxxx'x
employment is terminated by the Bank Without Cause then XxXxxxxxx shall
have the option described in Subparagraph 5(a)(iii) above. Further,
XxXxxxxxx shall also be entitled to receive in a single payment, within
thirty (30) days of the Date of Termination, all of the funds then
either allocated or credited to XxXxxxxxx under the Trust plus the
before tax income received from the investment of those funds. The Bank
shall be required to make a
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prorated contribution to the Trust of the amount required of it under
Paragraph (c) of Section 3 for the calendar year in which the Date of
Termination occurs, which contribution shall be made within the
aforesaid thirty (30) day period. After the Date of Termination, the
Bank shall be relieved of any further obligation to contribute to the
Trust.
(c) FOR CAUSE; WITHOUT GOOD REASON. If XxXxxxxxx'x employment
is terminated during the Contract Period by the Bank For Cause as
provided in Paragraph (b) of Section 4, or by XxXxxxxxx Without Good
Reason as provided in Paragraph (c) of Section 4, then he shall be
entitled to be paid the amounts described in Paragraph 5(a)(i)(A).
(d) EXPIRATION OF CONTRACT PERIOD. If XxXxxxxxx'x employment
is terminated for any reason after the expiration of the Contract
Period, he shall be entitled to receive in a single payment, within
thirty (30) days of the Date of Termination, all of the funds then
either allocated or credited to XxXxxxxxx under the Trust plus the
before tax income received from the investment of those funds.
6. FUNDING OF SUPPLEMENTAL RETIREMENT BENEFITS. Upon the occurrence of
a "change in control" as defined in Paragraph (d) of Section 4, then within ten
(10) days thereafter the Bank shall contribute to the trustee of the Trust in a
single payment that amount which shall be necessary to fully fund the benefit to
be paid to XxXxxxxxx by the Bank as described in Paragraph (a)(i)(B) of Section
5. Furthermore, if the change in control is due to the sale, merger or
consolidation of either CNBC or CNB or the assets of either of them, then such
contribution will be required prior to the date of the consummation of such
sale, merger or consolidation. In determining the amount necessary to fully fund
the obligation, the Bank shall be entitled to discount its future liability to
XxXxxxxxx by a rate equal to the interest rate then being paid on United States
Treasury obligations having a maturity of ten (10) years.
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7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit XxXxxxxxx'x continuing or future participation in any plan, program,
policy or practice provided by the Bank or any of its affiliated companies for
which he may qualify, nor shall anything in this Agreement limit or otherwise
affect such rights as XxXxxxxxx may have under any contract or agreement with
the Bank. Vested benefits and other amounts that XxXxxxxxx is otherwise entitled
to receive under any plan, policy, practice or program of, or any contract or
agreement with the Bank on or after the Date of Termination shall be payable in
accordance with such plan, policy, practice, program, contract or agreement, as
the case may be, except as explicitly modified by this Agreement.
8. FULL SETTLEMENT. The Bank's obligation to make the payments provided
for in, and otherwise to perform its obligations under, this Agreement shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action that the Bank may have against XxXxxxxxx or others. In no event
shall XxXxxxxxx be obligated to seek other employment or take any other action
by way of mitigation of the amounts payable to XxXxxxxxx under any of the
provisions of this Agreement and such amounts shall not be reduced, regardless
of whether XxXxxxxxx obtains other employment so long as such other employment
does not conflict with the obligations set forth in Section 10 below. The Bank
agrees to pay, as incurred, to the fullest extent permitted by law, all legal
fees and expenses that XxXxxxxxx may reasonably incur as a result of any contest
by the Bank, XxXxxxxxx or others of the validity or enforceability of, or
liability under, any provision of this Agreement, together with interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended, but only upon
the condition that the contest is in the context of or relates to a "change of
control" as that term is defined in Paragraph (d) of Section 4 above.
9. CONFIDENTIAL INFORMATION. XxXxxxxxx shall hold in a fiduciary
capacity for the benefit of the Bank all secret or confidential information,
knowledge or data relating to the Bank or
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any company affiliated therewith and their respective businesses that he obtains
during his employment by the Bank and that is not public knowledge (other than
as a result of XxXxxxxxx'x violation of this Section 9) ("Confidential
Information"). XxXxxxxxx shall not communicate, divulge or disseminate
Confidential Information at any time during or after his employment with the
Bank, except with the prior written consent of the Bank or as otherwise required
by law or legal process.
10. NONCOMPETITION; NONSOLICITATION.
(a) During the Contract Period and during the two (2) year
period following the termination of his employment with the Bank (the
"Restriction Period"), XxXxxxxxx shall not become associated with any
entity, whether as a principal, partner, employee, consultant or
shareholder (other than as a holder of not in excess of one percent
(1%) of the outstanding voting shares of any company) that is, or
intends to be, engaged in any business which is in competition with the
business of the Bank or any of its subsidiaries in any geographic area
in which the Bank or any of its subsidiaries operates an office which
employs at least one (1) person (a "Competitor"). The restrictive
covenant set forth in this Paragraph (a) shall not apply, however, if
the termination of XxXxxxxxx'x employment is on account of the Bank
exercising its right to terminate his employment under Paragraph (a) of
Section 4 in the event of his Disability.
(b) During the Contract Period and during the two (2) year
period following the termination of his employment with the Bank (the
"Nonsolicitation Period"), XxXxxxxxx shall not, directly or indirectly,
encourage or solicit, or assist any other person or firm in encouraging
or soliciting, any person that during the two year period preceding
such termination of his employment with the Bank is or was engaged in a
business relationship with the Bank or any of its subsidiaries to
terminate its relationship with the Bank or any of
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its subsidiaries or to engage in a business relationship with a
Competitor. The restrictive covenant set forth in this Paragraph (b)
shall not apply, however, if the termination of XxXxxxxxx'x employment
is on account of the Bank exercising its right to terminate his
employment under Paragraph (a) of Section 4 in the event of his
Disability.
(c) During the Nonsolicitation Period, XxXxxxxxx will not,
except with the prior written consent of the Bank, directly or
indirectly, induce any employee of the Bank or any of its subsidiaries
to terminate employment with such entity, and will not, directly or
indirectly, either individually or as owner, agent, employee,
consultant or otherwise, employ, offer employment or cause employment
to be offered to any person who is or was employed by the Bank or a
subsidiary thereof unless such person shall have ceased to be employed
by such entity for a period of at least six (6) months.
(d) Promptly following his termination of employment,
XxXxxxxxx shall return to the Bank all property of the Bank, and all
copies thereof in his possession or under his control, including,
without limitation, all Confidential Information in whatever media such
Confidential Information is maintained.
(e) XxXxxxxxx acknowledges and agrees that the Restriction
Period and the Nonsolicitation Period and the matters and territories
covered thereby are fair and reasonable and the result of negotiation,
and further acknowledges and agrees that the covenants and obligations
of him in Section 9 and this Section 10 with respect to noncompetition,
nonsolicitation, confidentiality and Bank property relate to special,
unique and extraordinary matters and that a violation of any of the
terms of such covenants and obligations will cause the Bank irreparable
injury for which adequate remedies are not available at law. Therefore,
XxXxxxxxx agrees that the Bank shall be entitled to an injunction,
restraining order or such other equitable relief as a court of
competent
19
jurisdiction may deem necessary or appropriate to restrain him from
committing any violation of such covenants and obligations. These
injunctive remedies are cumulative and are in addition to any other
rights and remedies the Bank may have at law or in equity.
11. SUCCESSORS.
(a) This Agreement is personal to XxXxxxxxx and, without the
prior written consent of the Bank, shall not be assignable by him
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by
XxXxxxxxx'x legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Bank and its successors and assigns.
(c) The Bank shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise (an
"Acquisition")) to all or substantially all of the business and/or
assets of the Bank expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Bank would
have been required to perform it if no such succession had taken place.
As used in this Agreement, "Bank" shall mean both the Bank as defined
above and any such successor that assumes and agrees to perform this
Agreement, by operation of law or otherwise.
12. MISCELLANEOUS.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Ohio without reference to
principles of conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. This
20
Agreement may not be amended or modified except by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to XxXxxxxxx:
----------------
Xxxxxx X. XxXxxxxxx
0000 Xxxxxxxxx Xxxx.
Xxxxxxxx, Xxxx 00000
With a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxx, Xxxxxx & Parks
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
If to the Bank:
Commerce National Bank
000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000
Attention: Secretary
or to such other address as either party furnishes to the other in
writing in accordance with this paragraph. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
21
(d) Notwithstanding any other provision of this Agreement, the
Bank may withhold from amounts payable under this Agreement all
Federal, state, local and foreign taxes that are required to be
withheld by applicable laws or regulations.
(e) XxXxxxxxx'x or the Bank's failure to insist upon strict
compliance with any provision of, or to assert any right under, this
Agreement (including, without limitation, the right of XxXxxxxxx to
terminate employment for Good Reason pursuant to Paragraph (c) of
Section 4 of this Agreement) shall not be deemed to be a waiver of such
provision or right or of any other provision of or right under this
Agreement.
IN WITNESS WHEREOF, XxXxxxxxx has hereunto set his hand and, pursuant
to the authorization of their Board of Directors, CNB and CNBC have caused this
Agreement to be executed in their name on their behalf, all as of the day and
year first above written.
COMMERCE NATIONAL BANK
By:
------------------------------------------
Xxxx X. Xxxxxxxxxxx, Vice President
& Chief Operating Officer
CNBC BANCORP
By:
------------------------------------------
Xxxx X. Xxxxxxxxxxx, Vice President
XXXXXX X. XxXXXXXXX, INDIVIDUAL
By:
------------------------------------------
Xxxxxx X. XxXxxxxxx
