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EXHIBIT 10
[CB FINANCIAL LETTERHEAD]
CHANGE OF CONTROL AGREEMENT
This CHANGE OF CONTROL AGREEMENT ("Agreement") is made effective as of the
first day of March 1995, by and between CB Financial Corporation, a Michigan
corporation having its principal place of business in Jackson, Michigan (the
"Company"), and Xxxxxx X. Xxxxx (Executive), an individual currently residing
in Grand Rapids, Michigan, (the "Employee").
1. PAYMENT OF SEVERANCE AMOUNT. If the Employee's employment by the
Company or any subsidiary or successor of the company shall be subject to an
Involuntary Termination within the covered Period, then the Company shall pay
the Employee an amount equal to the applicable Severance Amount, payable within
15 days after the Termination Date.
2. DEFINITIONS. All the terms defined in this paragraph 2 shall have the
meanings given below throughout this Agreement.
(a) An "AFFILIATE" shall mean any entity which owns or
controls, is owned by or is under common ownership or control with, the
Company.
(b) "BASE ANNUAL SALARY" shall, as determined on the Termination
Date, be equal to the greater of:
i. the employee's annual salary excluding bonuses and special
incentive payments on the date of the earliest Change of Control to occur
during the Covered Period, or
ii. the employee's annual salary excluding bonuses and special
incentive payments on the Termination Date.
(c) "CHANGE IN DUTIES" shall mean any one or more of the
following:
i. a significant change in the nature or scope of the
Employee's authorities or duties from those applicable to him immediately prior
to the date on which a Change of Control occurs;
ii. a reduction in the Employee's Base Annual Salary from that
provided to him immediately prior to the date on which a Change of Control
occurs;
iii. a diminution in the Employee's eligibility to participate in
bonus, stock option, incentive award and other compensation plans which provide
opportunities to receive compensation from the greater of:
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--the opportunities provided by the Company (including its
subsidiaries) for executives with comparable duties; or
--the opportunities under any such plans under which he was
participating immediately prior to the date on which a Change of Control
occurs;
iv. a diminution in employee benefits (including but not
limited to medical, dental, life insurance and long-term disability plans) and
perquisites applicable to Employee, from the greater of:
--the employee benefits and perquisites provided by the Company,
(including its subsidiaries) to executives with comparable duties; or
--the employee benefits and perquisites to which he was entitled
immediately prior to the date on which a Change of Control occurs;
v. a change in the location of the Employee's principal place
of employment by the Company (including its subsidiaries) by, more than ten
miles from the location where he was principally employed immediately prior to
the date on which a Change of Control occurs; or
vi. a reasonable determination by the Board of Directors of the
Company that, as a result of a Change in Control and a change in circumstances
thereafter significantly affecting his position, he is unable to exercise the
authorities, powers, function or duties attached to his position immediately
prior to the date on which a Change of Control occurs.
(d) A "CHANGE OF CONTROL" shall be deemed to have occurred if:
i. any "person," including a "group" as determined in
accordance with the Section 13(d)(3) of the Securities Exchange Act of 1934
(the "Exchange Act"), is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 30 percent or more of the
combined voting power of the Company's then outstanding securities:
ii. as a result of, or in connection with, any tender offer or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Company before the
Transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company:
iii. the Company is merged or consolidated with another
corporation and as a result of the merger or consolidation less than 70 percent
of the outstanding voting securities of the surviving or resulting corporation
shall then be owned in the aggregate by the former stockholders of the Company,
other than (x) affiliates within the meaning of the Exchange Act of (y) any
party to the merger or consolidation;
iv. a tender offer or exchange offer is made and consummated
for the ownership of securities of the Company representing 30 percent or more
of the combined voting power of the Company's then outstanding voting
securities; or
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v. the Company transfers substantially all of its assets to
another corporation which is not a wholly-owned subsidiary of the Company.
(e) "COVERED PERIOD" for the Employee shall mean a period of
time following the occurrence of a Change of Control equal to the lesser of (i)
the Employee's period of employment with the Company, any subsidiary, or any
predecessor of either prior to that Change of Control, or (ii) two years
following the occurrence of the Change of Control.
(f) "INVOLUNTARY TERMINATION" shall mean any termination which:
i. does not result from a resignation by the Employee (other
than a resignation pursuant to clause ii of this subparagraph (f); or
ii. results from a resignation following any change in Duties;
provided, however, the term "Involuntary Termination" shall not include:
x. a Termination for Cause, or
y. any termination as a result of death, disability, or normal
retirement pursuant to a retirement plan to which the Employee was subject
prior to any Change of control.
(g) "SEVERANCE AMOUNT" is equal to 2.00 times the Employee's
Base Annual Salary in the case of an Involuntary Termination.
(h) "TERMINATION FOR CAUSE" shall mean only a termination as a
result of fraud, misappropriation of or intentional material damage to the
property or business of the Company (including its subsidiaries), or commission
of a felony by the Employee.
(i) "VOTING SECURITIES" shall mean any securities which
ordinarily possess the power to vote in the election of directors without the
happening of any pre-condition or contingency.
3. GOLDEN PARACHUTE PAYMENT REDUCTION. It is the intention of the
parties that the Severance Amount payments under this Agreement shall not
constitute "excess parachute payments" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended, and any regulations thereunder.
If the independent accountants acting as auditors for the Company on the date
of a Change of Control (or another accounting firm designated by them which
shall not include the auditors for any person or group acquiring the Company in
a Change of Control) determine that the Severance Amount payments under this
Agreement may constitute "excess parachute payments," the payments may be
reduced to the maximum amount which may be paid without the payments being
"excess parachute payments." The determination shall take into account (i)
whether the payments are "parachute payments: under Section 280G and, if so,
(ii) the amount of payments under this Agreement that constitutes reasonable
compensation under Section 280G. Nothing contained in this Agreement shall
prevent the Company after a Change of Control from agreeing to pay the Employee
compensation or benefits in excess of those provided in this Agreement.
4. MEDICAL AND DENTAL BENEFITS. If the Employee's employment by the
Company or any subsidiary or successor of the company shall be subject to an
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involuntary Termination within the Covered Period, then to the extent that the
Employee or any of the Employee's dependents may be covered under the terms of
any medical and dental plans of the Company (or any subsidiary) for active
employees immediately prior to the termination, the Company will provide the
Employee and those dependents with equivalent coverages (including the
availability of benefits in the same geographic localities and without
increasing Employee deductibles or co-payment requirements) for a period not to
exceed twenty-four months from the termination. The coverages may be procured
directly by the company (or any subsidiary, if appropriate) apart from, and
outside of the terms of the plans themselves; provided that the Employee and
the Employee's dependents comply with all of the conditions of the medical or
dental plans. In consideration for these benefits, the Employee must make
contributions equal to those required from time to time from employees for
equivalent coverages under the medical or dental plans.
5. NOTICES. Notices and all other communications under this
agreement shall be in writing and shall be deemed given when personally
delivered or when mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Company to:
CB Financial Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Chairman
If to the Employee to:
_____________________________________
_____________________________________
_____________________________________
or to such other address as either party may furnish to the other in writing,
except that notices of changes of address shall be effective only upon receipt.
6. APPLICABLE LAW. This contract is entered into under, and shall be
governed for all purposes by, the laws of the State of Michigan.
7. SEVERABILITY. If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement and all other
provisions shall remain in full force and effect.
8. WITHHOLDING OF TAXES. Company may withhold from any benefits payable
under this Agreement all Federal, state, city or other taxes as may be required
pursuant to any law, governing regulation or ruling.
9. NOT AN EMPLOYMENT AGREEMENT. Nothing in this agreement shall give the
Employee any rights (or impose any obligations) to continued employment by the
Company or any subsidiary or successor of the Company, nor shall it give the
Company
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any rights (or impose any obligations) for the continued performance of duties
by the Employee for the Company or any subsidiary or successor of the Company.
10. NO ASSIGNMENT. The Employee's right to receive payments or benefits
under this Agreement shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
will or by the laws of descent or distribution. In the event of any attempted
assignment or transfer contrary to this paragraph the Company shall have no
liability to pay any amount so attempted to be assigned or transferred. This
Agreement shall insure to the benefit of and be enforceable by the Employee's
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
11. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns (including, without
limitation, any company into or with which the Company may merge or
consolidate). The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets unless either (i) the
person or entity acquiring the assets or a substantial portion of the assets
shall expressly assume by an instrument in writing all duties and obligations
of the Company under this Agreement or (ii) the Company shall provide, through
the establishment of a separate reserve for the payment in full of all amounts
which are or may reasonably be expected to become payable to the Employee under
this Agreement.
12. TERM. This Agreement shall be effective as of the date first above
written and shall remain in effect for a period of five (5) years and continue
for successive two (2) year periods(s) thereafter unless the Company shall give
Employee written notice to the effect that it shall not be extended at least
thirty (30) days prior to the expiration of the initial or any extended term.
In the event of a Change of Control during the term of this Agreement, this
Agreement shall remain in effect for the Covered Period.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first written.
CB FINANCIAL CORPORATION
By________________________________
Xxxxx X. Xxxx
EMPLOYEE
___________________________________
Xxxxxx X. Xxxxx
