UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
__X___ QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file numb 014612
For the Quarter EndeSeptember 30, 1998
WAYNE BANCORP, INC
(Exact name of registrant as specified in its charter)
OHIO 34-1516142
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
112 West Liberty Street
P.O. Box 757
Wooster, Ohio 44691 44691
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (330) 264-1222
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days:
Yes__X__ No_____
Number of shares of Common Stock, Stated Value $1.00 per Share, shares
outstanding at October 31, 1998, the latest practic 4,859,084
INDEX
WAYNE BANCORP, INC.
FORM 10-Q
For the Quarter Ended September 30, 1998
PART I. FINANCIAL INFORMATION PAGE NO.
Item I. Financial Statements (Unaudited)
Consolidated Balance Sheets................. 1
Consolidated Statements of Income
and Comprehensive Income........... 2
Consolidated Statements of Cash Flows....... 3
Notes to Consolidated Financial Statements.. 4,5
Item II. Management's discussion and analysis of financial
condition and results of operations.......... 6,7,8,9
Item III. Quantitative and Qualitative Disclosures about
Market Risk................................. 10
PART II. OTHER INFORMATION................................... 10
SIGNATURES..................................................... 11
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands of dollars) September 30, December 31,
1998 1997
------------------------
ASSETS
Cash and Due From Banks............................ $14,495 $23,306
Federal Funds Sold................................. 9,500 7,785
------------------------
Total Cash and Cash Equivalents. 23,995 31,091
Securities Available-for-Sale .................... 155,990 141,922
Loans ........................................... 316,286 324,442
Allowance for Loan Losses....... (4,883) (4,923)
------------------------
Net Loans....................... 311,403 319,519
Premises and Equipment............................. 8,799 8,923
Accrued interest receivable and other assets....... 8,002 6,926
------------------------
TOTAL ASSETS....................................... $508,189 $508,381
========================
LIABILITIES
Deposits
Interest Bearing.............................. $353,502 $347,898
Non-Interest Bearing.......................... 54,138 61,967
------------------------
Total Deposits.................. 407,640 409,865
Securities Sold Under Agreements to Repurchase..... 35,831 37,503
Other borrowings................................... 1,031 1,270
ESOP Loan.......................................... 600 0
Other Liabilities.................................. 4,116 3,933
------------------------
Total Liabilities............... 449,218 452,571
SHAREHOLDERS' EQUITY
Common Stock, Stated Value $1...................... 4,917 4,917
Shares Authorized 12,000,000 in 1998
5,400,000 in 1997
Shares outstanding - 4,850,546 in 1998
4,916,969 in 1997
Paid In Capital.................................... 12,980 13,021
Retained Earnings.................................. 41,193 37,347
Treasury Stock..................................... (1,779) (173)
Contra Equity - Unearned ESOP...................... (450) 0
Unrealized gain on Securities Available-for-Sale... 2,110 698
------------------------
Total Shareholders' Equity...... 58,971 55,810
------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY......... $508,189 $508,381
========================
See Notes to Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Nine Months Ended
(In thousands of dollars, September 30, September 30,
except per share data) 1998 1997 1998 1997
-----------------------------------------
INTEREST INCOME:
Interest and Fees on Loans............. $6,900 $7,010 $21,295 $20,268
Interest and Dividends on Securities:
Taxable........................... 1,916 1,661 5,368 5,255
Nontaxable........................ 352 376 1,133 1,157
Other Interest Income.................. 143 52 493 169
-----------------------------------------
Total Interest Income..... 9,311 9,099 28,289 26,849
INTEREST EXPENSE:
Interest on Deposits................... 3,690 3,510 11,072 10,314
Interest on Repurchase Agreements...... 423 382 1,188 1,094
Interest on Other Borrowed Funds....... 18 0 59 30
Interest on ESOP Loan.................. 23 0 23 0
-----------------------------------------
Total Interest Expense.. 4,154 3,892 12,342 11,438
NET INTEREST INCOME.................... 5,157 5,207 15,947 15,411
Provision for Loan Losses.............. 60 227 180 680
-----------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES..... 5,097 4,980 15,767 14,731
OTHER INCOME:
Service Charges on Deposits............ 446 409 1,285 1,251
Income from Fiduciary Activities....... 300 270 900 810
Other Non-Interest Income.............. 206 167 457 392
Gain (Loss) on Security Sales.......... 8 0 8 (8)
----------------------------------------
Total Other Income.. 960 846 2,650 2,445
OTHER EXPENSES:
Salaries and Employee Benefits......... 1,825 1,869 5,554 5,528
Occupancy and Equipment................ 468 423 1,365 1,260
Other Non-Interest Expenses............ 1,330 1,348 3,942 4,044
-----------------------------------------
Total Other Expenses... 3,623 3,640 10,861 10,832
INCOME BEFORE INCOME TAX EXPENSE....... 2,434 2,186 7,556 6,344
INCOME TAX EXPENSE..................... 624 740 2,106 2,121
-----------------------------------------
NET INCOME............................. 1,810 1,446 5,450 4,223
=========================================
Other Comprehensive Income, net of tax
Unrealized gains on available-for-sale
securities arising during the period 1,187 380 1,407 226
Reclassification adjustment for
amounts realized on securities
sales included in net income..... 5 0 5 (5)
-----------------------------------------
COMPREHENSIVE INCOME................... $3,002 $1,826 $6,862 $4,444
=========================================
NET INCOME PER SHARE $0.37 $0.30 $1.12 $0.87
DIVIDENDS PER SHARE $0.13 $0.08 $0.33 $0.26
See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended
(In thousands of dollars) September 30,
1998 1997
- ---------------------------------------------------------------------------
OPERATING ACTIVITIES
Net Income......................................... $5,450 $4,223
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses................... 180 680
Depreciation and amortization............... 758 1,219
Amortization of security premiums
and discounts............................. (151) (232)
Increase in interest receivable............. (331) (325)
Decrease in interest payable................ (209) (182)
Other, (net)................................ (781) (183)
------------------------
Net Cash Provided by Operating Activities.......... 4,916 5,200
INVESTING ACTIVITIES
Purchase of securities available-for-sale......... (50,634) (21,903)
Proceeds from matured securities available-for-sale 36,547 36,971
Proceeds from sale of securities available-for-sale 2,307 6,983
Net (increase) decrease in loans and leases........ (4,164) (28,619)
Proceeds from the sale of loans.................... 11,915 0
Purchase of premises and equipment................. (634) (581)
------------------------
Net cash provided by investing activities.......... (4,663) (7,149)
FINANCING ACTIVITIES
Net increase (decrease) in deposits................ (2,225) (2,101)
Net increase (decrease) in repurchase agreements
and other short term borrowings................. (1,911) 3,055
Cash dividends..................................... (1,607) (1,487)
(Increase) decrease in treasury stock.............. (1,606) 73
------------------------
Net cash (used) by financing activities............ (7,349) (460)
Increase (Decrease) in cash and cash equivalents... (7,096) (2,409)
Cash and cash equivalents at beginning of period... 31,091 28,369
------------------------
Cash and cash equivalents at end of period......... $23,995 $25,960
========================
Cash basis payments for federal income taxes....... $2,545 $2,149
Cash basis payments for interest expense........... $12,551 $11,620
See notes to consolidated financial statements.
WAYNE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting standards for complete financial
statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included and such adjustments
are of a normal recurring nature. Certain prior year amounts have been
reclassified to conform with current financial statement presentation.
The consolidated financial statements include the accounts of
Wayne Bancorp, Inc. (the Company), and its wholly-owned
subsidiaries Wayne County National Bank (Wayne) and the Chippewa
Valley Bank (Chippewa). The financial statements of Wayne
include the accounts of its wholly-owned subsidiary, Wayne
National Company. All significant intercompany transactions
have been eliminated.
On March 31, 1998, the Company acquired all of the outstanding
shares of Chippewa Valley Bancshares, Inc., parent company of
the Chippewa Valley Bank. Shareholders of Chippewa received
2.1916 shares of the Company's common stock for each share of
Chippewa stock owned. The transaction was accounted for as a
pooling of interests, where the historical carrying values of
Chippewa's assets were carried forward to the consolidated
financial statements, without change. All prior financial
information has been restated to conform to the current
financial statement presentation.
Under a new accounting standard adopted on January 1, 1998,
Statement of Financial Accounting Standards ("SFAS") No. 130,
"Reporting Comprehensive Income," comprehensive income is
reported for all periods. Comprehensive income includes both
net income and other comprehensive income. Other comprehensive
income includes the change in unrealized gains and losses on
securities available-for-sale.
2. Securities:
Securities are classified as available-for-sale. Available-for-sale
securities are those which may be sold by the Company if needed
for liquidity, asset-liability management, or other reasons. Securities
available-for-sale are reported at fair value, with unrealized gains or
losses included as a separate component of equity, net of tax.
Realized gains or losses are determined based on the amortized cost
of the specific security sold.
During the nine months ended September 30, 1998, proceeds from the sale
of securities available-for-sale were $2.31 million with gross realized gains
of $8 thousand in earnings. During the nine months ended September 30, 1997,
proceeds from the sale of securities available-for-sale were $6.98 million with
gross realized gains of $2 thousand and gross realized losses of $10 thousand
included in earnings.
Summary of Amortized Cost and Fair Values of Securities Available-for-sale:
September 30, 1998
Gross Gross
(In thousands of dollars) Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-----------------------------------------------
U.S. Treasury............... $25,557 $493 $0 $26,050
Federal Agency Obligations.. 37,847 868 0 38,715
Federal Agency Pools........ 23,126 383 (2) 23,507
Obligations of states and
political subdivisions.... 32,720 967 (2) 33,685
Corporate Obligations...... 30,872 359 (1) 31,230
Other securities............ 2,672 155 (24) 2,803
-----------------------------------------------
$152,794 $3,225 ($29) $155,990
===============================================
December 31, 1997
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-----------------------------------------------
U.S. Treasury............... $29,832 $205 ($9) $30,028
Federal Agency Obligations.. 28,657 173 (31) 28,799
Federal Agency Pools........ 27,533 176 (48) 27,661
Obligations of states and
political subdivisions.... 26,627 463 (10) 27,080
Corporate Obligations....... 25,888 23 (59) 25,852
Other securities............ 2,326 178 (2) 2,502
-----------------------------------------------
$140,863 $1,218 ($159) $141,922
===============================================
3. Loans:
Loans are comprised of the following:
September 30, December 31,
1998 1997
------------------------
Commercial loans....................... $121,792 $132,172
Real Estate loans...................... 129,220 125,186
Installment loans...................... 50,139 52,332
Lease Financing........................ 3,053 3,317
Home Equity loans...................... 11,507 10,651
Credit Card............................ 521 593
Other loans............................ 54 191
------------------------
Total............... $316,286 $324,442
========================
During the second quarter of 1998, the Company sold approximately $11.9 million
of 1-4 family residential real estate mortgage loans. Of this, approximately
$3.9 million were classified as held for sale at March 31, 1998. The remainder
was primarily made up of loans originated in the second quarter of 1998. There
were no loans classified as held for sale at December 31, 1997, or at
September 30, 1998.
4. Employee Stock Ownership Plan:
Wayne offers an Employee Stock Ownership Plan (ESOP) for the benefit of
substantially all its employees. The ESOP has received a favorable
determination letter from the Internal Revenue Service on the qualified status
of the ESOP under applicable provisions of the Internal Revenue Code.
In April, 1998, the ESOP borrowed funds from an unrelated financial institution
to acquire common shares of the Company. The loan is secured by the shares
purchased with the proceeds, and will be repaid by the ESOP with funds from
Wayne's discretionary contributions to the ESOP and earnings on the ESOP assets.
All dividends received on unallocated shares by the ESOP are used to pay debt
service. The loan is also guaranteed by Wayne. The shares purchased with the
loan proceeds are held in a suspense account for allocation among participants
as the loan is repaid. As payments are made and shares are released from the
suspense account, such shares will be validly issued, fully paid and
nonassessable. At September 30, 1998, the loan balance was $600,000, there
were no borrowed funds for the ESOP at December 31, 1997.
The Company accounts for its ESOP in accordance with Statement of Position (SOP)
93-6. Accordingly, shares pledged as collateral are reported as unearned ESOP
shares in the consolidated balance sheets. As shares are released from
collateral, the Company reports compensation expense equal to the current market
price of the shares, and shares become outstanding for earnings-per-share
computations. Dividends on allocated ESOP shares are recorded as a reduction of
retained earnings; dividends on unallocated ESOP shares are recorded as a
reduction of debt and accrued interest. ESOP compensation expense was $33
thousand and $81 thousand for the three and nine months ended September 30,
1998. There was no related expense for the same periods in 1997. The ESOP
shares as of September 30, 1998 and December 31, 1997 were as follows:
September 30, December 31,
1998 1997
Allocated Shares 136,373 132,492
Shares released for
allocation 3,410
Unreleased shares 10,227
-----------------------
Total ESOP shares 150,010 132,492
=======================
Fair value of unreleased $299,140 $0
=======================
5. Termination of Employment Agreements:
The Company and Wayne have entered into employment agreements
with certain officers of Wayne. The term of the agreements is ten years. The
employment agreements provide that in the event of a "change in control" of
the Company or Wayne, the officers would be entitled to benefits under the
agreement. These benefits for some officers are thirty-six monthly cash
payments, each equal to 8% of the sum of their respective compensation,
including bonuses, paid to the officer in the last whole calender year preceding
their termination of employment, and for other officers these benefits are
twenty-four monthly cash payments, each equal to 8% of the sum of their
respective compensation, including bonuses, paid to them, in the last whole
calendar year preceding their termination of employment.
The President of the Company, who also serves as the President of the
Chippewa Valley Bank is party to an employment agreement with the
Chippewa Valley Bank which is substantially the same as those described
above. The agreement provides for three years of salary and benefits in
the event his employment is terminated. This agreement is valid for thirty-six
months from the date of the change in control. This agreement will expire
on April 1, 2001.
6. Per Share Data:
Per share data is calculated based on 4,879,150 average common shares for
the three months ended September 30, 1998 and 4,892,755 average common shares
for the nine months ended September 30, 1998. The corresponding numbers for
the same periods in 1997 were 4,918,427 and 4,917,288. All per share data has
been adjusted to reflect stock splits and dividends where applicable.
ITEM II - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS:
The main objectives of asset/liability management are to
provide adequate liquidity and to minimize interest rate risk.
Liquidity is the ability to meet cash flow needs, which in the
banking industry, refers to the Company's ability to fund customer
borrowing needs as well as deposit withdrawals. The Company's
primary source of liquidity is the daily Federal Funds Sold and
Securities available-for-sale. In addition, other assets such as
Cash and Due From Banks and maturing loans also provide
additional sources of liquidity. At September 30, 1998, the amount of
Cash and due from banks and securities and loans with scheduled
maturities within the next three months was $123 million. The Company
continues to keep a balance between short and long-term
investments and securities that will provide adequate liquidity
and maximize earnings. Based on the Company's capital
position, profitability and reputation, the available liquidity
sources are considered adequate to meet the current and
projected needs of the Company.
Capital__
The Company's capital adequacy is a primary concern in our
industry, and is measured by several key ratios. A long standing
measure of capital adequacy is the percentage of shareholders'
equity to total assets. At September 30, 1998, the Company's
equity-to-asset ratio adjusted by the impact of FAS#115 was
11.2% compared to 10.8% at December 31, 1997. Regulators
of the banking industry focus primarily on two other measurements
of capital - the risk based capital ratio and the leverage ratio
The risk based capital ratio consists of a numerator of allowable
capital components and a denominator of an accumulation of
risk weighted assets. With a significant portion of the Company's
investment securities portfolio in government related low risk
categories and a fair amount of the loan portfolio in one to four
family mortgage loans with a 50% risk assessment, the risk
based capital ratio is 19.2% at September 30, 1998, and
18.6% at December 31, 1997.
The regulators require a minimum leverage capital ratio above
3%. They will expect most banks to maintain leverage ratios in
the 4-5% range. The leverage ratio is calculated as equity
capital less certain intangible assets divided by total assets less
the same intangible assets. At September 30, 1998, and December 31,
1997, the ratios were 11.4% and 10.6% respectively.
The Company's deposit insurance premiums which are paid to the
Federal Deposit Insurance Corporation are based on these capital
ratios. The FDIC considers a bank "adequately capitalized" if
the capital ratios are: Total equity 8% Tier 1 risk based
capital of 4% and a leverage ratio of 4%. The FDIC considers a
bank "well capitalized" with comparable capital ratios of 10%,
6% and 5%. The Company is considered "well capitalized",
and therefore is subject to the lowest deposit insurance
premiums available.
Management is not aware of any matters subsequent to September 30, 1998
that would cause the Company's capital category to change.
Financial_Condition__
The total assets of the Company decreased by $192 thousand or .04%
from December 31, 1997 to September 30, 1998. Net loans have decreased by $8.1
million for the first nine months of 1998 due to the payoff of two large
commercial loans in early February that amounted to over $11 million as well as
other loan payoffs in the Commercial and Agriculture portfolio's. In addition
to this, $11.9 million of 1-4 family real estate mortgage loans were sold in the
second quarter. The loan payoffs were not within management's control, as
competitive pressures from the "super-regional" banks offering loan interest
rates that are under the "prime" lending rate is beginning to effect the loan
totals. Management has no intention of beginning a "sub-prime" lending practice.
The mortgage lending area has experienced growth of $15.9 million in the
first nine months of 1998, offset by the sale of $11.9 million of loans in the
second quarter. This growth in the mortgage loan area is attributable to
favorable interest rates on these types of loans. The decision was made to sell
$11.9 million of mortgage loans in the second quarter as management felt that
the portfolio represented an increased amount of interest rate risk, as rates
are expected to increase over the next twenty-four months. The loan sale
resulted in a net loss of approximately $32 thousand.
Management expects interest rates to be volatile for the next twelve to
twenty-four months. Due to this, management may consider the sale of additional
mortgage loans if rates are favorable and conditions within the balance sheet
warrant a sale. There are no loans held for sale at September 30, 1998. It is
management's expectation that if loans are to be sold in the 4th quarter of
1998, that those loans would have been originated in the same time frame.
Total securities available-for-sale and fed funds sold increased by
$15.8 million through the third quarter of 1998. This increase is due mainly to
$11.9 million of mortgage loans which were sold in the second quarter and the
payoff in February of this year of over $11 million in two commercial loans, as
well as other loan payoffs in the Commercial and Agriculture portfolio's.
Management is keeping these funds in a short position within the portfolio to
fund future commercial loan growth.
Total deposits decreased by $2.2 million for the first nine months of
1998, however, the Company has begun to see an inflow of deposits during the
first part of the fourth quarter. Deposit growth is difficult in today's
financial markets due to the wide variety of higher yielding investment options
available to our customers, and this outflow, or disintermediation, is being
experienced throughout the banking industry. Management feels that as long as
these higher yielding options exist, such as the stock market, banks will have
continued problems attracting and retaining deposits. The Company does have
other sources of funds that will allow for the continued growth of the Company.
Results_of_Operations__
Net income was $5,450,000 for the first nine months of 1998 compared
to $4,223,000 for the same period in 1997. Earnings per share for the
nine months ended September 30, 1998 and 1997 were $1.12 and $.87 per
share respectively. Dividends were $.33 per share in the first nine months of
1998 and $.26 per share for the first nine months in 1997.
For the three months ended September 30, 1998, net income was $1,810,000 or $.37
per share with dividends paid of $.13 per share. This compares with net income
of $1,446,000 or $.30 per share and dividends of $.08 per share for the same
quarter ended September 30, 1997. All per share numbers have been adjusted
for the issuance of 981,837 shares for the merger of Chippewa Valley Bancshares.
Total interest and fee income for the first nine months increased
$1.4 million or 5.4% compared to the prior year. This increase is primarily
due to the increase in the average balance of earning assets.
Total earning assets were $481.8 and $456.1 million at September 30, 1998 and
September 30, 1997. The increase in earning assets is due primarily to the
growth in securities and federal funds sold of $26.5 million offset by a
reduction in the loan portfolio of $875 thousand. The weighted average interest
earned on those assets was 7.95% and 8.01% respectively.
Total interest bearing liabilities at September 30, 1998 and September 30, 1997
were $391.0 and $371.2 million respectively. The weighted interest rate paid
for these liabilities has increased from 4.17% at September 30, 1997 to 4.24% at
September 30, 1998.
The net effect of the changes in interest earning assets and interest paying
liabilities, combined with the repricing that has occurred since September 30,
1997 caused an increase in net interest income of $536 thousand, or 3.5%, for
the nine months ended September 30, 1998.
The provision for loan losses for the first nine months of 1998 was $180
thousand compared to $680 thousand for the same period in 1997. This decrease
is due to the reserve position at Chippewa Valley Bank being under where
management felt necessary in 1997. At the end of the third quarter of 1998,
that reserve is considered adequate and sufficient given the makeup of the
loan portfolio there.
Total other expenses increased by $29 thousand for the nine months ended
September 30, 1998 compared with the same period in 1997. Occupancy and
equipment expense increased by $105 thousand or 8.3% due primarily to technology
upgrades and the opening of a new office. Salaries and employee benefits
increased $26 thousand or .47% to $5,554,000 for the period ending September 30,
1998 compared to $5,528,000 for the same period in 1997. The increase is due to
normal annual merit increases. Additionally, the Company operates in a highly
competitive market for lower cost labor, and necessarily maintains base wages
higher in order to retain the current staff.
The other non-interest expenses declined $102 thousand for the first nine months
of 1998 as compared to the same period in 1997. The primary reasons for
the decline is a reduction in computer related expenses and data processing.
Year 2000 Issue (Y2K)
The Company's subsidiaries, Wayne and Chippewa are almost entirely dependent
on computer systems which process transactions relating to lending and deposit
functions. Wayne employs the services of a nationally recognized data processing
bureau specializing in data processing for financial institutions, While
Chippewa operates an in-house data processing center. In addition to its core
operating activities the Company also relies on off the shelf hardware and
software to conduct business relating to its normal operations.
The Company has inventoried all of its hardware and software relating to
computer operated and computer dependent systems, and the Company has completed
their assessment of the steps they will need to take to address Y2K problems.
The applications have been identified as either Mission Critical or Non-Mission
Critical, and timeframes have been established for testing these applications.
The Company has contacted the vendors that supply or sercvice the Company's
computer operated or computer dependent systems to obtain confirmation that each
system is either currently Y2K compliant or is expected to be Y2K compliant.
With respect to systems that cannot be confirmed as Y2K compliant the Company
will continue to work with the appropriate supplier or servicer to ensure all
such systems will be rendered compliant in a timely manner with minimal
expense to the Company or disruption to the Company's operations. A contingency
plan has been approved by the Board of Directors and Senior Management that is
currently being updated to comply with the guidelines issued by the Federal
Financial Institutions Council.
In addition to the possible expense related to its own systems, the Company
could incur losses if loan payments are delayed due to Y2K problems affecting
any of the Company's significant borrowers or impairing the payroll systems of
large employers in the Company's primary market area. Because the Company's
loan portfolio is highly diversified with regard to individual borrowers and
types of businesses, and the Company's primary market area is not significantly
dependent on a single employer or industry, the Company does not expect any
significant or prolonged Y2K related difficulties that will affect net earnings
or cash flow. At this time, the Company anticipates spending approximately
$250 thousand related to the Y2K issue, however additional unforseen expenses
may be incurred in connection with the Y2K issue.
ITEM III - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Asset and Liability Management and Market Risk
The Company's primary market risk exposure is interest rate risk
and, to a lesser extent, liquidity risk. The Company does not
maintain a trading account for any class of financial instruments
and the Company is not affected by foreign currency exchange
rate risk or commodity price risk. Because the Company does not
hold any equity securities other than stock in the FHLB of
Cincinnati and an insignificant investment in other equity
securities, the Company is not subject to equity price risk.
Interest rate risk is the risk that the Company's financial
condition will be adversely affected due to movements in
interest rates. The Company, like other financial institutions,
is subject to interest rate risk to the extent that its
interest-earning assets reprice differently than its
interest-bearing liabilities. The income of financial
institutions is primarily derived from the excess of interest
earned on interest-earning assets over the interest paid on
interest-bearing liabilities. One of the Company's principal
financial objectives is to achieve long-term profitability while
reducing its exposure to fluctuations in interest rates.
Accordingly, the Company places great importance on monitoring
and controlling interest rate risk.
There are several methods employed by the Company to monitor and
control interest rate risk. One such method is using a gap
analysis. The gap is defined as the repricing variance between
rate sensitive assets and rate sensitive liabilities within
certain periods. The repricing can occur due to changes in
rates on variable rate products as well as maturities of
interest-earning assets and interest-bearing liabilities. A
high ratio of interest sensitive liabilities, generally referred
to as a negative gap, tends to benefit net interest income
during periods of falling interest rates as the average rate
paid on interest-bearing liabilities declines faster than the
average rate earned on interest-earning assets. The opposite
holds true during periods of rising interest rates. The Company
attempts to minimize the interest rate risk through management
of the gap in order to achieve consistent shareholder return.
The Company's Asset and Liability Management Policy is to
maintain a fairly neutral gap position of -10% to +10% in both
the short- and long-term periods. At September 30, 1998, the
Company had a gap position of -3.70% of total assets for a one
year period. Another strategy used by the Company is to
originate variable rate loans tied to market indices. Such
loans reprice on an annual, quarterly, monthly or daily basis as
the underlying market index changes. Currently, approximately
28%, of the Company's loan portfolio reprices on at least
an annual basis. The Company also invests excess funds in
liquid federal funds that mature and reprice on a daily basis.
The Company also maintains all of its securities in the
available-for-sale portfolio to take advantage of interest rate
fluctuations and to maintain liquidity for loan funding and deposit
withdrawals.
The Company's 1997 annual report details a table which provides
information about the Company's financial instruments that are
sensitive to changes in interest rates as of December 31, 1997.
The table is based on information and assumptions set forth in
the notes. The Company believes the assumptions utilized are
reasonable. For loans, securities and liabilities with
contractual maturities, the table represents principal cash
flows and the weighted average interest rate. For variable rate
loans the contractual maturity and weighted-average interest
rate was used with an explanatory footnote as to repricing
periods. For liabilities without contractual maturities such as
demand and savings deposit accounts, a decay rate was utilized
to match their most likely withdrawal behavior. Management
believes that no events have occurred since December 31, 1997
which would significantly change the ratio of rate sensitive
assets to rate sensitive liabilities for the given time horizons.
WAYNE BANCORP, INC.
PART II - OTHER INFORMATION
_____________________________________________________________
ITEM 1 - Legal Proceedings:
NONE
ITEM 2 - Changes in securities:
NONE
ITEM 3 - Defaults upon senior securities:
NONE
ITEM 4 - Submission of matters to a vote of securities holders:
(a) None
(d) None
ITEM 5 - Other information:
NONE
ITEM 6 - Exhibits and reports on Form 8-K:
NONE
______________________SIGNATURES______________________________
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized:
___Wayne_Bancorp,_Inc.__
(Registrant)
Date ____November _12,_1998____ ____________________________
David L. Christopher,
Chairman & CEO
Date ____November_12,_1998____ ____________________________
David P. Boyle, CPA
Treasurer
<TABLE> <S> <C>
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<NAME> WAYNE BANCORP, INC. - OHIO
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
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</TABLE>
CHANGE OF CONTROL AGREEMENT
This is an Agreement (the "Agreement") made by and between
Wayne Bancorp, Inc. ("Company") and F. Bill Damron
("Executive").
RECITALS
Company is a bank holding company whose principal subsidiary is
engaged in the business of banking and businesses incidental
thereto.
Executive possesses unique skills, knowledge and experience
relating to the business of the Company.
Company desires to recognize the past and future services of
Executive, and, in that connection, Executive desires to be
assured that, in the event of a change in the control of Company,
Executive will be provided with an adequate severance payment
for termination without cause or as compensation for Executive's
Severance because of a material change in his duties and
functions.
Company desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or
not a potential change of control is in the best interest of Company
and its shareholders.
Company desires to induce Executive to remain in the employee
of the Company following a change of control to provide for
continuity of management.
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants expressed in this Agreement, the parties hereto
make the following agreement, intending to be legally bound thereby:
Section 1 - Definitions.
Exchange Act - "Exchange Act" means The Securities Exchange
Act of 1934.
Change in Control - "Change in Control" shall result if:
Any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or
Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or
During any period of 24 consecutive months, individuals who at
the beginning of such period constitute the Board of Directors
(including for this purpose any new director whose election or
nomination for election by the company's stockholders was
approved by a vote of a least two-thirds of the directors then still
in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the
Board of Directors.
Notwithstanding the foregoing, no Trust Department or designated
fiduciary or other trustee of such Trust Department of the Company
or a subsidiary of the Company, or other similar fiduciary capacity
of the Company with direct voting control of the stock shall be
included or considered. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the corporation or any
of its subsidiaries, and no Trustee of any such plan in its capacity
as such Trustee, shall be included or considered.
Code - "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Company - "Company" shall include The Wayne County National
Bank of Wooster and any members of its Affiliated Group, over
which Executive has managerial control, as that term is defined
in Section 1504 of the Code, and shall include any predecessor
corporations of the Company and its Affiliated Group.
Board - "Board" shall mean the Board of Directors of Company.
Section 2 - Term of Agreement.
This Agreement shall be effective from the date of this Agreement
to until the Agreement Termination Date, which is the earliest of:
The tenth anniversary of the date of this Agreement;
The date this Agreement is mutually rescinded;
The date prior to a Change in Control on which the Executive's
employment with the Company is terminated by death, retirement,
disability, resignation, or dismissal for any reason;
The date Executive is terminated for Good Cause (as hereinafter
defined in Section 2C) after a Change in Control;
The date which is five (5) years after a Change in Control.
The date which Company, The Wayne County National Bank of
Wooster, or any other member of its Affiliated Group, and over
which Executive has managerial control, which is a depository
institution which is insured by an agency for any state or the
United States Federal Government:
becomes insolvent: or has appointed any conservator or receiver;
or is determined by an appropriate federal banking agency to be in
a troubled condition, as defined in the applicable law and
regulations governing the appropriate federal banking agency; or
is assigned a composite rating of 4 or 5 by the appropriate federal
banking agency or is informed in writing by the Federal Deposit
Insurance Corporation that it is rated a 4 or 5 under the Uniform
Financial Institution's Rating System of the Federal Financial
Institutions Examination Council; or has initiated against it by the
Federal Deposit Insurance Corporation a proceeding to terminate
or suspend deposit insurance; or
reasonably determines in good faith and with due care that the
payments called for under this Agreement, or the obligations and
promises assumed and made under this Agreement have become
proscribed under applicable law or regulations. Provided, however,
if such law or regulations apply prospectively only, or for some other
reason do not apply to this Agreement, then this Agreement shall
not be deemed by Company to be proscribed under this
Subsection (f).
This Agreement shall not change, alter or amend any rights which
either Company or Executive may have in respect of the termination
of the employment of Executive by Company prior to a Change in
Control. Nothing contained in this Agreement shall be construed
to create any additional right or obligation of Executive to be
employed by Company. If the employment of Executive by
Company is terminated by Company or by Executive, for any
reason whatsoever, prior to a Change in Control, Executive and
Company shall have only such rights and obligations in
respect of such termination as either of them would have had
if this Agreement had not been effected.
For purposes of this Agreement, the employment of Executive by
Company shall be deemed to have been terminated for good
cause only if such employment is terminated by Company by
reason of Executive's; (i) dishonest conduct materially detrimental
to Company; (ii) fraud with respect to the business or affairs of the
Company; (iii) conviction of a felony; (iv) alcohol or illegal drug
abuse; or (v) willful or material violation of any of the obligations
imposed upon Executive under this Agreement, any employment
contract between the Executive and the Company and any material
Company policy.
Section 3 - Reduction in Compensation Proscribed After a
Change in Control.
During the term of this Agreement as defined by Section 2 and after
the date of a Change in Control, Executive shall receive as
compensation, while still employed by Company, a salary at a rate
no less than that in effect as of the change in Control, and
shall in addition, be entitled to receive a bonus equal to at least
the average of the last three years bonuses paid. In addition,
during such period, the Company shall pay and provide for Executive
at no cost to Executive, all of his then-current fringe benefits,
including but not limited to health, disability, dental, life insurance
club memberships, etc., all of which shall be at levels and amounts
no less favorable than levels and amounts I n effect as of the Change
of Control.
Section 4 - Payment Upon Termination of Employment After a
Change in Control.
If during the term of this Agreement as defined by Section 2 and
after the date of a Change of Control, Executive is discharged
without good cause or Executive resigns because he has made
a reasonable, objective determination, in good faith and with due
care, that
Executive has been demoted;
The Company has materially reduced the compensation of
Executive;
The Company has altered Executive's principal place of
employment away from a location which would be greater than
thirty (30) miles from where Executive's place of employment
existed at the time of alteration, or
Company has materially reduced Executive's job title, status or
responsibility;
only then Company shall pay to Executive the benefits as provided
for in Subsection C below.
If Executive is discharged by Company other than for good cause
and there is a Change of Control within two years of the discharge
and during the term of this Agreement, then Company shall pay
to Executive the benefits as provided for in Subsection C below.
If Executive is entitled to benefits under Subsection A or
Subsection B above, then during the benefit period, Company
shall continue at no cost to Executive, Executive's coverage in
Company's health, disability, dental, life insurance and club
memberships at the same levels that had been provided
immediately prior to his termination of employment, and shall
also pay Executive a monthly payment in cash in the amount
defined in Subsection D below, without interest. The first monthly
cash payment shall be paid at the end of the first month
commencing after the Executive's termination of employment in
the case of a benefit entitlement under Subsection A above, and
at the end of the first month commencing after the Change of
Control in the case of a benefit entitlement under Subsection
B above, and payments shall continue each consecutive month
thereafter until 36 payments have been made, or until the
benefit period has ended, if earlier. The benefit period shall
commence on the date of termination of the Executive's
employment or the date of the Change of Control, as the case
may be and shall end on the earlier of:
The last day of the 36th consecutive whole month thereafter, or
The termination date of this Agreement as defined in Section 2(A).
In the event Executive dies after benefits have commenced but before
the end of the benefit period, then the remaining payments shall be
paid to the person or persons as stated in the last designation of
beneficiary concerning this Agreement signed by Executive and filed
with Company, and if not, then to the personal representative of
Executive.
The amount of the monthly cash benefit shall be 8% of the sum of
employee compensation (including bonuses) paid by Company to
Executive in the last whole calendar year preceding Executive's
termination of employment, as determined by the Company for
federal income tax purposes and reported to Executive and
Internal Revenue Service ("IRS"). Provided however, if the
monthly payments required under this Agreement in such amount
together with the other benefits provided for hereunder would be
deemed by the IRS to result in an "Excess Parachute Payment,"
as that term is defined in Section 280G of the Code, then the
amount of such monthly cash payments shall be reduced to the
highest amount which will not result in the total of all benefits
provided for hereunder being deemed by the IRS to result
in an "Excess Parachute Payment," as that term is defined in
Section 280G of the Code, rounded down to the nearest even
+$10 MULTIPLE.
Section 5 - Pension Payments.
Nothing in this Agreement shall change any pension benefits or
benefits from other qualified plans maintained by Company to
which Executive is otherwise entitled. However, payments made
under this Agreement pursuant to Section 4 shall not be considered
compensation for purposes of the Company's pension plan or any
other qualified retirement plan maintained by the Company.
Section 6 - Right to Other Benefits.
Nothing in this Agreement shall abridge, eliminate, or cause
Executive to lose Executive's right or entitlement to any other
Company benefit to which Executive may be entitled due to his
status as an employee under any plan or policy of Company on
such terms and conditions as are required of any employee under
any plan or policy of Company. Further, nothing in this Agreement
shall create in Executive any greater rights or entitlements, except
as specified in this Agreement. The plans and policies referred to
in this Section 6 include, but are not limited to, life insurance plan
dental, disability or health insurance benefits, severance policies,
club memberships, and accrued vacation pay.
Section 7 - Protection of Business.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement:
Executive will not at any time (during or after employment with
Company) divulge, disclose, reveal or communicate to any person,
firm corporation, partnership, joint venture or other entity, directly
or indirectly, any trade secrets or other information which
Executive may have obtained during the course of his
employment by Company in respect of any matters affecting or
relating to the banking business of Company including, without
limitation, any of its plan, policies, business practices, finances,
methods of operation or other information known to Executive
to be historically considered by Company to be confidential
information.
In addition to any action for damages, the restrictions on
competition and other restrictions imposed upon Executive under
this Section 7 of this Agreement may be enforced by Company by
an action for an injunction, it being agreed that (in view of the
general practical difficulty of determining by computation or legal
proof the exact amount of damages, if any, resulting to Company
from a violation by Executive of the provisions of this Section 7)
that there would be no adequate remedy at law for any breach by
Executive of any such restriction.]
The obligations imposed upon Executive by the Section 7 shall
survive the termination of this Agreement pursuant to Section 2
hereof.
Section 8 - Arbitration.
The parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this
Agreement in accordance with the Rules of the American Arbitration
Association, before one arbitrator mutually agreeable to the parties
hereto. If after two weeks Executive determines that Company and
Executive have been unable to agree upon one arbitrator, then
Executive may appoint one arbitrator and require Company to
appoint a second arbitrator. Whereupon, the two appointed
arbitrators shall appoint a third arbitrator mutually agreeable to
them. Company and Executive shall be mutually and equally
responsible for the costs and expenses associated with
arbitration. The arbitration shall occur in Wooster, Ohio,
or such other place as mutually agreed upon.
Section 9 - Notices and Payments
All payments required or permitted to be made under the
provisions of this Agreement, and all notices and other
communications required or permitted to be given or delivered
under this Agreement to Company or to Executive, which
notices or communications must be in writing, shall be
deemed to have been given if delivered by hand, or mailed
by first-class mail, addressed as follows:
If to Company:
Wayne Bancorp, Inc.
112 West Liberty Street
Wooster, Ohio 44691
Attention: Chairman of the Board of Directors
If to Executive:
F. Bill Damron
2335 Graustark Path
Wooster, Ohio 44691
Company or Executive may, by notice given to the other from
time to time and at any time, designate a different address for
making payments required to be made, and for the giving of
notices or other communications required or permitted to be
given, to the party designating such new address.
Section 10 - Payroll Taxes.
Any payment required or permitted to be made or given to Executive
under this Agreement shall be subject to the withholding and other
requirements of applicable laws, and to the deduction requirements
of any benefit plan maintained by Company in which Executive is
a participant, and to all reporting, filing and other requirements in
respect of such payments, and Company shall use it best efforts
promptly to satisfy all such requirements.
Section 11 - Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio and the parties hereto consent
to the jurisdiction of the Courts of the State of Ohio and Wayne
County and the Federal District Courts in and for Wayne County
in connection with this Agreement.
Section 12 - Duplicate Originals.
This Agreement may be executed in one or more counter parts,
each of which shall be deemed to be a duplicate original, but all
of which, taken together, shall constitute a single instrument.
Section 13 - Captions.
The captions contained in this Agreement are included only for
Convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretations, construction or meaning and
are in no way to be construed as a part of this Agreement.
Section 14 - Severability.
If any provision of this Agreement or the application of any provision
to any person or any circumstances shall be determined to be
invalid or unenforceable, such provision or portion thereof shall
nevertheless be effective and enforceable to the extent determined
reasonable. Such determination shall not affect any other provision
of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain
in full force and effect, and it I s the intention of company and
Executive that if any provision of this Agreement is susceptible
of two or more constructions, one of which would render the
provision unenforceable, then the provisions shall have the
meaning which renders it enforceable.
Section 15 - Number and Gender.
When used in this Agreement, the number and gender of each
pronoun shall be construed to be such number and gender as
the context, circumstances or its antecedent may require.
Section 16 - Successor and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns (including successive, as well as
immediate, successors and assigns) of Company; provided,
however, that Company may not assign this Agreement or any of
its rights or obligations hereunder to any party other than a
corporation which succeeds to substantially all of the business
and assets of Company by merger, consolidation, sale of assets
or otherwise. This Agreement shall inure to the benefit of and be
binding upon the successor and assigns (including successive,
as well as immediate, successors and assigns) of Executive;
provided, however, that the right of Executive under this
Agreement may be assigned only to his personal
representative or trustee or by will or pursuant to
applicable laws of descent and distribution.
In WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on and to be effective on
October 7, 1998.
In the Presence of:
/s/ F. Bill Damron
Executive
In the Presence of:
/s/David L. Christopher
Wayne Bancorp, Inc.
CHANGE OF CONTROL AGREEMENT
This is an Agreement (the "Agreement") made by and between
Wayne Bancorp, Inc. ("Company") and David P. Boyle ("Executive").
RECITALS
Company is a bank holding company whose principal subsidiary is
engaged in the business of banking and businesses incidental
thereto.
Executive possesses unique skills, knowledge and experience
relating to the business of the Company.
Company desires to recognize the past and future services of
Executive, and, in that connection, Executive desires to be
assured that, in the event of a change in the control of Company,
Executive will be provided with an adequate severance payment
for termination without cause or as compensation for Executive's
Severance because of a material change in his duties and
functions.
Company desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or
not a potential change of control is in the best interest of Company
and its shareholders.
Company desires to induce Executive to remain in the employee
of the Company following a change of control to provide for
continuity of management.
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants expressed in this Agreement, the parties hereto
make the following agreement, intending to be legally bound thereby:
Section 1 - Definitions.
Exchange Act - "Exchange Act" means The Securities Exchange
Act of 1934.
Change in Control - "Change in Control" shall result if:
Any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or
Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or
During any period of 24 consecutive months, individuals who at
the beginning of such period constitute the Board of Directors
(including for this purpose any new director whose election or
nomination for election by the company's stockholders was
approved by a vote of a least two-thirds of the directors then still
in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the
Board of Directors.
Notwithstanding the foregoing, no Trust Department or designated
fiduciary or other trustee of such Trust Department of the Company
or a subsidiary of the Company, or other similar fiduciary capacity
of the Company with direct voting control of the stock shall be
included or considered. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the corporation or any
of its subsidiaries, and no Trustee of any such plan in its capacity
as such Trustee, shall be included or considered.
Code - "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Company - "Company" shall include The Wayne County National
Bank of Wooster and any members of its Affiliated Group, over
which Executive has managerial control, as that term is defined
in Section 1504 of the Code, and shall include any predecessor
corporations of the Company and its Affiliated Group.
Board - "Board" shall mean the Board of Directors of Company.
Section 2 - Term of Agreement.
This Agreement shall be effective from the date of this Agreement
to until the Agreement Termination Date, which is the earliest of:
The tenth anniversary of the date of this Agreement;
The date this Agreement is mutually rescinded;
The date prior to a Change in Control on which the Executive's
employment with the Company is terminated by death, retirement,
disability, resignation, or dismissal for any reason;
The date Executive is terminated for Good Cause (as hereinafter
defined in Section 2C) after a Change in Control;
The date which is five (5) years after a Change in Control.
The date which Company, The Wayne County National Bank of
Wooster, or any other member of its Affiliated Group, and over
which Executive has managerial control, which is a depository
institution which is insured by an agency for any state or the
United States Federal Government:
becomes insolvent: or has appointed any conservator or receiver;
or is determined by an appropriate federal banking agency to be in
a troubled condition, as defined in the applicable law and
regulations governing the appropriate federal banking agency; or
is assigned a composite rating of 4 or 5 by the appropriate federal
banking agency or is informed in writing by the Federal Deposit
Insurance Corporation that it is rated a 4 or 5 under the Uniform
Financial Institution's Rating System of the Federal Financial
Institutions Examination Council; or has initiated against it by the
Federal Deposit Insurance Corporation a proceeding to terminate
or suspend deposit insurance; or
reasonably determines in good faith and with due care that the
payments called for under this Agreement, or the obligations and
promises assumed and made under this Agreement have become
proscribed under applicable law or regulations. Provided, however,
if such law or regulations apply prospectively only, or for some other
reason do not apply to this Agreement, then this Agreement shall
not be deemed by Company to be proscribed under this
Subsection (f).
This Agreement shall not change, alter or amend any rights which
either Company or Executive may have in respect of the termination
of the employment of Executive by Company prior to a Change in
Control. Nothing contained in this Agreement shall be construed
to create any additional right or obligation of Executive to be
employed by Company. If the employment of Executive by
Company is terminated by Company or by Executive, for any
reason whatsoever, prior to a Change in Control, Executive and
Company shall have only such rights and obligations in
respect of such termination as either of them would have had
if this Agreement had not been effected.
For purposes of this Agreement, the employment of Executive by
Company shall be deemed to have been terminated for good
cause only if such employment is terminated by Company by
reason of Executive's; (i) dishonest conduct materially detrimental
to Company; (ii) fraud with respect to the business or affairs of the
Company; (iii) conviction of a felony; (iv) alcohol or illegal drug
abuse; or (v) willful or material violation of any of the obligations
imposed upon Executive under this Agreement, any employment
contract between the Executive and the Company and any material
Company policy.
Section 3 - Reduction in Compensation Proscribed After a
Change in Control.
During the term of this Agreement as defined by Section 2 and after
the date of a Change in Control, Executive shall receive as
compensation, while still employed by Company, a salary at a rate
no less than that in effect as of the change in Control, and
shall in addition, be entitled to receive a bonus equal to at least
the average of the last three years bonuses paid. In addition,
during such period, the Company shall pay and provide for Executive
at no cost to Executive, all of his then-current fringe benefits,
including but not limited to health, disability, dental, life insurance
club memberships, etc., all of which shall be at levels and amounts
no less favorable than levels and amounts I n effect as of the Change
of Control.
Section 4 - Payment Upon Termination of Employment After a
Change in Control.
If during the term of this Agreement as defined by Section 2 and
after the date of a Change of Control, Executive is discharged
without good cause or Executive resigns because he has made
a reasonable, objective determination, in good faith and with due
care, that
Executive has been demoted;
The Company has materially reduced the compensation of
Executive;
The Company has altered Executive's principal place of
employment away from a location which would be greater than
thirty (30) miles from where Executive's place of employment
existed at the time of alteration, or
Company has materially reduced Executive's job title, status or
responsibility;
only then Company shall pay to Executive the benefits as provided
for in Subsection C below.
If Executive is discharged by Company other than for good cause
and there is a Change of Control within two years of the discharge
and during the term of this Agreement, then Company shall pay
to Executive the benefits as provided for in Subsection C below.
If Executive is entitled to benefits under Subsection A or
Subsection B above, then during the benefit period, Company
shall continue at no cost to Executive, Executive's coverage in
Company's health, disability, dental, life insurance and club
memberships at the same levels that had been provided
immediately prior to his termination of employment, and shall
also pay Executive a monthly payment in cash in the amount
defined in Subsection D below, without interest. The first monthly
cash payment shall be paid at the end of the first month
commencing after the Executive's termination of employment in
the case of a benefit entitlement under Subsection A above, and
at the end of the first month commencing after the Change of
Control in the case of a benefit entitlement under Subsection
B above, and payments shall continue each consecutive month
thereafter until 36 payments have been made, or until the
benefit period has ended, if earlier. The benefit period shall
commence on the date of termination of the Executive's
employment or the date of the Change of Control, as the case
may be and shall end on the earlier of:
The last day of the 36th consecutive whole month thereafter, or
The termination date of this Agreement as defined in Section 2(A).
In the event Executive dies after benefits have commenced but before
the end of the benefit period, then the remaining payments shall be
paid to the person or persons as stated in the last designation of
beneficiary concerning this Agreement signed by Executive and filed
with Company, and if not, then to the personal representative of
Executive.
The amount of the monthly cash benefit shall be 8% of the sum of
employee compensation (including bonuses) paid by Company to
Executive in the last whole calendar year preceding Executive's
termination of employment, as determined by the Company for
federal income tax purposes and reported to Executive and
Internal Revenue Service ("IRS"). Provided however, if the
monthly payments required under this Agreement in such amount
together with the other benefits provided for hereunder would be
deemed by the IRS to result in an "Excess Parachute Payment,"
as that term is defined in Section 280G of the Code, then the
amount of such monthly cash payments shall be reduced to the
highest amount which will not result in the total of all benefits
provided for hereunder being deemed by the IRS to result
in an "Excess Parachute Payment," as that term is defined in
Section 280G of the Code, rounded down to the nearest even
+$10 MULTIPLE.
Section 5 - Pension Payments.
Nothing in this Agreement shall change any pension benefits or
benefits from other qualified plans maintained by Company to
which Executive is otherwise entitled. However, payments made
under this Agreement pursuant to Section 4 shall not be considered
compensation for purposes of the Company's pension plan or any
other qualified retirement plan maintained by the Company.
Section 6 - Right to Other Benefits.
Nothing in this Agreement shall abridge, eliminate, or cause
Executive to lose Executive's right or entitlement to any other
Company benefit to which Executive may be entitled due to his
status as an employee under any plan or policy of Company on
such terms and conditions as are required of any employee under
any plan or policy of Company. Further, nothing in this Agreement
shall create in Executive any greater rights or entitlements, except
as specified in this Agreement. The plans and policies referred to
in this Section 6 include, but are not limited to, life insurance plan
dental, disability or health insurance benefits, severance policies,
club memberships, and accrued vacation pay.
Section 7 - Protection of Business.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement:
Executive will not at any time (during or after employment with
Company) divulge, disclose, reveal or communicate to any person,
firm corporation, partnership, joint venture or other entity, directly
or indirectly, any trade secrets or other information which
Executive may have obtained during the course of his
employment by Company in respect of any matters affecting or
relating to the banking business of Company including, without
limitation, any of its plan, policies, business practices, finances,
methods of operation or other information known to Executive
to be historically considered by Company to be confidential
information.
In addition to any action for damages, the restrictions on
competition and other restrictions imposed upon Executive under
this Section 7 of this Agreement may be enforced by Company by
an action for an injunction, it being agreed that (in view of the
general practical difficulty of determining by computation or legal
proof the exact amount of damages, if any, resulting to Company
from a violation by Executive of the provisions of this Section 7)
that there would be no adequate remedy at law for any breach by
Executive of any such restriction.]
The obligations imposed upon Executive by the Section 7 shall
survive the termination of this Agreement pursuant to Section 2
hereof.
Section 8 - Arbitration.
The parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this
Agreement in accordance with the Rules of the American Arbitration
Association, before one arbitrator mutually agreeable to the parties
hereto. If after two weeks Executive determines that Company and
Executive have been unable to agree upon one arbitrator, then
Executive may appoint one arbitrator and require Company to
appoint a second arbitrator. Whereupon, the two appointed
arbitrators shall appoint a third arbitrator mutually agreeable to
them. Company and Executive shall be mutually and equally
responsible for the costs and expenses associated with
arbitration. The arbitration shall occur in Wooster, Ohio,
or such other place as mutually agreed upon.
Section 9 - Notices and Payments
All payments required or permitted to be made under the
provisions of this Agreement, and all notices and other
communications required or permitted to be given or delivered
under this Agreement to Company or to Executive, which
notices or communications must be in writing, shall be
deemed to have been given if delivered by hand, or mailed
by first-class mail, addressed as follows:
If to Company:
Wayne Bancorp, Inc.
112 West Liberty Street
Wooster, Ohio 44691
Attention: Chairman of the Board of Directors
If to Executive:
David P. Boyle
5151 Columbus Road
Wooster, Ohio 44691
Company or Executive may, by notice given to the other from
time to time and at any time, designate a different address for
making payments required to be made, and for the giving of
notices or other communications required or permitted to be
given, to the party designating such new address.
Section 10 - Payroll Taxes.
Any payment required or permitted to be made or given to Executive
under this Agreement shall be subject to the withholding and other
requirements of applicable laws, and to the deduction requirements
of any benefit plan maintained by Company in which Executive is
a participant, and to all reporting, filing and other requirements in
respect of such payments, and Company shall use it best efforts
promptly to satisfy all such requirements.
Section 11 - Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio and the parties hereto consent
to the jurisdiction of the Courts of the State of Ohio and Wayne
County and the Federal District Courts in and for Wayne County
in connection with this Agreement.
Section 12 - Duplicate Originals.
This Agreement may be executed in one or more counter parts,
each of which shall be deemed to be a duplicate original, but all
of which, taken together, shall constitute a single instrument.
Section 13 - Captions.
The captions contained in this Agreement are included only for
Convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretations, construction or meaning and
are in no way to be construed as a part of this Agreement.
Section 14 - Severability.
If any provision of this Agreement or the application of any provision
to any person or any circumstances shall be determined to be
invalid or unenforceable, such provision or portion thereof shall
nevertheless be effective and enforceable to the extent determined
reasonable. Such determination shall not affect any other provision
of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain
in full force and effect, and it I s the intention of company and
Executive that if any provision of this Agreement is susceptible
of two or more constructions, one of which would render the
provision unenforceable, then the provisions shall have the
meaning which renders it enforceable.
Section 15 - Number and Gender.
When used in this Agreement, the number and gender of each
pronoun shall be construed to be such number and gender as
the context, circumstances or its antecedent may require.
Section 16 - Successor and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns (including successive, as well as
immediate, successors and assigns) of Company; provided,
however, that Company may not assign this Agreement or any of
its rights or obligations hereunder to any party other than a
corporation which succeeds to substantially all of the business
and assets of Company by merger, consolidation, sale of assets
or otherwise. This Agreement shall inure to the benefit of and be
binding upon the successor and assigns (including successive,
as well as immediate, successors and assigns) of Executive;
provided, however, that the right of Executive under this
Agreement may be assigned only to his personal
representative or trustee or by will or pursuant to
applicable laws of descent and distribution.
In WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on and to be effective on
October 7, 1998.
In the Presence of:
/s/ David P. Boyle
Executive
In the Presence of:
/s/ David. L. Christopher
Wayne Bancorp, Inc.
CHANGE OF CONTROL AGREEMENT
This is an Agreement (the "Agreement") made by and between
Wayne Bancorp, Inc. ("Company") and David L. Christopher
("Executive").
RECITALS
Company is a bank holding company whose principal subsidiary is
engaged in the business of banking and businesses incidental
thereto.
Executive possesses unique skills, knowledge and experience
relating to the business of the Company.
Company desires to recognize the past and future services of
Executive, and, in that connection, Executive desires to be
assured that, in the event of a change in the control of Company,
Executive will be provided with an adequate severance payment
for termination without cause or as compensation for Executive's
Severance because of a material change in his duties and
functions.
Company desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or
not a potential change of control is in the best interest of Company
and its shareholders.
Company desires to induce Executive to remain in the employee
of the Company following a change of control to provide for
continuity of management.
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants expressed in this Agreement, the parties hereto
make the following agreement, intending to be legally bound thereby:
Section 1 - Definitions.
Exchange Act - "Exchange Act" means The Securities Exchange
Act of 1934.
Change in Control - "Change in Control" shall result if:
Any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or
Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or
During any period of 24 consecutive months, individuals who at
the beginning of such period constitute the Board of Directors
(including for this purpose any new director whose election or
nomination for election by the company's stockholders was
approved by a vote of a least two-thirds of the directors then still
in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the
Board of Directors.
Notwithstanding the foregoing, no Trust Department or designated
fiduciary or other trustee of such Trust Department of the Company
or a subsidiary of the Company, or other similar fiduciary capacity
of the Company with direct voting control of the stock shall be
included or considered. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the corporation or any
of its subsidiaries, and no Trustee of any such plan in its capacity
as such Trustee, shall be included or considered.
Code - "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Company - "Company" shall include The Wayne County National
Bank of Wooster and any members of its Affiliated Group, over
which Executive has managerial control, as that term is defined
in Section 1504 of the Code, and shall include any predecessor
corporations of the Company and its Affiliated Group.
Board - "Board" shall mean the Board of Directors of Company.
Section 2 - Term of Agreement.
This Agreement shall be effective from the date of this Agreement
to until the Agreement Termination Date, which is the earliest of:
The tenth anniversary of the date of this Agreement;
The date this Agreement is mutually rescinded;
The date prior to a Change in Control on which the Executive's
employment with the Company is terminated by death, retirement,
disability, resignation, or dismissal for any reason;
The date Executive is terminated for Good Cause (as hereinafter
defined in Section 2C) after a Change in Control;
The date which is five (5) years after a Change in Control.
The date which Company, The Wayne County National Bank of
Wooster, or any other member of its Affiliated Group, and over
which Executive has managerial control, which is a depository
institution which is insured by an agency for any state or the
United States Federal Government:
becomes insolvent: or has appointed any conservator or receiver;
or is determined by an appropriate federal banking agency to be in
a troubled condition, as defined in the applicable law and
regulations governing the appropriate federal banking agency; or
is assigned a composite rating of 4 or 5 by the appropriate federal
banking agency or is informed in writing by the Federal Deposit
Insurance Corporation that it is rated a 4 or 5 under the Uniform
Financial Institution's Rating System of the Federal Financial
Institutions Examination Council; or has initiated against it by the
Federal Deposit Insurance Corporation a proceeding to terminate
or suspend deposit insurance; or
reasonably determines in good faith and with due care that the
payments called for under this Agreement, or the obligations and
promises assumed and made under this Agreement have become
proscribed under applicable law or regulations. Provided, however,
if such law or regulations apply prospectively only, or for some other
reason do not apply to this Agreement, then this Agreement shall
not be deemed by Company to be proscribed under this
Subsection (f).
This Agreement shall not change, alter or amend any rights which
either Company or Executive may have in respect of the termination
of the employment of Executive by Company prior to a Change in
Control. Nothing contained in this Agreement shall be construed
to create any additional right or obligation of Executive to be
employed by Company. If the employment of Executive by
Company is terminated by Company or by Executive, for any
reason whatsoever, prior to a Change in Control, Executive and
Company shall have only such rights and obligations in
respect of such termination as either of them would have had
if this Agreement had not been effected.
For purposes of this Agreement, the employment of Executive by
Company shall be deemed to have been terminated for good
cause only if such employment is terminated by Company by
reason of Executive's; (i) dishonest conduct materially detrimental
to Company; (ii) fraud with respect to the business or affairs of the
Company; (iii) conviction of a felony; (iv) alcohol or illegal drug
abuse; or (v) willful or material violation of any of the obligations
imposed upon Executive under this Agreement, any employment
contract between the Executive and the Company and any material
Company policy.
Section 3 - Reduction in Compensation Proscribed After a
Change in Control.
During the term of this Agreement as defined by Section 2 and after
the date of a Change in Control, Executive shall receive as
compensation, while still employed by Company, a salary at a rate
no less than that in effect as of the change in Control, and
shall in addition, be entitled to receive a bonus equal to at least
the average of the last three years bonuses paid. In addition,
during such period, the Company shall pay and provide for Executive
at no cost to Executive, all of his then-current fringe benefits,
including but not limited to health, disability, dental, life insurance
club memberships, etc., all of which shall be at levels and amounts
no less favorable than levels and amounts I n effect as of the Change
of Control.
Section 4 - Payment Upon Termination of Employment After a
Change in Control.
If during the term of this Agreement as defined by Section 2 and
after the date of a Change of Control, Executive is discharged
without good cause or Executive resigns because he has made
a reasonable, objective determination, in good faith and with due
care, that
Executive has been demoted;
The Company has materially reduced the compensation of
Executive;
The Company has altered Executive's principal place of
employment away from a location which would be greater than
thirty (30) miles from where Executive's place of employment
existed at the time of alteration, or
Company has materially reduced Executive's job title, status or
responsibility;
only then Company shall pay to Executive the benefits as provided
for in Subsection C below.
If Executive is discharged by Company other than for good cause
and there is a Change of Control within two years of the discharge
and during the term of this Agreement, then Company shall pay
to Executive the benefits as provided for in Subsection C below.
If Executive is entitled to benefits under Subsection A or
Subsection B above, then during the benefit period, Company
shall continue at no cost to Executive, Executive's coverage in
Company's health, disability, dental, life insurance and club
memberships at the same levels that had been provided
immediately prior to his termination of employment, and shall
also pay Executive a monthly payment in cash in the amount
defined in Subsection D below, without interest. The first monthly
cash payment shall be paid at the end of the first month
commencing after the Executive's termination of employment in
the case of a benefit entitlement under Subsection A above, and
at the end of the first month commencing after the Change of
Control in the case of a benefit entitlement under Subsection
B above, and payments shall continue each consecutive month
thereafter until 36 payments have been made, or until the
benefit period has ended, if earlier. The benefit period shall
commence on the date of termination of the Executive's
employment or the date of the Change of Control, as the case
may be and shall end on the earlier of:
The last day of the 36th consecutive whole month thereafter, or
The termination date of this Agreement as defined in Section 2(A).
In the event Executive dies after benefits have commenced but before
the end of the benefit period, then the remaining payments shall be
paid to the person or persons as stated in the last designation of
beneficiary concerning this Agreement signed by Executive and filed
with Company, and if not, then to the personal representative of
Executive.
The amount of the monthly cash benefit shall be 8% of the sum of
employee compensation (including bonuses) paid by Company to
Executive in the last whole calendar year preceding Executive's
termination of employment, as determined by the Company for
federal income tax purposes and reported to Executive and
Internal Revenue Service ("IRS"). Provided however, if the
monthly payments required under this Agreement in such amount
together with the other benefits provided for hereunder would be
deemed by the IRS to result in an "Excess Parachute Payment,"
as that term is defined in Section 280G of the Code, then the
amount of such monthly cash payments shall be reduced to the
highest amount which will not result in the total of all benefits
provided for hereunder being deemed by the IRS to result
in an "Excess Parachute Payment," as that term is defined in
Section 280G of the Code, rounded down to the nearest even
+$10 MULTIPLE.
Section 5 - Pension Payments.
Nothing in this Agreement shall change any pension benefits or
benefits from other qualified plans maintained by Company to
which Executive is otherwise entitled. However, payments made
under this Agreement pursuant to Section 4 shall not be considered
compensation for purposes of the Company's pension plan or any
other qualified retirement plan maintained by the Company.
Section 6 - Right to Other Benefits.
Nothing in this Agreement shall abridge, eliminate, or cause
Executive to lose Executive's right or entitlement to any other
Company benefit to which Executive may be entitled due to his
status as an employee under any plan or policy of Company on
such terms and conditions as are required of any employee under
any plan or policy of Company. Further, nothing in this Agreement
shall create in Executive any greater rights or entitlements, except
as specified in this Agreement. The plans and policies referred to
in this Section 6 include, but are not limited to, life insurance plan
dental, disability or health insurance benefits, severance policies,
club memberships, and accrued vacation pay.
Section 7 - Protection of Business.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement:
Executive will not at any time (during or after employment with
Company) divulge, disclose, reveal or communicate to any person,
firm corporation, partnership, joint venture or other entity, directly
or indirectly, any trade secrets or other information which
Executive may have obtained during the course of his
employment by Company in respect of any matters affecting or
relating to the banking business of Company including, without
limitation, any of its plan, policies, business practices, finances,
methods of operation or other information known to Executive
to be historically considered by Company to be confidential
information.
In addition to any action for damages, the restrictions on
competition and other restrictions imposed upon Executive under
this Section 7 of this Agreement may be enforced by Company by
an action for an injunction, it being agreed that (in view of the
general practical difficulty of determining by computation or legal
proof the exact amount of damages, if any, resulting to Company
from a violation by Executive of the provisions of this Section 7)
that there would be no adequate remedy at law for any breach by
Executive of any such restriction.]
The obligations imposed upon Executive by the Section 7 shall
survive the termination of this Agreement pursuant to Section 2
hereof.
Section 8 - Arbitration.
The parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this
Agreement in accordance with the Rules of the American Arbitration
Association, before one arbitrator mutually agreeable to the parties
hereto. If after two weeks Executive determines that Company and
Executive have been unable to agree upon one arbitrator, then
Executive may appoint one arbitrator and require Company to
appoint a second arbitrator. Whereupon, the two appointed
arbitrators shall appoint a third arbitrator mutually agreeable to
them. Company and Executive shall be mutually and equally
responsible for the costs and expenses associated with
arbitration. The arbitration shall occur in Wooster, Ohio,
or such other place as mutually agreed upon.
Section 9 - Notices and Payments
All payments required or permitted to be made under the
provisions of this Agreement, and all notices and other
communications required or permitted to be given or delivered
under this Agreement to Company or to Executive, which
notices or communications must be in writing, shall be
deemed to have been given if delivered by hand, or mailed
by first-class mail, addressed as follows:
If to Company:
Wayne Bancorp, Inc.
112 West Liberty Street
Wooster, Ohio 44691
Attention: Chairman of the Board of Directors
If to Executive:
David L. Christopher
1118 Quinby Ave.
Wooster, Ohio 44691
Company or Executive may, by notice given to the other from
time to time and at any time, designate a different address for
making payments required to be made, and for the giving of
notices or other communications required or permitted to be
given, to the party designating such new address.
Section 10 - Payroll Taxes.
Any payment required or permitted to be made or given to Executive
under this Agreement shall be subject to the withholding and other
requirements of applicable laws, and to the deduction requirements
of any benefit plan maintained by Company in which Executive is
a participant, and to all reporting, filing and other requirements in
respect of such payments, and Company shall use it best efforts
promptly to satisfy all such requirements.
Section 11 - Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio and the parties hereto consent
to the jurisdiction of the Courts of the State of Ohio and Wayne
County and the Federal District Courts in and for Wayne County
in connection with this Agreement.
Section 12 - Duplicate Originals.
This Agreement may be executed in one or more counter parts,
each of which shall be deemed to be a duplicate original, but all
of which, taken together, shall constitute a single instrument.
Section 13 - Captions.
The captions contained in this Agreement are included only for
Convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretations, construction or meaning and
are in no way to be construed as a part of this Agreement.
Section 14 - Severability.
If any provision of this Agreement or the application of any provision
to any person or any circumstances shall be determined to be
invalid or unenforceable, such provision or portion thereof shall
nevertheless be effective and enforceable to the extent determined
reasonable. Such determination shall not affect any other provision
of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain
in full force and effect, and it I s the intention of company and
Executive that if any provision of this Agreement is susceptible
of two or more constructions, one of which would render the
provision unenforceable, then the provisions shall have the
meaning which renders it enforceable.
Section 15 - Number and Gender.
When used in this Agreement, the number and gender of each
pronoun shall be construed to be such number and gender as
the context, circumstances or its antecedent may require.
Section 16 - Successor and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns (including successive, as well as
immediate, successors and assigns) of Company; provided,
however, that Company may not assign this Agreement or any of
its rights or obligations hereunder to any party other than a
corporation which succeeds to substantially all of the business
and assets of Company by merger, consolidation, sale of assets
or otherwise. This Agreement shall inure to the benefit of and be
binding upon the successor and assigns (including successive,
as well as immediate, successors and assigns) of Executive;
provided, however, that the right of Executive under this
Agreement may be assigned only to his personal
representative or trustee or by will or pursuant to
applicable laws of descent and distribution.
In WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on and to be effective on
October 7, 1998.
In the Presence of:
/s/ David L. Christopher
Executive
In the Presence of:
/s/John C. Johnston, III
Wayne Bancorp, Inc.
CHANGE OF CONTROL AGREEMENT
This is an Agreement (the "Agreement") made by and between
Wayne Bancorp, Inc. ("Company") and James Gumpp
("Executive").
RECITALS
Company is a bank holding company whose principal subsidiary is
engaged in the business of banking and businesses incidental
thereto.
Executive possesses unique skills, knowledge and experience
relating to the business of the Company.
Company desires to recognize the past and future services of
Executive, and, in that connection, Executive desires to be
assured that, in the event of a change in the control of Company,
Executive will be provided with an adequate severance payment
for termination without cause or as compensation for Executive's
Severance because of a material change in his duties and
functions.
Company desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or
not a potential change of control is in the best interest of Company
and its shareholders.
Company desires to induce Executive to remain in the employee
of the Company following a change of control to provide for
continuity of management.
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants expressed in this Agreement, the parties hereto
make the following agreement, intending to be legally bound thereby:
Section 1 - Definitions.
Exchange Act - "Exchange Act" means The Securities Exchange
Act of 1934.
Change in Control - "Change in Control" shall result if:
Any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or
Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or
During any period of 24 consecutive months, individuals who at
the beginning of such period constitute the Board of Directors
(including for this purpose any new director whose election or
nomination for election by the company's stockholders was
approved by a vote of a least two-thirds of the directors then still
in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the
Board of Directors.
Notwithstanding the foregoing, no Trust Department or designated
fiduciary or other trustee of such Trust Department of the Company
or a subsidiary of the Company, or other similar fiduciary capacity
of the Company with direct voting control of the stock shall be
included or considered. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the corporation or any
of its subsidiaries, and no Trustee of any such plan in its capacity
as such Trustee, shall be included or considered.
Code - "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Company - "Company" shall include The Wayne County National
Bank of Wooster and any members of its Affiliated Group, over
which Executive has managerial control, as that term is defined
in Section 1504 of the Code, and shall include any predecessor
corporations of the Company and its Affiliated Group.
Board - "Board" shall mean the Board of Directors of Company.
Section 2 - Term of Agreement.
This Agreement shall be effective from the date of this Agreement
to until the Agreement Termination Date, which is the earliest of:
The tenth anniversary of the date of this Agreement;
The date this Agreement is mutually rescinded;
The date prior to a Change in Control on which the Executive's
employment with the Company is terminated by death, retirement,
disability, resignation, or dismissal for any reason;
The date Executive is terminated for Good Cause (as hereinafter
defined in Section 2C) after a Change in Control;
The date which is five (5) years after a Change in Control.
The date which Company, The Wayne County National Bank of
Wooster, or any other member of its Affiliated Group, and over
which Executive has managerial control, which is a depository
institution which is insured by an agency for any state or the
United States Federal Government:
becomes insolvent: or has appointed any conservator or receiver;
or is determined by an appropriate federal banking agency to be in
a troubled condition, as defined in the applicable law and
regulations governing the appropriate federal banking agency; or
is assigned a composite rating of 4 or 5 by the appropriate federal
banking agency or is informed in writing by the Federal Deposit
Insurance Corporation that it is rated a 4 or 5 under the Uniform
Financial Institution's Rating System of the Federal Financial
Institutions Examination Council; or has initiated against it by the
Federal Deposit Insurance Corporation a proceeding to terminate
or suspend deposit insurance; or
reasonably determines in good faith and with due care that the
payments called for under this Agreement, or the obligations and
promises assumed and made under this Agreement have become
proscribed under applicable law or regulations. Provided, however,
if such law or regulations apply prospectively only, or for some other
reason do not apply to this Agreement, then this Agreement shall
not be deemed by Company to be proscribed under this
Subsection (f).
This Agreement shall not change, alter or amend any rights which
either Company or Executive may have in respect of the termination
of the employment of Executive by Company prior to a Change in
Control. Nothing contained in this Agreement shall be construed
to create any additional right or obligation of Executive to be
employed by Company. If the employment of Executive by
Company is terminated by Company or by Executive, for any
reason whatsoever, prior to a Change in Control, Executive and
Company shall have only such rights and obligations in
respect of such termination as either of them would have had
if this Agreement had not been effected.
For purposes of this Agreement, the employment of Executive by
Company shall be deemed to have been terminated for good
cause only if such employment is terminated by Company by
reason of Executive's; (i) dishonest conduct materially detrimental
to Company; (ii) fraud with respect to the business or affairs of the
Company; (iii) conviction of a felony; (iv) alcohol or illegal drug
abuse; or (v) willful or material violation of any of the obligations
imposed upon Executive under this Agreement, any employment
contract between the Executive and the Company and any material
Company policy.
Section 3 - Reduction in Compensation Proscribed After a
Change in Control.
During the term of this Agreement as defined by Section 2 and after
the date of a Change in Control, Executive shall receive as
compensation, while still employed by Company, a salary at a rate
no less than that in effect as of the change in Control, and
shall in addition, be entitled to receive a bonus equal to at least
the average of the last three years bonuses paid. In addition,
during such period, the Company shall pay and provide for Executive
at no cost to Executive, all of his then-current fringe benefits,
including but not limited to health, disability, dental, life insurance
club memberships, etc., all of which shall be at levels and amounts
no less favorable than levels and amounts I n effect as of the Change
of Control.
Section 4 - Payment Upon Termination of Employment After a
Change in Control.
If during the term of this Agreement as defined by Section 2 and
after the date of a Change of Control, Executive is discharged
without good cause or Executive resigns because he has made
a reasonable, objective determination, in good faith and with due
care, that
Executive has been demoted;
The Company has materially reduced the compensation of
Executive;
The Company has altered Executive's principal place of
employment away from a location which would be greater than
thirty (30) miles from where Executive's place of employment
existed at the time of alteration, or
Company has materially reduced Executive's job title, status or
responsibility;
only then Company shall pay to Executive the benefits as provided
for in Subsection C below.
If Executive is discharged by Company other than for good cause
and there is a Change of Control within two years of the discharge
and during the term of this Agreement, then Company shall pay
to Executive the benefits as provided for in Subsection C below.
If Executive is entitled to benefits under Subsection A or
Subsection B above, then during the benefit period, Company
shall continue at no cost to Executive, Executive's coverage in
Company's health, disability, dental, life insurance and club
memberships at the same levels that had been provided
immediately prior to his termination of employment, and shall
also pay Executive a monthly payment in cash in the amount
defined in Subsection D below, without interest. The first monthly
cash payment shall be paid at the end of the first month
commencing after the Executive's termination of employment in
the case of a benefit entitlement under Subsection A above, and
at the end of the first month commencing after the Change of
Control in the case of a benefit entitlement under Subsection
B above, and payments shall continue each consecutive month
thereafter until 24 payments have been made, or until the
benefit period has ended, if earlier. The benefit period shall
commence on the date of termination of the Executive's
employment or the date of the Change of Control, as the case
may be and shall end on the earlier of:
The last day of the 24th consecutive whole month thereafter, or
The termination date of this Agreement as defined in Section 2(A).
In the event Executive dies after benefits have commenced but before
the end of the benefit period, then the remaining payments shall be
paid to the person or persons as stated in the last designation of
beneficiary concerning this Agreement signed by Executive and filed
with Company, and if not, then to the personal representative of
Executive.
The amount of the monthly cash benefit shall be 8% of the sum of
employee compensation (including bonuses) paid by Company to
Executive in the last whole calendar year preceding Executive's
termination of employment, as determined by the Company for
federal income tax purposes and reported to Executive and
Internal Revenue Service ("IRS"). Provided however, if the
monthly payments required under this Agreement in such amount
together with the other benefits provided for hereunder would be
deemed by the IRS to result in an "Excess Parachute Payment,"
as that term is defined in Section 280G of the Code, then the
amount of such monthly cash payments shall be reduced to the
highest amount which will not result in the total of all benefits
provided for hereunder being deemed by the IRS to result
in an "Excess Parachute Payment," as that term is defined in
Section 280G of the Code, rounded down to the nearest even
+$10 MULTIPLE.
Section 5 - Pension Payments.
Nothing in this Agreement shall change any pension benefits or
benefits from other qualified plans maintained by Company to
which Executive is otherwise entitled. However, payments made
under this Agreement pursuant to Section 4 shall not be considered
compensation for purposes of the Company's pension plan or any
other qualified retirement plan maintained by the Company.
Section 6 - Right to Other Benefits.
Nothing in this Agreement shall abridge, eliminate, or cause
Executive to lose Executive's right or entitlement to any other
Company benefit to which Executive may be entitled due to his
status as an employee under any plan or policy of Company on
such terms and conditions as are required of any employee under
any plan or policy of Company. Further, nothing in this Agreement
shall create in Executive any greater rights or entitlements, except
as specified in this Agreement. The plans and policies referred to
in this Section 6 include, but are not limited to, life insurance plan
dental, disability or health insurance benefits, severance policies,
club memberships, and accrued vacation pay.
Section 7 - Protection of Business.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement:
Executive will not at any time (during or after employment with
Company) divulge, disclose, reveal or communicate to any person,
firm corporation, partnership, joint venture or other entity, directly
or indirectly, any trade secrets or other information which
Executive may have obtained during the course of his
employment by Company in respect of any matters affecting or
relating to the banking business of Company including, without
limitation, any of its plan, policies, business practices, finances,
methods of operation or other information known to Executive
to be historically considered by Company to be confidential
information.
In addition to any action for damages, the restrictions on
competition and other restrictions imposed upon Executive under
this Section 7 of this Agreement may be enforced by Company by
an action for an injunction, it being agreed that (in view of the
general practical difficulty of determining by computation or legal
proof the exact amount of damages, if any, resulting to Company
from a violation by Executive of the provisions of this Section 7)
that there would be no adequate remedy at law for any breach by
Executive of any such restriction.]
The obligations imposed upon Executive by the Section 7 shall
survive the termination of this Agreement pursuant to Section 2
hereof.
Section 8 - Arbitration.
The parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this
Agreement in accordance with the Rules of the American Arbitration
Association, before one arbitrator mutually agreeable to the parties
hereto. If after two weeks Executive determines that Company and
Executive have been unable to agree upon one arbitrator, then
Executive may appoint one arbitrator and require Company to
appoint a second arbitrator. Whereupon, the two appointed
arbitrators shall appoint a third arbitrator mutually agreeable to
them. Company and Executive shall be mutually and equally
responsible for the costs and expenses associated with
arbitration. The arbitration shall occur in Wooster, Ohio,
or such other place as mutually agreed upon.
Section 9 - Notices and Payments
All payments required or permitted to be made under the
provisions of this Agreement, and all notices and other
communications required or permitted to be given or delivered
under this Agreement to Company or to Executive, which
notices or communications must be in writing, shall be
deemed to have been given if delivered by hand, or mailed
by first-class mail, addressed as follows:
If to Company:
Wayne Bancorp, Inc.
112 West Liberty Street
Wooster, Ohio 44691
Attention: Chairman of the Board of Directors
If to Executive:
James Gumpp
390 Starbrook N W
Massillon, OH 44647
Company or Executive may, by notice given to the other from
time to time and at any time, designate a different address for
making payments required to be made, and for the giving of
notices or other communications required or permitted to be
given, to the party designating such new address.
Section 10 - Payroll Taxes.
Any payment required or permitted to be made or given to Executive
under this Agreement shall be subject to the withholding and other
requirements of applicable laws, and to the deduction requirements
of any benefit plan maintained by Company in which Executive is
a participant, and to all reporting, filing and other requirements in
respect of such payments, and Company shall use it best efforts
promptly to satisfy all such requirements.
Section 11 - Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio and the parties hereto consent
to the jurisdiction of the Courts of the State of Ohio and Wayne
County and the Federal District Courts in and for Wayne County
in connection with this Agreement.
Section 12 - Duplicate Originals.
This Agreement may be executed in one or more counter parts,
each of which shall be deemed to be a duplicate original, but all
of which, taken together, shall constitute a single instrument.
Section 13 - Captions.
The captions contained in this Agreement are included only for
Convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretations, construction or meaning and
are in no way to be construed as a part of this Agreement.
Section 14 - Severability.
If any provision of this Agreement or the application of any provision
to any person or any circumstances shall be determined to be
invalid or unenforceable, such provision or portion thereof shall
nevertheless be effective and enforceable to the extent determined
reasonable. Such determination shall not affect any other provision
of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain
in full force and effect, and it I s the intention of company and
Executive that if any provision of this Agreement is susceptible
of two or more constructions, one of which would render the
provision unenforceable, then the provisions shall have the
meaning which renders it enforceable.
Section 15 - Number and Gender.
When used in this Agreement, the number and gender of each
pronoun shall be construed to be such number and gender as
the context, circumstances or its antecedent may require.
Section 16 - Successor and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns (including successive, as well as
immediate, successors and assigns) of Company; provided,
however, that Company may not assign this Agreement or any of
its rights or obligations hereunder to any party other than a
corporation which succeeds to substantially all of the business
and assets of Company by merger, consolidation, sale of assets
or otherwise. This Agreement shall inure to the benefit of and be
binding upon the successor and assigns (including successive,
as well as immediate, successors and assigns) of Executive;
provided, however, that the right of Executive under this
Agreement may be assigned only to his personal
representative or trustee or by will or pursuant to
applicable laws of descent and distribution.
In WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on and to be effective on
October 7, 1998.
In the Presence of:
/s/ James Gumpp
Executive
In the Presence of:
/s/David L. Christopher
Wayne Bancorp, Inc.
CHANGE OF CONTROL AGREEMENT
This is an Agreement (the "Agreement") made by and between
Wayne Bancorp, Inc. ("Company") and Stephen E. Kitchen,
("Executive").
RECITALS
Company is a bank holding company whose principal subsidiary is
engaged in the business of banking and businesses incidental
thereto.
Executive possesses unique skills, knowledge and experience
relating to the business of the Company.
Company desires to recognize the past and future services of
Executive, and, in that connection, Executive desires to be
assured that, in the event of a change in the control of Company,
Executive will be provided with an adequate severance payment
for termination without cause or as compensation for Executive's
Severance because of a material change in his duties and
functions.
Company desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or
not a potential change of control is in the best interest of Company
and its shareholders.
Company desires to induce Executive to remain in the employee
of the Company following a change of control to provide for
continuity of management.
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants expressed in this Agreement, the parties hereto
make the following agreement, intending to be legally bound thereby:
Section 1 - Definitions.
Exchange Act - "Exchange Act" means The Securities Exchange
Act of 1934.
Change in Control - "Change in Control" shall result if:
Any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or
Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or
During any period of 24 consecutive months, individuals who at
the beginning of such period constitute the Board of Directors
(including for this purpose any new director whose election or
nomination for election by the company's stockholders was
approved by a vote of a least two-thirds of the directors then still
in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the
Board of Directors.
Notwithstanding the foregoing, no Trust Department or designated
fiduciary or other trustee of such Trust Department of the Company
or a subsidiary of the Company, or other similar fiduciary capacity
of the Company with direct voting control of the stock shall be
included or considered. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the corporation or any
of its subsidiaries, and no Trustee of any such plan in its capacity
as such Trustee, shall be included or considered.
Code - "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Company - "Company" shall include The Wayne County National
Bank of Wooster and any members of its Affiliated Group, over
which Executive has managerial control, as that term is defined
in Section 1504 of the Code, and shall include any predecessor
corporations of the Company and its Affiliated Group.
Board - "Board" shall mean the Board of Directors of Company.
Section 2 - Term of Agreement.
This Agreement shall be effective from the date of this Agreement
to until the Agreement Termination Date, which is the earliest of:
The tenth anniversary of the date of this Agreement;
The date this Agreement is mutually rescinded;
The date prior to a Change in Control on which the Executive's
employment with the Company is terminated by death, retirement,
disability, resignation, or dismissal for any reason;
The date Executive is terminated for Good Cause (as hereinafter
defined in Section 2C) after a Change in Control;
The date which is five (5) years after a Change in Control.
The date which Company, The Wayne County National Bank of
Wooster, or any other member of its Affiliated Group, and over
which Executive has managerial control, which is a depository
institution which is insured by an agency for any state or the
United States Federal Government:
becomes insolvent: or has appointed any conservator or receiver;
or is determined by an appropriate federal banking agency to be in
a troubled condition, as defined in the applicable law and
regulations governing the appropriate federal banking agency; or
is assigned a composite rating of 4 or 5 by the appropriate federal
banking agency or is informed in writing by the Federal Deposit
Insurance Corporation that it is rated a 4 or 5 under the Uniform
Financial Institution's Rating System of the Federal Financial
Institutions Examination Council; or has initiated against it by the
Federal Deposit Insurance Corporation a proceeding to terminate
or suspend deposit insurance; or
reasonably determines in good faith and with due care that the
payments called for under this Agreement, or the obligations and
promises assumed and made under this Agreement have become
proscribed under applicable law or regulations. Provided, however,
if such law or regulations apply prospectively only, or for some other
reason do not apply to this Agreement, then this Agreement shall
not be deemed by Company to be proscribed under this
Subsection (f).
This Agreement shall not change, alter or amend any rights which
either Company or Executive may have in respect of the termination
of the employment of Executive by Company prior to a Change in
Control. Nothing contained in this Agreement shall be construed
to create any additional right or obligation of Executive to be
employed by Company. If the employment of Executive by
Company is terminated by Company or by Executive, for any
reason whatsoever, prior to a Change in Control, Executive and
Company shall have only such rights and obligations in
respect of such termination as either of them would have had
if this Agreement had not been effected.
For purposes of this Agreement, the employment of Executive by
Company shall be deemed to have been terminated for good
cause only if such employment is terminated by Company by
reason of Executive's; (i) dishonest conduct materially detrimental
to Company; (ii) fraud with respect to the business or affairs of the
Company; (iii) conviction of a felony; (iv) alcohol or illegal drug
abuse; or (v) willful or material violation of any of the obligations
imposed upon Executive under this Agreement, any employment
contract between the Executive and the Company and any material
Company policy.
Section 3 - Reduction in Compensation Proscribed After a
Change in Control.
During the term of this Agreement as defined by Section 2 and after
the date of a Change in Control, Executive shall receive as
compensation, while still employed by Company, a salary at a rate
no less than that in effect as of the change in Control, and
shall in addition, be entitled to receive a bonus equal to at least
the average of the last three years bonuses paid. In addition,
during such period, the Company shall pay and provide for Executive
at no cost to Executive, all of his then-current fringe benefits,
including but not limited to health, disability, dental, life insurance
club memberships, etc., all of which shall be at levels and amounts
no less favorable than levels and amounts I n effect as of the Change
of Control.
Section 4 - Payment Upon Termination of Employment After a
Change in Control.
If during the term of this Agreement as defined by Section 2 and
after the date of a Change of Control, Executive is discharged
without good cause or Executive resigns because he has made
a reasonable, objective determination, in good faith and with due
care, that
Executive has been demoted;
The Company has materially reduced the compensation of
Executive;
The Company has altered Executive's principal place of
employment away from a location which would be greater than
thirty (30) miles from where Executive's place of employment
existed at the time of alteration, or
Company has materially reduced Executive's job title, status or
responsibility;
only then Company shall pay to Executive the benefits as provided
for in Subsection C below.
If Executive is discharged by Company other than for good cause
and there is a Change of Control within two years of the discharge
and during the term of this Agreement, then Company shall pay
to Executive the benefits as provided for in Subsection C below.
If Executive is entitled to benefits under Subsection A or
Subsection B above, then during the benefit period, Company
shall continue at no cost to Executive, Executive's coverage in
Company's health, disability, dental, life insurance and club
memberships at the same levels that had been provided
immediately prior to his termination of employment, and shall
also pay Executive a monthly payment in cash in the amount
defined in Subsection D below, without interest. The first monthly
cash payment shall be paid at the end of the first month
commencing after the Executive's termination of employment in
the case of a benefit entitlement under Subsection A above, and
at the end of the first month commencing after the Change of
Control in the case of a benefit entitlement under Subsection
B above, and payments shall continue each consecutive month
thereafter until 24 payments have been made, or until the
benefit period has ended, if earlier. The benefit period shall
commence on the date of termination of the Executive's
employment or the date of the Change of Control, as the case
may be and shall end on the earlier of:
The last day of the 24th consecutive whole month thereafter, or
The termination date of this Agreement as defined in Section 2(A).
In the event Executive dies after benefits have commenced but before
the end of the benefit period, then the remaining payments shall be
paid to the person or persons as stated in the last designation of
beneficiary concerning this Agreement signed by Executive and filed
with Company, and if not, then to the personal representative of
Executive.
The amount of the monthly cash benefit shall be 8% of the sum of
employee compensation (including bonuses) paid by Company to
Executive in the last whole calendar year preceding Executive's
termination of employment, as determined by the Company for
federal income tax purposes and reported to Executive and
Internal Revenue Service ("IRS"). Provided however, if the
monthly payments required under this Agreement in such amount
together with the other benefits provided for hereunder would be
deemed by the IRS to result in an "Excess Parachute Payment,"
as that term is defined in Section 280G of the Code, then the
amount of such monthly cash payments shall be reduced to the
highest amount which will not result in the total of all benefits
provided for hereunder being deemed by the IRS to result
in an "Excess Parachute Payment," as that term is defined in
Section 280G of the Code, rounded down to the nearest even
+$10 MULTIPLE.
Section 5 - Pension Payments.
Nothing in this Agreement shall change any pension benefits or
benefits from other qualified plans maintained by Company to
which Executive is otherwise entitled. However, payments made
under this Agreement pursuant to Section 4 shall not be considered
compensation for purposes of the Company's pension plan or any
other qualified retirement plan maintained by the Company.
Section 6 - Right to Other Benefits.
Nothing in this Agreement shall abridge, eliminate, or cause
Executive to lose Executive's right or entitlement to any other
Company benefit to which Executive may be entitled due to his
status as an employee under any plan or policy of Company on
such terms and conditions as are required of any employee under
any plan or policy of Company. Further, nothing in this Agreement
shall create in Executive any greater rights or entitlements, except
as specified in this Agreement. The plans and policies referred to
in this Section 6 include, but are not limited to, life insurance plan
dental, disability or health insurance benefits, severance policies,
club memberships, and accrued vacation pay.
Section 7 - Protection of Business.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement:
Executive will not at any time (during or after employment with
Company) divulge, disclose, reveal or communicate to any person,
firm corporation, partnership, joint venture or other entity, directly
or indirectly, any trade secrets or other information which
Executive may have obtained during the course of his
employment by Company in respect of any matters affecting or
relating to the banking business of Company including, without
limitation, any of its plan, policies, business practices, finances,
methods of operation or other information known to Executive
to be historically considered by Company to be confidential
information.
In addition to any action for damages, the restrictions on
competition and other restrictions imposed upon Executive under
this Section 7 of this Agreement may be enforced by Company by
an action for an injunction, it being agreed that (in view of the
general practical difficulty of determining by computation or legal
proof the exact amount of damages, if any, resulting to Company
from a violation by Executive of the provisions of this Section 7)
that there would be no adequate remedy at law for any breach by
Executive of any such restriction.]
The obligations imposed upon Executive by the Section 7 shall
survive the termination of this Agreement pursuant to Section 2
hereof.
Section 8 - Arbitration.
The parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this
Agreement in accordance with the Rules of the American Arbitration
Association, before one arbitrator mutually agreeable to the parties
hereto. If after two weeks Executive determines that Company and
Executive have been unable to agree upon one arbitrator, then
Executive may appoint one arbitrator and require Company to
appoint a second arbitrator. Whereupon, the two appointed
arbitrators shall appoint a third arbitrator mutually agreeable to
them. Company and Executive shall be mutually and equally
responsible for the costs and expenses associated with
arbitration. The arbitration shall occur in Wooster, Ohio,
or such other place as mutually agreed upon.
Section 9 - Notices and Payments
All payments required or permitted to be made under the
provisions of this Agreement, and all notices and other
communications required or permitted to be given or delivered
under this Agreement to Company or to Executive, which
notices or communications must be in writing, shall be
deemed to have been given if delivered by hand, or mailed
by first-class mail, addressed as follows:
If to Company:
Wayne Bancorp, Inc.
112 West Liberty Street
Wooster, Ohio 44691
Attention: Chairman of the Board of Directors
If to Executive:
Stephen E. Kitchen
814 E. Highland Ave.
Wooster, Ohio 44691
Company or Executive may, by notice given to the other from
time to time and at any time, designate a different address for
making payments required to be made, and for the giving of
notices or other communications required or permitted to be
given, to the party designating such new address.
Section 10 - Payroll Taxes.
Any payment required or permitted to be made or given to Executive
under this Agreement shall be subject to the withholding and other
requirements of applicable laws, and to the deduction requirements
of any benefit plan maintained by Company in which Executive is
a participant, and to all reporting, filing and other requirements in
respect of such payments, and Company shall use it best efforts
promptly to satisfy all such requirements.
Section 11 - Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio and the parties hereto consent
to the jurisdiction of the Courts of the State of Ohio and Wayne
County and the Federal District Courts in and for Wayne County
in connection with this Agreement.
Section 12 - Duplicate Originals.
This Agreement may be executed in one or more counter parts,
each of which shall be deemed to be a duplicate original, but all
of which, taken together, shall constitute a single instrument.
Section 13 - Captions.
The captions contained in this Agreement are included only for
Convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretations, construction or meaning and
are in no way to be construed as a part of this Agreement.
Section 14 - Severability.
If any provision of this Agreement or the application of any provision
to any person or any circumstances shall be determined to be
invalid or unenforceable, such provision or portion thereof shall
nevertheless be effective and enforceable to the extent determined
reasonable. Such determination shall not affect any other provision
of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain
in full force and effect, and it I s the intention of company and
Executive that if any provision of this Agreement is susceptible
of two or more constructions, one of which would render the
provision unenforceable, then the provisions shall have the
meaning which renders it enforceable.
Section 15 - Number and Gender.
When used in this Agreement, the number and gender of each
pronoun shall be construed to be such number and gender as
the context, circumstances or its antecedent may require.
Section 16 - Successor and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns (including successive, as well as
immediate, successors and assigns) of Company; provided,
however, that Company may not assign this Agreement or any of
its rights or obligations hereunder to any party other than a
corporation which succeeds to substantially all of the business
and assets of Company by merger, consolidation, sale of assets
or otherwise. This Agreement shall inure to the benefit of and be
binding upon the successor and assigns (including successive,
as well as immediate, successors and assigns) of Executive;
provided, however, that the right of Executive under this
Agreement may be assigned only to his personal
representative or trustee or by will or pursuant to
applicable laws of descent and distribution.
In WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on and to be effective on
October 7, 1998.
In the Presence of:
/s/ Stephen E. KitExecutive
In the Presence of:
/s/David L. ChristWayne Bancorp, Inc.
CHANGE IN CONTROL
TERMINATION AGREEMENT
Agreement made this 20th day of May, 1996, by and between
CHIPPEWA VALLEY BANK, an Ohio banking corporation, and
CHIPPEWA VALLEY BANCSHARES, INC., hereinafter collectively
referred to as "Bank" and PHILIP S. SWOPE, hereinafter referred
to as "Executive".
WITNESSETH:
The Executive serves as the President and Chief Executive
Officer of the Bank and is the key corporate officer of the Bank.
The Board of Directors of the Bank has determined that the
interests of Chippewa Valley Bancshares, Inc. shareholders will be
best served by assuring that its key corporate officer will adhere to
the policy of the Board of Directors with respect to any event by
which another entity would acquire effective control of the bank,
including but not limited to a tender offer.
The Board of Directors ahs also determined that it is in the
Best interest of the shareholders to promote stability for a key
officer.
IN CONSIDERATION OF THE FOREGOING, the mutual
Covenants hereinafter contained and other good and valuable
consideration, receipt of which is hereby acknowledged, the Bank
and Executive agree as follows:
A. Duties of Executive. Executive shall support the position of
The Board of Directors and shall take any action reasonably
Requested by the Board of Directors with respect to any
Event by which another entity would acquire effective control
of the Bank, including but not limited to a tender offer.
B. Change in Control. The term "Change in Control" shall
mean a change in control of a nature that would be required
to be reported by persons or entities subject to the reporting
requirements of Section 14(a) of the Securities Exchange Act
of 1934 in response to item 5(f) of Schedule 14A of
Regulation 14(A) as in effect on the date hereof, or
successor provisions thereto, provided that, without
limitation, such a change in control shall be deemed to have
occurred if (a) any unaffiliated "person", "entity" and "group"
(as defined in Rule 13 (d) -3 issued under the Securities
Exchange Act of 1934) directly or indirectly becomes the
owner of securities of the Bank representing 30% or more of
the combined voting power of the Bank then outstanding
securities or (b) at any time during any period of two
consecutive calendar years individuals, who at the
beginning of such period constitute the Board of Directors
of the Bank, cease for any reason to constitute at least the
majority of such Board unless the election, or the
nomination for election, by the Bank's shareholders of each
new director was approved by a vote of at least two-thirds of
the directors still in office who were directors of the Bank at
the beginning of such two-year period.
C. Bank's Right to Terminate. The Executive shall serve the
Bank at the pleasure of the Bank's Board until such change
In control of the Bank occurs.
D. Termination Following Change in Control. In the event of
termination of employment subsequent to a Change in
Control and prior to the expiration of the term of this
Agreement, the Executive shall be entitled to the benefits
provided in Paragraph F unless such termination is (a)
because of the Executive's Death, Retirement or Disability,
(b) by the Bank for Cause, or (c) by the Executive other than
for Good Reason.
1) Disability or Retirement. Termination of employment
by the Bank based on "Disability" shall mean
termination because of Total and Permanent Disability
as defined in the Long-Term Disability Plan of the
Bank, in effect from time to time, in which the
Executive is participating. Termination of employment
based on "Retirement" shall mean termination of
employment by the Executive in accordance with the
retirement policy (including early retirement policy)
which is in effect from time to time and is generally
applicable to the Bank'[ salaried employees.
2) Cause. The term "Cause" shall mean termination
upon one or more of the following acts of the
Executive:
a) Felonious criminal activity whether or not
affecting the Bank
b) Disclosure to unauthorized persons of Bank
information which is believed by the Board of
Directors of the Bank to be confidential'
c) Breach of any contract with, or violation of any
legal obligation to, the Bank or dishonesty; or
d) Gross negligence or insubordination in the
performance of duties of the position held by
the Executive.
3) Good Reason. The term "Good Reason" shall mean
Voluntary termination of employment by the Executive
based on any of the following:
a) Involuntary reduction in the Executive's monthly or
bi-weekly based salary, which ever is applicable,
as in effect immediately prior to a Change in
Control unless such reduction occurs
simultaneously with a Bank-wide reduction in
officers' salaries;
b) Involuntary relocation to another office located
more than 50 miles from Executive's office location
at the time the Change in Control occurs;
c) Significant reduction in the Executive
responsibilities and status within the Bank's
organization or change in the Executive's title or
office without prior written consent of the Executive.
d) Involuntary discontinuance of the Executive's
Participation in any benefit plans maintained by the
Bank unless such plans are discontinued by
Reason of law or loss of tax deductibility to the
Bank with respect to contributions to such plans,
or are discontinued as a matter of the Bank's
policy applied equally to all participants in such
plans;
e) Involuntary reduction of the Executive's paid
vacation to less than fifteen (15) working days
per calendar years;
f) Failure to obtain an assumption of the Bank's
obligations under this Agreement by any
successor to the Bank, regardless of whether such
entity becomes a successor to the Bank as a result
of a merger, consolidation, sale of the assets of
the Bank, or other form of reorganization; or
Termination of employment which is not effected
pursuant to a Notice of Termination satisfying the
requirements of Paragraph E herein.
E. Notice of Termination. Any purported termination of the
Executive's employment by the Bank or by the Executive
shall be communicated by written Notice of Termination to
the other party. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon,
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provisions so
indicated and shall specify a "Date of Termination."
F. Compensation and Benefits Upon Termination.
1) If, after a Change in Control has occurred and prior
to the expiration of the term of this Agreement, the
Executive's employment by the Bank shall be
terminated: (1) by the Bank other than for Cause,
Disability, Retirement or death or (2) by the Executive
for Good Reason, then the Executive shall be
entitled to the compensation and benefits provided
in Subparagraph (3) below.
2) If either of the conditions in Subparagraph (1) above
are satisfied, the compensation and benefits
described in Subparagraph (3) below shall continue
to be paid or provided until the first to occur of: (a) the
expiration of a period of thirty-six (36) months after the
Date of Termination of the Executive's employment
by the Bank or (b) the date as of which the Executive
obtains comparable employment with another
employer. In no event, however,shall such
compensation and benefits continue beyond age
sixty-five (65) or the Executive's death, whichever first
occurs. For purposes of this Subparagraph (2), the
Executive shall be deemed to have obtained
comparable employment" if the annual compensation
payable to the Executive with respect to his new
position is substantially equivalent to the annual base
salary being paid to the Executive by the Bank
at the time that his employment is terminated. Also,
for purposes of this Agreement, the term "Month"
shall mean a period of thirty (30) days.
3) The compensation and benefits payable to Executive
pursuant to this Paragraph F shall be as follows:
Base Salary. The Bank shall pay to the Executive
a) His monthly or bi-weekly base salary, whichever is
applicable, at the rate in effect at the time Notice
of Termination is given or immediately preceding
a Change in Control, whichever is higher. Such
payments shall be made periodically according to
the same schedule as such salary payments
are made to the Bank's salaried employees.
b) Medical and Life Insurance. The Bank shall
provide medical, life and accidental death and
dismemberment insurance (including conversion
rights), with coverage and limits identical to those
in effect with respect to the Executive immediately
prior to the Change in Control. For the sole
purpose of determining the Executive's eligibility to
participate in the bank's medical, life and
accidental death and dismemberment insurance
plans, the Executive shall be considered to be on
a paid leave of absence as long as he is receiving
compensation or benefits under this Agreement.
G. Overall Limitation on Benefits. Notwithstanding any
provision in this Agreement to the contrary, if the
compensation and benefits provided to the Executive
pursuant to or under this Agreement, either alone or with
other compensation and benefits received by the Executive,
would constitute "parachute payments" within the meaning
of Section 280G of the Internal Revenue Code (the "Code"),
or the regulations adopted or proposed thereunder, then the
compensation and benefits payable pursuant to or under
this Agreement shall be reduced to the extentnecessary so
that no portion thereof shall be subject to the excise
tax imposed by Section 4999 of the Code. The Executive or
any other party entitled to receive the compensation or
benefits thereunder may request a determination as to
whether the compensation or benefit would constitute a
parachute payment and, if requested, such determination
shall be made by independent tax counsel selected by the
Bank and approved by the party requesting such
determination. In the event that any reduction is required
under this Paragraph G, the Bank shall consult with the
Executive in determining the order in which compensation
and benefits shall be reduced.
H. Legal Fees. The Bank shall pay all legal fees and expenses
incurred by the Executive in enforcing any right or benefit
provided by this Agreement.
I. Term of Agreement. This Agreement shall continue in effect
Until the earliest to occur of the following:
1) the last day of the thirty-sixth (36) month, as defined
in Paragraph F, after a Change in Control occurs; or
2) the date as of which the Bank terminates the
Executive's employment, unless such termination of
employment occurs after a Change in Control and is
for other than Cause, Disability, Retirement or Death;
3) or the date as of which the Executive voluntarily
terminates his employment withthe Ban, unless such
termination of employment occursafter a Change in
Control and is for Good Reason.
In the event that the Executive becomes entitled to the
compensation or benefits provided in Paragraph F of this
Agreement before an event of termination occurs as provided in
This Paragraph I, such compensation and benefits shall continue
for the period provided in Paragraph F notwithstanding the
occurrence of such termination.
J. Notice. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given
when delivered or mailed by certified or registered mail,
return receipt requested, postage prepaid, provided that all
notices to the Bank shall be directed to the attention of the
Board of Directors of the Bank and a copy to the Secretary
of the Bank, or to such other address as either party may
have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective
only upon receipt.
K. Miscellaneous. No provisions of this Agreement may be
modified, waived, or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive and such officer as may be specifically
designated by the Board of Directors of the Bank. No
waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar
provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not
expressly set forth in this Agreement; provided,
however, that this Agreement shall not supersede or in any
way limit the rights, duties or obligations Executive may
have under any other written agreement with the Bank. The
validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
Ohio.
L. Validity. The validity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, which shall remain
in full force and effect.
M. Counterparts.
This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original by all of which together will constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed
This Agreement on the date above first written.
Signed in the presence of:
______________ CHIPPEWA VALLEY BANK AND
CHIPPEWA VALLEY BANCSHARES, INC.
_________By: /s/_Carl H. Bradford_______________
(Carl H. Bradford, Jr.) Secretary
_________BANK
___________/s/__Philip S. Swope________________
EXECUTIVE
CHANGE OF CONTROL AGREEMENT
This is an Agreement (the "Agreement") made by and between
Wayne Bancorp, Inc. ("Company") and Jimmy D. Vaughn
("Executive").
RECITALS
Company is a bank holding company whose principal subsidiary is
engaged in the business of banking and businesses incidental
thereto.
Executive possesses unique skills, knowledge and experience
relating to the business of the Company.
Company desires to recognize the past and future services of
Executive, and, in that connection, Executive desires to be
assured that, in the event of a change in the control of Company,
Executive will be provided with an adequate severance payment
for termination without cause or as compensation for Executive's
Severance because of a material change in his duties and
functions.
Company desires to be assured of the objectivity of Executive in
evaluating a potential change of control and advising whether or
not a potential change of control is in the best interest of Company
and its shareholders.
Company desires to induce Executive to remain in the employee
of the Company following a change of control to provide for
continuity of management.
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants expressed in this Agreement, the parties hereto
make the following agreement, intending to be legally bound thereby:
Section 1 - Definitions.
Exchange Act - "Exchange Act" means The Securities Exchange
Act of 1934.
Change in Control - "Change in Control" shall result if:
Any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or
Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or
During any period of 24 consecutive months, individuals who at
the beginning of such period constitute the Board of Directors
(including for this purpose any new director whose election or
nomination for election by the company's stockholders was
approved by a vote of a least two-thirds of the directors then still
in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the
Board of Directors.
Notwithstanding the foregoing, no Trust Department or designated
fiduciary or other trustee of such Trust Department of the Company
or a subsidiary of the Company, or other similar fiduciary capacity
of the Company with direct voting control of the stock shall be
included or considered. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the corporation or any
of its subsidiaries, and no Trustee of any such plan in its capacity
as such Trustee, shall be included or considered.
Code - "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Company - "Company" shall include The Wayne County National
Bank of Wooster and any members of its Affiliated Group, over
which Executive has managerial control, as that term is defined
in Section 1504 of the Code, and shall include any predecessor
corporations of the Company and its Affiliated Group.
Board - "Board" shall mean the Board of Directors of Company.
Section 2 - Term of Agreement.
This Agreement shall be effective from the date of this Agreement
to until the Agreement Termination Date, which is the earliest of:
The tenth anniversary of the date of this Agreement;
The date this Agreement is mutually rescinded;
The date prior to a Change in Control on which the Executive's
employment with the Company is terminated by death, retirement,
disability, resignation, or dismissal for any reason;
The date Executive is terminated for Good Cause (as hereinafter
defined in Section 2C) after a Change in Control;
The date which is five (5) years after a Change in Control.
The date which Company, The Wayne County National Bank of
Wooster, or any other member of its Affiliated Group, and over
which Executive has managerial control, which is a depository
institution which is insured by an agency for any state or the
United States Federal Government:
becomes insolvent: or has appointed any conservator or receiver;
or is determined by an appropriate federal banking agency to be in
a troubled condition, as defined in the applicable law and
regulations governing the appropriate federal banking agency; or
is assigned a composite rating of 4 or 5 by the appropriate federal
banking agency or is informed in writing by the Federal Deposit
Insurance Corporation that it is rated a 4 or 5 under the Uniform
Financial Institution's Rating System of the Federal Financial
Institutions Examination Council; or has initiated against it by the
Federal Deposit Insurance Corporation a proceeding to terminate
or suspend deposit insurance; or
reasonably determines in good faith and with due care that the
payments called for under this Agreement, or the obligations and
promises assumed and made under this Agreement have become
proscribed under applicable law or regulations. Provided, however,
if such law or regulations apply prospectively only, or for some other
reason do not apply to this Agreement, then this Agreement shall
not be deemed by Company to be proscribed under this
Subsection (f).
This Agreement shall not change, alter or amend any rights which
either Company or Executive may have in respect of the termination
of the employment of Executive by Company prior to a Change in
Control. Nothing contained in this Agreement shall be construed
to create any additional right or obligation of Executive to be
employed by Company. If the employment of Executive by
Company is terminated by Company or by Executive, for any
reason whatsoever, prior to a Change in Control, Executive and
Company shall have only such rights and obligations in
respect of such termination as either of them would have had
if this Agreement had not been effected.
For purposes of this Agreement, the employment of Executive by
Company shall be deemed to have been terminated for good
cause only if such employment is terminated by Company by
reason of Executive's; (i) dishonest conduct materially detrimental
to Company; (ii) fraud with respect to the business or affairs of the
Company; (iii) conviction of a felony; (iv) alcohol or illegal drug
abuse; or (v) willful or material violation of any of the obligations
imposed upon Executive under this Agreement, any employment
contract between the Executive and the Company and any material
Company policy.
Section 3 - Reduction in Compensation Proscribed After a
Change in Control.
During the term of this Agreement as defined by Section 2 and after
the date of a Change in Control, Executive shall receive as
compensation, while still employed by Company, a salary at a rate
no less than that in effect as of the change in Control, and
shall in addition, be entitled to receive a bonus equal to at least
the average of the last three years bonuses paid. In addition,
during such period, the Company shall pay and provide for Executive
at no cost to Executive, all of his then-current fringe benefits,
including but not limited to health, disability, dental, life insurance
club memberships, etc., all of which shall be at levels and amounts
no less favorable than levels and amounts I n effect as of the Change
of Control.
Section 4 - Payment Upon Termination of Employment After a
Change in Control.
If during the term of this Agreement as defined by Section 2 and
after the date of a Change of Control, Executive is discharged
without good cause or Executive resigns because he has made
a reasonable, objective determination, in good faith and with due
care, that
Executive has been demoted;
The Company has materially reduced the compensation of
Executive;
The Company has altered Executive's principal place of
employment away from a location which would be greater than
thirty (30) miles from where Executive's place of employment
existed at the time of alteration, or
Company has materially reduced Executive's job title, status or
responsibility;
only then Company shall pay to Executive the benefits as provided
for in Subsection C below.
If Executive is discharged by Company other than for good cause
and there is a Change of Control within two years of the discharge
and during the term of this Agreement, then Company shall pay
to Executive the benefits as provided for in Subsection C below.
If Executive is entitled to benefits under Subsection A or
Subsection B above, then during the benefit period, Company
shall continue at no cost to Executive, Executive's coverage in
Company's health, disability, dental, life insurance and club
memberships at the same levels that had been provided
immediately prior to his termination of employment, and shall
also pay Executive a monthly payment in cash in the amount
defined in Subsection D below, without interest. The first monthly
cash payment shall be paid at the end of the first month
commencing after the Executive's termination of employment in
the case of a benefit entitlement under Subsection A above, and
at the end of the first month commencing after the Change of
Control in the case of a benefit entitlement under Subsection
B above, and payments shall continue each consecutive month
thereafter until 24 payments have been made, or until the
benefit period has ended, if earlier. The benefit period shall
commence on the date of termination of the Executive's
employment or the date of the Change of Control, as the case
may be and shall end on the earlier of:
The last day of the 24th consecutive whole month thereafter, or
The termination date of this Agreement as defined in Section 2(A).
In the event Executive dies after benefits have commenced but before
the end of the benefit period, then the remaining payments shall be
paid to the person or persons as stated in the last designation of
beneficiary concerning this Agreement signed by Executive and filed
with Company, and if not, then to the personal representative of
Executive.
The amount of the monthly cash benefit shall be 8% of the sum of
employee compensation (including bonuses) paid by Company to
Executive in the last whole calendar year preceding Executive's
termination of employment, as determined by the Company for
federal income tax purposes and reported to Executive and
Internal Revenue Service ("IRS"). Provided however, if the
monthly payments required under this Agreement in such amount
together with the other benefits provided for hereunder would be
deemed by the IRS to result in an "Excess Parachute Payment,"
as that term is defined in Section 280G of the Code, then the
amount of such monthly cash payments shall be reduced to the
highest amount which will not result in the total of all benefits
provided for hereunder being deemed by the IRS to result
in an "Excess Parachute Payment," as that term is defined in
Section 280G of the Code, rounded down to the nearest even
+$10 MULTIPLE.
Section 5 - Pension Payments.
Nothing in this Agreement shall change any pension benefits or
benefits from other qualified plans maintained by Company to
which Executive is otherwise entitled. However, payments made
under this Agreement pursuant to Section 4 shall not be considered
compensation for purposes of the Company's pension plan or any
other qualified retirement plan maintained by the Company.
Section 6 - Right to Other Benefits.
Nothing in this Agreement shall abridge, eliminate, or cause
Executive to lose Executive's right or entitlement to any other
Company benefit to which Executive may be entitled due to his
status as an employee under any plan or policy of Company on
such terms and conditions as are required of any employee under
any plan or policy of Company. Further, nothing in this Agreement
shall create in Executive any greater rights or entitlements, except
as specified in this Agreement. The plans and policies referred to
in this Section 6 include, but are not limited to, life insurance plan
dental, disability or health insurance benefits, severance policies,
club memberships, and accrued vacation pay.
Section 7 - Protection of Business.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement:
Executive will not at any time (during or after employment with
Company) divulge, disclose, reveal or communicate to any person,
firm corporation, partnership, joint venture or other entity, directly
or indirectly, any trade secrets or other information which
Executive may have obtained during the course of his
employment by Company in respect of any matters affecting or
relating to the banking business of Company including, without
limitation, any of its plan, policies, business practices, finances,
methods of operation or other information known to Executive
to be historically considered by Company to be confidential
information.
In addition to any action for damages, the restrictions on
competition and other restrictions imposed upon Executive under
this Section 7 of this Agreement may be enforced by Company by
an action for an injunction, it being agreed that (in view of the
general practical difficulty of determining by computation or legal
proof the exact amount of damages, if any, resulting to Company
from a violation by Executive of the provisions of this Section 7)
that there would be no adequate remedy at law for any breach by
Executive of any such restriction.]
The obligations imposed upon Executive by the Section 7 shall
survive the termination of this Agreement pursuant to Section 2
hereof.
Section 8 - Arbitration.
The parties hereto agree to arbitrate any issue, misunderstanding,
disagreement or dispute in connection with the terms in effect in this
Agreement in accordance with the Rules of the American Arbitration
Association, before one arbitrator mutually agreeable to the parties
hereto. If after two weeks Executive determines that Company and
Executive have been unable to agree upon one arbitrator, then
Executive may appoint one arbitrator and require Company to
appoint a second arbitrator. Whereupon, the two appointed
arbitrators shall appoint a third arbitrator mutually agreeable to
them. Company and Executive shall be mutually and equally
responsible for the costs and expenses associated with
arbitration. The arbitration shall occur in Wooster, Ohio,
or such other place as mutually agreed upon.
Section 9 - Notices and Payments
All payments required or permitted to be made under the
provisions of this Agreement, and all notices and other
communications required or permitted to be given or delivered
under this Agreement to Company or to Executive, which
notices or communications must be in writing, shall be
deemed to have been given if delivered by hand, or mailed
by first-class mail, addressed as follows:
If to Company:
Wayne Bancorp, Inc.
112 West Liberty Street
Wooster, Ohio 44691
Attention: Chairman of the Board of Directors
If to Executive:
Jimmy D. Vaughn
876 E. Moreland Road
Wooster, Ohio 44691
Company or Executive may, by notice given to the other from
time to time and at any time, designate a different address for
making payments required to be made, and for the giving of
notices or other communications required or permitted to be
given, to the party designating such new address.
Section 10 - Payroll Taxes.
Any payment required or permitted to be made or given to Executive
under this Agreement shall be subject to the withholding and other
requirements of applicable laws, and to the deduction requirements
of any benefit plan maintained by Company in which Executive is
a participant, and to all reporting, filing and other requirements in
respect of such payments, and Company shall use it best efforts
promptly to satisfy all such requirements.
Section 11 - Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio and the parties hereto consent
to the jurisdiction of the Courts of the State of Ohio and Wayne
County and the Federal District Courts in and for Wayne County
in connection with this Agreement.
Section 12 - Duplicate Originals.
This Agreement may be executed in one or more counter parts,
each of which shall be deemed to be a duplicate original, but all
of which, taken together, shall constitute a single instrument.
Section 13 - Captions.
The captions contained in this Agreement are included only for
Convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretations, construction or meaning and
are in no way to be construed as a part of this Agreement.
Section 14 - Severability.
If any provision of this Agreement or the application of any provision
to any person or any circumstances shall be determined to be
invalid or unenforceable, such provision or portion thereof shall
nevertheless be effective and enforceable to the extent determined
reasonable. Such determination shall not affect any other provision
of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain
in full force and effect, and it I s the intention of company and
Executive that if any provision of this Agreement is susceptible
of two or more constructions, one of which would render the
provision unenforceable, then the provisions shall have the
meaning which renders it enforceable.
Section 15 - Number and Gender.
When used in this Agreement, the number and gender of each
pronoun shall be construed to be such number and gender as
the context, circumstances or its antecedent may require.
Section 16 - Successor and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns (including successive, as well as
immediate, successors and assigns) of Company; provided,
however, that Company may not assign this Agreement or any of
its rights or obligations hereunder to any party other than a
corporation which succeeds to substantially all of the business
and assets of Company by merger, consolidation, sale of assets
or otherwise. This Agreement shall inure to the benefit of and be
binding upon the successor and assigns (including successive,
as well as immediate, successors and assigns) of Executive;
provided, however, that the right of Executive under this
Agreement may be assigned only to his personal
representative or trustee or by will or pursuant to
applicable laws of descent and distribution.
In WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on and to be effective on
October 7, 1998.
In the Presence of:
/s/ Jimmy D. Vaughn
Executive
In the Presence of:
/s/David L. Christopher
Wayne Bancorp, Inc.
