<PAGE> 1
Exhibit 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of June 1,
2000, by and between and among:
CNBC RETIREMENT SERVICES ("CRS"), an Ohio Corporation, with
its principal place of business at 100 E. Wilson Bridge Road,
Worthington, Ohio 43085;
CNBC BANCORP ("CNBC"), an Ohio corporation, with its principal
place of business at 100 E. Wilson Bridge Road, Worthington,
Ohio 43085; and
DENNIS D. PUPPEL ("Puppel"), residing at 5400 Victoria Park,
Columbus, Ohio 43235
WHEREAS, CRS and CNBC (collectively the "Company" unless the context
indicates one entity or the other) are engaged in the financial services
business, CRS has entered into an agreement to purchase the business assets of
The Puppel Companies, Inc, a business solely owned by Puppel and the services of
Puppel have been an invaluable factor contributing to the prior success enjoyed
by The Puppel Companies, Inc; and
WHEREAS, CRS wishes to retain the services, knowledge, and abilities of
Puppel as the President of CRS, and CRS also desires to prevent any other
competitive business from securing Puppel's services and utilizing his
experience, background and expertise; and
WHEREAS, Puppel is willing to join the employ of CRS and agrees to be
bound by the terms and conditions of this Agreement as hereinafter set forth;
and
WHEREAS, the Board of Directors of CRS and CNBC (the "Boards") have
determined that it is in the best interests of CRS and CNBC and their
shareholders to employ Puppel as President of CRS and that CRS and CNBC should
be bound by the terms and conditions of this Agreement, and Puppel desires to
serve in that capacity.
<PAGE> 2
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CONTRACT PERIOD.
CRS shall continue to employ Puppel, and Puppel shall serve CRS, on the
terms and conditions set forth in this Agreement, for the period commencing on
the date of this Agreement and ending on May 31, 2010 (the "Contract Period").
However, the Contract Period may be extended beyond May 31, 2010, by mutual
agreement of Puppel and Company, in which event the Contract Period shall end on
such date as agreed.
As consideration for the execution of this agreement, CRS will pay
Puppel a signing bonus of $50,000 on May 31, 2000. Additionally, Puppel shall
receive a grant of 500 incentive stock options to purchase shares of the common
stock of CNBC at the market price of CNBC stock on June 15, 2000 with an
expiration of 10 years and a five-year vesting schedule, vesting 20% per year.
2. POSITION AND DUTIES.
(a) During the Contract Period, Puppel shall be the President
and Director of CRS with such duties and responsibilities as are
assigned to him by the CRS Board consistent with his position. Puppel
shall, from time to time, and with the consent of the CRS Board, be
entitled to delegate with appropriate supervision the performance of
some of his duties and responsibilities to other management personnel
of CRS.
(b) During the Contract Period, and excluding any periods of
vacation and sick leave to which he is entitled, Puppel shall devote
his full attention and time during normal business hours to the
business and affairs of CRS and shall
-2-
<PAGE> 3
perform his services primarily at CRS'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 and efficiently. It shall not be considered
a violation of the foregoing for Puppel to (i) serve on corporate,
civic or charitable boards or committees, (ii) deliver lectures or
fulfill speaking engagements 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 CRS and do
not interfere with the performance of his responsibilities as the
President of CRS in accordance with this Agreement.
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY. For the remainder of the current
calendar year which expires on December 31, 2000, Puppel shall
receive an annual base salary, subject first to the limitation
provisions outlined in paragraph (b), ("Annual Base Salary")
of One Hundred and eighteen Thousand Dollars ($118,000),
payable in equal installments at intervals not less frequent
than monthly. For the calendar year commencing January 1,
2001, Puppel's base salary shall be $128,000. For the calendar
year commencing January 1, 2002, and for each subsequent
calendar year prior to the expiration of the Contract Period,
Puppel's then Annual Base Salary shall be established in an
amount that shall be determined by the CRS Board. Puppel's
Annual Base Salary may only be decreased as a result of the
limitation established in section (b) which follows.
-3-
<PAGE> 4
(b) LIMITATION ON ANNUAL BASE SALARY. In no event
shall Puppel's Annual Base Salary exceed the sum of 50% of the
gross revenues on account relationships of CRS that existed as
of June 1, 2000 plus 10% of the gross revenues on account
relationships acquired by CRS after June 1, 2000.
(c) BONUS. In addition to the Annual Base Salary,
Puppel 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 CNBC
Board. 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.
(d) OTHER BENEFITS. During the Contract Period: (i)
Puppel shall be eligible to participate in all savings and
retirement plans, practices, policies and programs of Company
to the same extent as the other officers of Company and (ii)
Puppel and/or Puppel's 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 Company (including, without limitation,
medical, prescription, dental, disability, employee group life
insurance, accidental death and travel accident insurance
plans and programs) to the same extent as the other officers
of Company.
(e) EXPENSES. During the Contract Period, Puppel
shall be entitled to receive reimbursement for all reasonable
expenses incurred by him in carrying out his duties under this
Agreement, provided that he complies with
-4-
<PAGE> 5
the policies, practices and procedures of CRS for submission
of expense reports, receipts, or similar documentation of such
expenses.
(f) VACATION. Puppel shall be entitled to four (4)
weeks of paid vacation during each full calendar year during
the Years 2000 and 2001. Commencing in calendar Year 2002,
Puppel shall be entitled to five (5) weeks of paid vacation.
(g) STOCK OPTIONS. Beginning in Year 2001, Puppel
shall be eligible to receive additional stock option grants
pursuant to the provisions of the CNBC Bancorp 1999 Stock
Option Plan.
(h) LIFE INSURANCE. In addition to any group life
insurance coverage provided to Puppel by CRS under Paragraph
(d) above, CRS will continue in force and will pay the
premiums for an individual life insurance policy on Puppel's
life in the face amount of Five Hundred Thousand Dollars
($500,000) or any replacement thereof. CRS will be the
beneficiary of $250,000 of the proceeds of the policy and
Puppel will have the right to designate the beneficiary for
the remaining $250,000 of the proceeds of this policy or any
replacement thereof.
4. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. Puppel's employment shall terminate
automatically upon his death during the Contract Period. Company shall
be entitled to terminate Puppel's employment during the Contract Period
due to his Disability. "Disability" means that Puppel has been unable,
for a period of either (A) 180 consecutive calendar days or (B) an
aggregate of 240 calendar days in a period of 365 consecutive calendar
days, to substantially perform his material
-5-
<PAGE> 6
duties under this Agreement, as a result of physical or mental illness
or injury. A termination of Puppel's employment by Company 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 Company electing to terminate Puppel's employment due
to his Disability, when he is receiving partial or full disability
income benefits from the Company provided group policy the Annual Base
Salary paid to him shall be reduced in order to give Company credit for
the partial or full disability income benefits being received by
Puppel.
(b) CAUSE. Company may terminate Puppel's employment during
the Contract Period "For Cause" or "Without Cause." "For Cause" means:
(i) The continued failure of Puppel to substantially
perform the duties and responsibilities of his position; or
(ii) Illegal conduct or gross misconduct by Puppel
that results in material and demonstrable damage to the
business or reputation of CNBC or CRS.
With regards to Section 4(b)(i), Company shall be required to
provide Puppel with written notification regarding those duties and
responsibilities, which it determines he has failed to substantially
perform. Company must cite specific objectives that it believes would
represent substantial performance and which must be met by Puppel.
Further, Company must provide Puppel with an appropriate and reasonable
time frame to accomplish that substantial performance. Only upon
Puppel's 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).
-6-
<PAGE> 7
Any act or failure to act by Puppel that is based upon
authority given him pursuant to a resolution duly adopted by the
Boards, or the advice of counsel for Company, shall be conclusively
presumed to be done, or omitted to be done, by Puppel in good faith and
in the best interests of Company, and shall not give rise to a
termination For Cause under this Paragraph. Company termination For
Cause shall be effective immediately unless Company states otherwise.
(iii) "Without Cause" shall be termination of Puppel's
employment during the Contract Period by the Boards for any reason
other than For Cause, Death or Disability.
(c) GOOD REASON.
(i) Puppel's employment may be terminated by him
during the Contract Period for "Good Reason" or "Without Good
Reason." "Good Reason" means:
A. The assignment to Puppel of any duties
inconsistent in any respect with Paragraph (a) of
Section 2 of this Agreement, or any other action by
Company 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 Company within a reasonable period of
time after receipt of written notice thereof from
Puppel; or
B. Any material breach of this Agreement by
Company, other than an isolated or an insubstantial
and inadvertent breach that is not taken in bad faith
and is remedied by Company within a reasonable period
of time after receipt of written notice thereof from
Puppel. A material breach shall include, but not be
limited to, a failure by Company to
-7-
<PAGE> 8
comply with any provision of Section 3 or Paragraph
(c) of Section 11 of this Agreement.
(ii) A termination of employment by Puppel for Good Reason
shall be communicated to Company by written notice ("Notice of
Termination for Good Reason") of the termination, setting
forth in reasonable detail the specific conduct of Company
that constitutes Good Reason and the specific provision(s) of
this Agreement on which Puppel relies. A termination of
employment by Puppel 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
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 Boards.
(iii) "Without Good Reason" shall be termination by Puppel of
his employment during the Contract Period for any reason other
than those cited under For Good Reason.
(d) 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.
(e) DATE OF TERMINATION. The "Date of Termination" means the
date of Puppel's death, the Disability Effective Date, or the date on
which the termination of Puppel's employment by Company or by Puppel is
effective, as the case may be.
-8-
<PAGE> 9
5. OBLIGATIONS OF COMPANY UPON TERMINATION.
(a) WITHOUT CAUSE: FOR GOOD REASON. If Puppel's employment is
terminated during the Contract Period either by Company Without Cause
as provided in Paragraph (b) of Section 4, or by Puppel for Good Reason
as provided in Paragraph (c) of Section 4, CRS shall pay the amounts
described in Subparagraph (i)(A) below to Puppel and shall continue to
pay his annual base salary until December 31, 2005. If the termination
occurs after June 30, 2004, CRS shall pay the amounts described in
Subparagraph (i) below to Puppel and shall continue to pay his Annual
Base Salary for a period of eighteen (18) months following the Date of
Termination. CRS shall continue the benefits described in Subparagraph
(ii)(B) below for the same period that he receives payments under this
paragraph following the Date of Termination.
(i) The amounts to be paid as described above are:
A. Puppel's 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 Puppel
(together with any accrued interest
or earnings thereon) that has not
yet been paid; and (3) any accrued
but unpaid vacation pay.
B. The benefits to be continued are
benefits to Puppel 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
Puppel's employment had continued
until the completion of the
payments of the amounts
-9-
<PAGE> 10
described above; provided,
however, that during any period
when Puppel is eligible to
receive such benefits under
another employer-provided plan,
the benefits provided by CRS
under this subparagraph may
cease. The foregoing
notwithstanding, if CRS is
unable to continue to provide
benefits to Puppel 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 CRS will pay to
Puppel and/or his family on a
monthly basis the cost of
providing medical, life and
disability insurance of
substantially equal coverage.
(b) FOR CAUSE; WITHOUT GOOD REASON. If Puppel's employment is
terminated during the Contract Period by Company For Cause as provided
in Paragraph (b) of Section 4, or by Puppel Without Good Reason as
provided in Paragraph (c)(i)(B)(iii) of Section 4, then he shall be
entitled to be paid the amounts described in Paragraph 5(a)(i)(A) only.
No salary continuation shall be paid.
6. Non-exclusivity of Rights.
Nothing in this Agreement shall prevent or limit Puppel's continuing or
future participation in any plan, program, policy or practice provided by
Company or any of its affiliated companies for which he may qualify, nor shall
anything in this Agreement limit or otherwise affect such rights as Puppel may
have under any contract or agreement with
-10-
<PAGE> 11
Company. Vested benefits and other amounts that Puppel is otherwise entitled to
receive under any plan, policy, practice or program of, or any contract or
agreement with Company 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.
Company'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, defense or other claim, right or action that
Company may have against Puppel or others. In no event shall Puppel be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to Puppel under any of the provisions of this Agreement and such
amounts shall not be reduced, regardless of whether Puppel obtains other
employment so long as such other employment does not conflict with the
obligations set forth in Section 9 below.
8. CONFIDENTIAL INFORMATION.
Puppel shall hold in a fiduciary capacity for the benefit of Company
all secret or confidential information, knowledge or data relating to Company or
any company affiliated therewith and their respective businesses that he obtains
during his employment by CRS and that is not public knowledge (other than as a
result of Puppel's violation of this Section 8) ("Confidential Information").
Puppel shall not communicate, divulge or disseminate Confidential Information at
any time during or after his employment with CRS, except with the prior written
consent of Company or as otherwise required by law or legal process.
-11-
<PAGE> 12
9. NONCOMPETITION; NONSOLICITATION.
(a) During the later of December 31, 2005 or twenty-four (24)
months following Puppel's termination date of employment with CRS (the
"Restriction Period"), Puppel 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 CRS, CNBC or any subsidiaries or affiliates of either
entity (collectively "CRS or any Affiliates") in any geographic area in
which CRS or any Affiliates 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
Puppel's employment is on account of Company 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 CRS (the
"Nonsolicitation Period"), Puppel 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 CRS is or was engaged in a
business relationship with CRS or any Affiliates to terminate its
relationship with CRS or any Affiliates 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
Puppel's employment is on account of Company exercising its right to
terminate his employment under Paragraph (a) of Section 4 in the event
of his Disability.
-12-
<PAGE> 13
(c) During the Nonsolicitation Period, Puppel will not, except
with the prior written consent of Company, directly or indirectly,
induce any employee of CRS or any Affiliates 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 CRS or any Affiliates 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, Puppel
shall return to Company all property of Company, 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) Puppel 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 8 and this Section 9 with respect to noncompetition,
nonsolicitation, confidentiality and Company property relate to
special, unique and extraordinary matters and that a violation of any
of the terms of such covenants and obligations will cause Company
irreparable injury for which adequate remedies are not available at
law. Therefore, Puppel agrees that Company 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
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 Company may have at law or in equity.
-13-
<PAGE> 14
10. SUCCESSORS.
(a) This Agreement is personal to Puppel and, without the
prior written consent of Company, 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 Puppel's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon Company and its successors and assigns.
(c) Company 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 Company expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that Company would
have been required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean both CNBC and CRS 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.
-14-
<PAGE> 15
(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 PUPPEL:
Dennis D. Puppel
5400 Victoria Park
Columbus, Ohio 43235
IF TO CNBC OR CRS:
CNCB Bancorp
100 East Wilson Bridge Road
Worthington, Ohio 43085
Attention: Chairman of the Board
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.
(d) Notwithstanding any other provision of this Agreement, CRS
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) Puppel's or Company'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 Puppel 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.
-15-
<PAGE> 16
IN WITNESS WHEREOF, Puppel has hereunto set his hand and, pursuant to the
authorization of their Board of Directors, CRS 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.
CNBC Retirement Services
By:
-----------------------------------
Thomas D. McAuliffe
Chairman of the Board
CNBC BANCORP
By:
-----------------------------------
Thomas D. McAuliffe
Chairman of the Board
Dennis D. Puppel, INDIVIDUAL
By:
-----------------------------------
Dennis D. Puppel
-16-
