Exhibit 10.8
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is effective as of April 1,
2002, 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. XXXXXX ("Xxxxxx"), residing at 0000
Xxxxxxx Xxxxx Xxxxx, Xxxxxxxx, XX 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
WHEREAS, the Bank wishes to retain the services, knowledge, and abilities
of Xxxxxx as the Chief Financial Officer of CNB, and the Bank also desires to
prevent any other competitive business from securing Xxxxxx'x services and
utilizing her experience, background and expertise; and
WHEREAS, Xxxxxx 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 Xxxxxx as Chief Financial Officer and that
CNB and CNBC should be bound by the terms and conditions of this Agreement, and
Xxxxxx desires to serve in that capacity.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CONTRACT PERIOD.
The Bank shall continue to employ Xxxxxx, and Xxxxxx 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 March 31,
2005 (the "Contract Period"). However, the Contract Period may be extended
beyond March 31, 2005, by mutual agreement of Xxxxxx 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, Xxxxxx shall be the Chief Financial
Officer of CNB with such duties and responsibilities as are assigned to
her by the Chief Executive Officer consistent with her position. Xxxxxx
shall, from time to time, and with the consent of the Chief Executive
Officer, be entitled to delegate with appropriate supervision the
performance of some of her 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 she is entitled, Xxxxxx shall devote her
full attention and time during normal business hours to the business and
affairs of the Bank, shall perform her services wherever the Boards may
from time to time designate, and to the extent necessary to discharge the
responsibilities assigned to her under this Agreement use her reasonable
best efforts to carry out such responsibilities faithfully and
efficiently. It shall not be considered a violation of the foregoing for
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Xxxxxx to serve on corporate, civic or charitable boards or committees, 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 her responsibilities as the Chief
Financial Officer of CNB 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, 2002, Xxxxxx shall
receive an annual base salary ("Annual Base Salary") of Ninety Four
Thousand and Five Hundred Dollars ($94,500), payable in equal installments
at intervals not less frequent than monthly. For the calendar year
commencing January 1, 2003, and for each subsequent calendar year prior to
the expiration of the Contract Period, an adjustment to Xxxxxx'x Annual
Base Salary shall be determined by the Chief Executive Officer.
(b) SUPPLEMENTAL RETIREMENT BENEFIT. Xxxxxx currently has in place a
Deferred Compensation Agreement dated December 31, 1997 by and between
herself and the Bank and subsequently amended on October 4, 2001, a copy
of which is attached as Exhibit A.
(c) OTHER BENEFITS. During the Contract Period: (i) Xxxxxx 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) Xxxxxx and/or Xxxxxx'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,
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without limitation, medical, prescription, dental, disability, salary
continuance, employee life insurance, group life insurance and accidental
death insurance plans and programs) to the same extent as the other
executive officers of the Bank. The benefits currently being provided to
Xxxxxx are set forth on Exhibit B attached hereto.
(d) EXPENSES. During the Contract Period, Xxxxxx shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by
her in carrying out her duties under this Agreement, provided that she
complies with the policies, practices and procedures of the Bank for
submission of expense reports, receipts, or similar documentation of such
expenses.
(e) VACATION. Xxxxxx shall be entitled to four (4) weeks of paid
vacation during each full calendar year in the Contract Period.
(f) OPTIONS. Annually, Xxxxxx shall be granted options to purchase
shares of the common stock of CNBC in an amount equal to twenty percent
(20%) of her 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 1999 Stock Option Plan and as it may be
subsequently amended, restated or replaced and as set forth in any future
additional stock option plans (collectively the "Plans"), and subject also
to any other limitations set forth in the Plans, including the limitation
on the maximum number of options to be granted each year to any one
individual.
(g) DISABILITY POLICY. The Bank will annually reimburse Xxxxxx for
the premium paid by her to maintain in force an individual disability
income policy. The reimbursement shall be (i) made within ten (10) days
following submission by Xxxxxx to the Bank of an expense report with
appropriate supporting documentation and
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(ii) treated as compensation to Xxxxxx and shall be subject to all
appropriate withholdings.
4. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. Xxxxxx'x employment shall terminate
automatically upon her death during the Contract Period. The Bank shall be
entitled to terminate Xxxxxx'x employment during the Contract Period due
to her Disability. "Disability" means that Xxxxxx has been unable, for a
period of either (A) 90 consecutive calendar days or (B) an aggregate of
120 calendar days in a period of 365 consecutive calendar days, to
substantially perform her material duties under this Agreement, as a
result of physical or mental illness or injury. A termination of Xxxxxx'x
employment by the Bank due to her Disability shall be communicated to her
by written notice, and shall be effective on the 30th day after receipt of
such notice by her (the "Disability Effective Date"), unless she returns
to work and is able to substantially perform her duties in accordance with
the provisions of Section 2 before the Disability Effective Date.
(b) FOR CAUSE. The Bank may terminate Xxxxxx'x employment during the
Contract Period "For Cause". "For Cause" means:
(i) The continued failure of Xxxxxx to substantially perform the
duties and responsibilities of her position; or
(ii) Illegal conduct or gross misconduct by Xxxxxx that results
in material and demonstrable damage to the business or reputation of
the Bank.
(iii) With regards to Section 4(b)(i), the Bank shall be
required to provide Xxxxxx with written notification regarding those
duties and
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responsibilities that it determines she has failed to substantially
perform. The Bank must cite specific objectives, which it believes,
would represent substantial performance and which Xxxxxx must meet.
Further, the Bank must provide Xxxxxx with an appropriate and
reasonable time frame to accomplish that substantial performance.
Only upon Xxxxxx'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 Xxxxxx that is based upon authority
given her 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 Xxxxxx in good faith and in
the best interests of the Bank, and shall not give rise to a
termination For Cause under this Paragraph. Xxxxxx'x termination For
Cause shall be effective immediately unless the Bank states
otherwise.
(c) WITHOUT CAUSE. The Bank may terminate Xxxxxx'x employment during
the Contract Period "Without Cause." "Without Cause" means:
(i) Termination of Xxxxxx'x employment during the Contract
Period by the Bank for any reason other than For Cause, Death or
Disability.
(d) FOR GOOD REASON. Xxxxxx'x employment may be terminated by her
during the Contract Period "For Good Reason." "For Good Reason" means:
(i) The assignment to Xxxxxx of any duties inconsistent in any
material respect with Paragraph (a) of Section 2 of this Agreement,
or any other action by the Bank that results in a material
diminution in her 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
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Bank within a reasonable period of time after receipt of written
notice thereof from Xxxxxx; or
(ii) 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 Xxxxxx. A material breach shall include, but not be limited to,
a failure by the Bank to comply with any provision of Section 3 or
Paragraph (c) of Section 10 of this Agreement.
(iii)A termination of employment by Xxxxxx 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
For Good Reason and the specific provision(s) of this Agreement on
which Xxxxxx relies. A termination of employment by Xxxxxx under
Section 4(d) 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 forth a later date (which date shall
in no event be later than thirty (30) days after the notice is
given) which is agreed to by the President or Board.
(e) WITHOUT GOOD REASON. Xxxxxx'x employment may be terminated by
her during the Contract Period "Without Good Reason." "Without Good
Reason" means:
(i) Termination by Xxxxxx of her employment during the Contract
Period for any reason other than those cited under For Good Reason.
(f) 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
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giving notice from asserting, such fact or circumstance in an attempt to
enforce any right under or provision of this Agreement.
(g) DATE OF TERMINATION. The "Date of Termination" means the date of
Xxxxxx'x death, the Disability Effective Date, or the date on which the
termination of Xxxxxx'x employment by the Bank or by Xxxxxx is effective,
as the case may be.
5. OBLIGATIONS OF THE BANK UPON TERMINATION.
(a) "WITHOUT CAUSE" OR "FOR GOOD REASON". If Xxxxxx'x employment is
terminated during the Contract Period either by the Bank Without Cause as
provided in Paragraph (c) of Section 4, or by Xxxxxx For Good Reason as
provided in Paragraph (d) of Section 4, the Bank shall pay the amounts
described in Subparagraphs (i)(A), (i)(B), and (i)(C) below to Xxxxxx or
in the case of her death after commencement of payments, to her 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)(B) below:
(i) The amounts to be paid are as follows:
X. Xxxxxx'x accrued but unpaid cash compensation (the
"Accrued Obligations"), which shall equal any portion of her
Annual Base Salary through the Date of Termination that has not
yet been paid; (2) any compensation previously deferred by
Xxxxxx (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 six (6)
consecutive
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months. The monthly amount shall be determined by multiplying
Xxxxxx'x Annual Base Salary for the calendar year in which the
Date of Termination occurs by a factor of one-half (0.5), then
dividing by a factor of six (6).
C. Amounts accrued and vested under the Deferred
Compensation Agreement dated December 31, 1997 and subsequently
amended on October 4, 2001, attached as Exhibit A.
(ii) The benefits to be continued are benefits to Xxxxxx and/or
her family at least as favorable as those that would have been
provided to them under Paragraph (c)(ii) of Section 3 of this
Agreement if Xxxxxx'x employment had continued until the completion
of the payments of the amounts described in Subparagraph (i)(B)
above; provided, however, that during any period when Xxxxxx 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 medical, life or disability benefits to Xxxxxx
and/or her family on account of her or their ceasing to be eligible
for those benefits under the terms of the applicable plan or policy,
then the Bank will pay to Xxxxxx and/or her family on a monthly
basis the cost of providing medical, life and disability insurance
of substantially equal or better coverage.
(iii) 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
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4999 of the Code or being disallowed as deductions to the Bank under
Section 280G of the Code.
(b) FOR CAUSE; WITHOUT GOOD REASON. If Xxxxxx'x employment is
terminated during the Contract Period by the Bank For Cause as provided in
Paragraph (b) of Section 4, or by Xxxxxx Without Good Reason as provided
in Paragraph (e) of Section 4, then she shall be entitled to be paid the
amounts described in Paragraph 5(a)(i)(A) and 5(a)(i)(C) only.
6. NON-EXCLUSIVITY OF RIGHTS.
Nothing in this Agreement shall prevent or limit Xxxxxx'x continuing
or future participation in any plan, program, policy or practice provided
by the Bank or any of its affiliated companies for which she may qualify,
nor shall anything in this Agreement limit or otherwise affect such rights
as Xxxxxx may have under any contract or agreement with the Bank. Vested
benefits and other amounts that Xxxxxx 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.
7. 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
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set-off, counterclaim, recoupment, defense or other claim, right or action
that the Bank may have against Xxxxxx or others. In no event shall Xxxxxx
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to Xxxxxx under any of the provisions of
this Agreement and such amounts shall not be reduced, regardless of
whether Xxxxxx obtains other employment so long as such other employment
does not conflict with the obligations set forth in Section 9 below.
8. CONFIDENTIAL INFORMATION.
Xxxxxx 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 any company affiliated therewith and their respective businesses
that she obtains during her employment by the Bank and that is not public
knowledge (other than as a result of Xxxxxx'x violation of this Section 8)
("Confidential Information"). Xxxxxx shall not communicate, divulge or
disseminate Confidential Information at any time during or after her
employment with the Bank, except with the prior written consent of the
Bank or as otherwise required by law or legal process.
9. NONCOMPETITION; NONSOLICITATION.
(a) During the Contract Period and during the six (6) month period
following the termination of her employment with the Bank (the
"Restriction Period"), Xxxxxx 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
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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 Xxxxxx'x employment is on account of the Bank exercising
its right to terminate her employment under Paragraph (a) of Section 4 in
the event of her Disability.
(b) During the Contract Period and during the twelve (12) month
period following the termination of her employment with the Bank (the
"Nonsolicitation Period"), Xxxxxx 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 her 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 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 Xxxxxx'x employment is on account of the Bank exercising
its right to terminate her employment under Paragraph (a) of Section 4 in
the event of her Disability.
(c) During the Nonsolicitation Period, Xxxxxx 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.
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(d) Promptly following her termination of employment, Xxxxxx shall
return to the Bank all property of the Bank, and all copies thereof in her
possession or under her control, including, without limitation, all
Confidential Information in whatever media such Confidential Information
is maintained.
(e) Xxxxxx 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 her in
Section 8 and this Section 9 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, Xxxxxx
agrees that the Bank shall be entitled to an injunction, restraining order
or such other equitable relief as a court of competent jurisdiction may
deem necessary or appropriate to restrain her 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.
10. SUCCESSORS.
(a) This Agreement is personal to Xxxxxx and shall not be assignable
by her otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by
Xxxxxx`s legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Bank and its successors and assigns.
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(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.
11. 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 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 XXXXXX:
------------
Xxx Xxxxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
IF TO THE BANK:
--------------
Commerce National Bank
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000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
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 lack of enforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(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) Xxxxxx'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 Xxxxxx to terminate
employment For Good Reason pursuant to Paragraph (d) 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.
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IN WITNESS WHEREOF, Xxxxxx has hereunto set her 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 Xxxxxx X. Xxxxxx, INDIVIDUAL
By: By:
----------------------- ---------------------
Xxxxxx X. XxXxxxxxx Xxxxxx X. Xxxxxx
Chief Executive Officer and President
CNBC BANCORP
By:
-----------------------
Xxxxxx X. XxXxxxxxx
Chairman
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Exhibit B - Benefits
Commerce National Bank 401(k) Savings Plan and Trust
Medical and Prescription Plan Insurance
Medical Flexible Spending Account
Dental, Vision and Well-Care Reimbursement Plan
Group Life and Accidental Death and Dismemberment (AD&D) Insurance
Voluntary Life and Accidental Death and Dismemberment (AD&D) Insurance
Sick Days
Bank Short Term Disability Plan
Group Long Term Disability Insurance
Health Club Reimbursement
Paid Federal Holidays
Floating Holidays
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