EXHIBIT 10
Form of Change in Control Agreement between Registrant and three (3)
executive officers
CHANGE OF CONTROL SEVERANCE BENEFITS AGREEMENT
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THIS AGREEMENT, executed in duplicate at Emlenton, Pennsylvania, this ,
by and between the FARMERS NATIONAL BANK OF EMLENTON, a National Bank organized
and existing under and by virtue of the Laws of the United States of America
with its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (hereinafter referred to as the "Bank");
AND
,
(hereinafter referred to as "Employee").
WHEREAS, the Employee has been offered employment by the Bank as and
will become an integral part of, and important to, the reliable and efficient
operation of the Bank; and
WHEREAS, the parties recognize that a change in control of the Bank may
have an adverse effect on or cause the departure of the Employee; and
WHEREAS, the Employee has requested severance benefits in the event of
the change of control and the Bank has offered severance benefits in the event
of such change of control of the Bank as an inducement to Employee to accept
employment with the Bank; and
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WHEREAS, the parties wish to reduce the agreement to provide severance
benefits in the event of a change in control of the Bank to writing.
NOW THEREFORE, in consideration of the mutual promises contained
herein, the Bank and Employee agree as follows:
1. DEFINITIONS. The following terms shall have the
meanings set forth below:
A. "Change of Control" of the Bank shall be deemed to have occurred if:
(i) A change in control of a nature that would be required to
be reported pursuant to the regulations promulgated under the
Securities Exchange Act of 1934 the ("Exchange Act") to the
extent that any "person", as such term is used in the Exchange
Act other than any "person" who is on this date a director or
officer of Emclaire Financial Corp, is or becomes the
"Beneficial Owner" as defined under the rules promulgated
under the Exchange Act, directly or indirectly, of securities
of Emclaire Financial Corp representing twenty-five percent
(25%) or more of the combined voting power of Emclaire
Financial Corp's then outstanding securities; or
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(ii) During any period of two (2) consecutive years during the
term of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors of Emclaire
Financial Corp cease for any reason to constitute at least a
majority, unless the election of each director who is not a
director at the beginning of the period has been approved in
advance by directors representing at least two-thirds (2/3rds)
of the directors then in office who were directors at the
beginning of the period.
B. "Disability" shall mean an illness or accident which
prevents the Employee from performing his duties and
responsibilities for the Bank for a period of at least
six (6) consecutive months.
C. "Good Reasons" shall have the meaning set forth in
paragraph 5 hereinafter.
D. "Normal Retirement" shall mean retirement on or after
the "Normal Retirement Age" as defined in the
Retirement Plan for Employees of the Farmers National
Bank of Emlenton currently in effect or as amended in
the future.
E. "Qualifying Termination" shall have the meaning set
forth in paragraph 4 hereinafter.
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F. "Retirement" shall mean retirement at any time prior to
"Normal Retirement" as defined in paragraph 1.D. of
this Agreement
G. "Severance Benefits" shall have the meaning
described in paragraph 6 hereinafter.
2. TERM. This Agreement shall commence as of the date hereof
and shall terminate except to the extent that any obligation of the Bank
hereunder remains unpaid as of such time, upon the earliest of:
A. Five (5) years from the date of this Agreement, unless a
change of control of the Bank has occurred within such five
year period, in which case the term of years under this
Section shall be the later of
(i) Five years from the date of this Agreement; or
(ii) Two years from the date of the change of control; or
(iii) The date on which all payments payable under this
Agreement are paid if a termination of employment or
a notice relating to the Employee's termination of
employment occurs or is provided on or before two (2)
years from the date of change of control.
B. The Employee's disability; or
C. The termination of the Employee's employment with the
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Bank as a result of the Employee's death, conviction of a
felony, retirement or the Employee's voluntary resignation of
employment other than for good reason.
D. The term of this Agreement specified in paragraph 2.A. herein
shall be extended for a period of one year beyond the
expiration date then in effect on each anniversary date of the
commencement date of this Agreement unless the Bank shall
provide the Employee with written notice to the contrary prior
to each renewal date. In no event shall the Term continue
after the date of Normal Retirement.
3. EMPLOYMENT STATUS. Notwithstanding any provisions set forth
in this Agreement, nothing herein shall be deemed to create an employment
agreement between the Bank and Employee. Unless the Bank and Employee are bound
by a separate Employment Agreement, the Employee's employment with the Bank is
terminable at will by the Bank or the Employee may terminate his employment at
any time, with or without cause, subject to the Bank's obligations to provide
Severance Benefits as required hereunder.
4. QUALIFYING TERMINATION. A voluntary termination by employee
for Good Reason, or termination for reasons other than death, conviction of a
felony, disability, normal retirement within twenty-four (24) months after the
date of a change of control of Emclaire Financial Corp shall result in the
payment of Severance Benefits.
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5. TERMINATION FOR GOOD REASON. The Employee may terminate his
employment with the Bank for Good Reason at any time within twenty-four (24)
months after the date of a change of control and be entitled to compensation
under paragraph 6 of this Agreement. For purposes of this Agreement "Good
Reason" shall mean:
A. Any change in Employee's duties, responsibilities,
status, titles, or offices in effect immediately prior
to a change in control of the Bank.
B. A reduction in Employee's annual salary immediately prior to a
change of control or as the same may be increased from time to
time.
C. Any material diminution of the benefits (including
insurance, vacation or disability) which were in effect
prior to the change of control of the Bank.
D. A relocation of the Bank's headquarters offices or the
Employee's place of business following a change of control to
a place beyond ten (10) miles from the current headquarters
offices or the Employee's place of business.
E. Any material breach of this Agreement which has not
been cured within ten (10) days after a notice of non-
compliance has been given by Employee to the Bank.
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F. Any failure of the Bank to obtain the assumption of
this Agreement by any successor or assign of the Bank.
6. SEVERANCE BENEFITS UPON TERMINATION OF EMPLOYMENT. In the
event of a qualifying termination within two (2) years from the date from a
change of control, the Bank shall pay or provide the following severance
benefits to the Employee:
A On the fifth (5th) business day following the date of
termination, a lump sum cash payment in the amount of two (2)
times the Employee's base annual compensation immediately
preceding a change of control or immediately prior to the date
of termination, whichever is higher; and
B. For two (2) years after the date of termination the Bank shall
arrange to provide the Employee with life, disability,
accident and health insurance benefits substantially similar
to what was in place immediately prior to the date of
termination, provided however, that any such payment shall be
reduced to the extent that these benefits are provided to
Employee from a subsequent employer; and
C. Legal expenses and fees incurred by Employee in his or her
attempt to obtain severance benefits following a qualifying
termination; and
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D. Unpaid salary and accrued vacation pay.
E. The Employee shall not be required to mitigate the amount of
any payment of severance benefits if he is seeking other
employment, except as set forth hereinbefore.
7. SUCCESSORS. In addition to any obligations imposed by law upon any
successor to the Bank, the Bank will require any successor to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Bank would be required to perform if no such event had taken place.
8. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not effect the validity or enforceability of any other
provision hereof.
9. NON-DISCLOSURE. Employee will not, during or after the term of this
Agreement, directly or indirectly, disseminate or disclose to any person, firm
or entity, except to his or her family and legal advisor, the terms of this
Agreement without the written consent of the Bank.
10. APPLICABLE LAW. This Agreement shall be governed by
the laws of the Commonwealth of Pennsylvania.
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11. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extent that the parties may otherwise reach a mutual
settlement of such issue. The Bank shall incur the cost of all fees and expenses
associated with filing a request for arbitration with the AAA, whether such
filing is made on behalf of the Bank or the employee, and the costs and
administrative fees associated with employing the arbitrator and related
administrative expenses assessed by the AAA. The Bank shall reimburse the
Employee for all reasonable costs and expenses, including reasonable attorneys'
fees, arising from such dispute, proceedings or actions, following delivery of
the decision of the arbitrator. Such reimbursement shall be paid within ten (10)
days of Employee furnishing to the Bank evidence, which may be in the form,
among other things, of a canceled check or receipt, of any costs or expenses
incurred by Employee.
