This
employment Agreement (this “Agreement”) is made and
entered into between Frank L. Paden (“Paden”) and
Farmers National Bank of Canfield, its affiliates and/or
subsidiaries (the “Bank”), effective as of the last
date set forth below. In consideration of the mutual covenants
herein, Paden and the Bank hereby agree as follows:
1.
Job Title and Duties . Paden will continue to be employed as
the Chief Executive Officer of the Bank. Paden will timely,
faithfully and diligently perform all such duties as are
customarily associated with and incidental to the employment of a
Chief Executive Officer within the banking industry, including all
specific duties for the Bank which may be assigned to him from time
to time by the Bank. Paden understands and agrees that he will have
no authority, express or implied, to perform any acts on behalf of
the Bank, except as specifically outlined in this Agreement. Paden
will not engage in any activity inconsistent with his duties and/or
the business objectives of the Bank. Paden will refrain from
conduct or practices harmful to the Bank’s good will,
business reputation, patents, trademarks and service
marks.
2.
Compensation . Beginning on October 1, 2008, Paden will
be paid a base salary of U.S. $238,600.00 per annum, payable in
twenty-four (24) bi-monthly installments of $9,941.67 each,
less applicable tax withholdings and benefit deductions. Paden will
also be paid director fees in the amount of $12,000.00 per annum,
less applicable tax withholdings. Paden’s base salary will be
reviewed on an annual basis, consistent with the Bank’s
normal compensation review practices for executive employees. Paden
will also be eligible to participate in the Executive Management
Incentive Program, according to the same terms and conditions
applicable to all other executive employees of the Bank.
3.
Term . Paden’s employment under this Agreement will
commence on October 1, 2008 and will continue for a period of
thirty-six (36) months, unless earlier terminated in
accordance with any of the provisions of Paragraph 12 of this
Agreement. The term of this Agreement shall automatically be
renewed in 36-month increments, unless written notice of
termination is provided by either party at least 90 days prior
to the expiration of the original term or any 36-month renewal
term.
4.
Compliance with Bank Policies . Paden acknowledges receipt
of the Bank’s Personnel Manual and Code of Ethics. Paden
understands and agrees to be bound by all rules and regulations
contained therein, as well as all other written policies, rules and
regulations which may be established by the Bank from time to
time.
5.
Benefit Plans . While employed by the Bank, Paden will be
eligible to participate in all such benefit plans (including,
without limitation, medical and dental plans, disability and life
insurance, and 401(K) plans) according to the same terms and
conditions as all other executive employees of the Bank. The Bank
reserves the right to modify, amend or terminate all or part of its
employee benefit plans at any time. If such a change
occurs,
1
Paden will
receive notice of the change and an explanation of how the change
will affect his benefit coverage.
6.
Vacation Benefits . Paden will be eligible for vacation
benefits in the amount of four (4) weeks per year, which may
be taken in accordance with the same terms and conditions as other
executive employees of the Bank. There will be no carryover of
unused vacation time from year-to-year. Paden will be paid for any
accrued but unused vacation time remaining at the termination of
his employment, unless his employment is terminated “for
cause,” as defined in Paragraph 12 (B) of this
Agreement.
7.
Expense Reimbursement . Paden will receive prompt
reimbursement for all reasonable and necessary expenses incurred in
the performance of his duties as Chief Executive Officer, including
mileage, airfare, and reasonable meal and hotel expenses incurred
while traveling on business to locations other than the
Bank’s headquarters in Canfield, Ohio. All such expenses must
be documented and accounted for in accordance with the Bank’s
reimbursement policies and procedures.
8.
Indemnification . To the fullest extent permitted under the
applicable laws of the State of Ohio and federal banking laws, the
Bank will indemnify and hold Paden harmless from any and all
expenses, judgments, fines, penalties, and amounts paid in
settlement as a result of his service to, or actions (other than
actions which are determined by a court of competent jurisdiction
to be made without business judgment or outside the scope of his
employment) on behalf of, the Bank.
9.
Stock Option Plan . As an officer of the Bank, Paden will be
eligible to participate in that certain 1999 Stock Option Plan of
Farmers National Banc Corp., the parent of the Bank (the
“Company”), as amended, and as the same may be further
amended, modified, or restated from time to time, and any successor
plan, pursuant to which Paden may receive compensation in an amount
determined by the Company in its discretion..
10.
Confidential Information . Paden acknowledges and agrees
that he will not, while employed by the Bank and at all times
thereafter, directly or indirectly communicate or divulge any
Confidential Information relating to the Bank to any other person
or business entity. For purposes of this Agreement,
“Confidential Information” shall refer to any
proprietary information relating to the conduct of the business of
the Bank, including the Bank’s unique business methods and
compilations of information that has caused or continues to cause
the Bank to enjoy a competitive advantage over companies engaged in
the same or a similar business, including but not limited to the
Bank’s methods of operations, customer relations, customer
lists, contacts, confidential price policies and confidential price
characteristics, lists of employees, vendors and suppliers,
confidential information relating to marketing plans, quotations
and contracts, order processing, procedures, purchasing and pricing
methods and procedures, supplies, personnel information, financial
data, future business plans, and the like.
2
All
records, files, plans, documents and the like relating to the
business of the Bank, including but not limited to Confidential
Information which Paden has or will prepare, use or come into
contact with shall remain the sole property of the Bank, shall not
be copied without written permission, and shall be returned
immediately to the Bank upon termination of Paden’s
employment with the Bank, or at the Bank’s request at any
time. Further, Paden will not directly or indirectly use or
disclose to any other person or business entity the Bank’s
secret or Confidential Information without the prior written
consent of an officer of the Bank. Paden further agrees to take all
reasonable precautions to protect against the negligent or
inadvertent disclosure of the Bank’s secret or Confidential
Information to any other person or business entity. If Paden does
improperly use or disclose any secret or Confidential Information,
he understands that his employment will be subject to termination.
Paden also recognizes that all writings, illustrations, drawings
and other similar materials that embody or otherwise contain
Confidential Information which he may produce or which may be given
to him in connection with his employment, are the property of the
Bank and it shall be Paden’s obligation to deliver the same
to the Bank upon request, and upon termination of his employment
with the Bank for any reason.
11.
Intellectual Property Rights . Paden acknowledges and agrees
that any procedure, design feature, schematic, invention,
improvement, development, discovery, know how, concept, idea or the
like (whether or not patentable, registrable, under copyright or
trademark laws, or otherwise protectable under similar laws) that
he may conceive of, suggest, make, invent, develop or implement
during the course of his employment with the Bank (whether
individually or jointly with any other person), relating in any way
to the business of the Bank, and all physical embodiments and
manifestations thereof, and all patent rights, copyrights,
trademarks (or application therefore) and similar protections
therein (all of which consists of “Work Product”),
shall be the sole, exclusive and absolute property of the Bank. All
such Work Product shall be deemed to be works for hire and,
further, Paden hereby assigns to the Bank all rights, title and
interest in, to and under such Work Product, including but not
limited to, the right to obtain such patents, copyright
registrations, trademark registrations or similar protections as
the Bank may desire to obtain. Paden will immediately disclose all
Work Product to the Bank and agrees, at any time upon the
Bank’s request and without additional compensation, to
execute any documents and to otherwise cooperate with the Bank
respecting the perfection of its rights, title and interest in, to
and under such Work Product, and in any litigation or other
controversy in connection therewith, all reasonable expenses
incident thereto to be borne by the Bank.
12.
Termination of the Employment Relationship .
A.
“Without Cause” Either party may terminate
Paden’s employment “without cause” at any time
and for any reason, provided that 30 days’ advance
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