Executive Employment
Contract
This
Contract is made as of October 24, 2005 (“Effective
Date”), between Commercial Bancshares, Inc.
(“CBS”), an Ohio corporation having an address of 118
S. Sandusky Avenue, P.O. Box 90, Upper Sandusky, Ohio 43351, and
Scott A. Oboy (“Mr. Oboy”), having an
address of ______, for Mr. Oboy’s employment by CBS as
Chief Financial Officer (“CFO”) of CBS.
A. CBS
desires to employ Mr. Oboy under the terms and conditions set
forth in this Contract.
B. Mr. Oboy
desires to be employed by CBS under the terms set forth in this
Contract.
C. CBS has
sent to Mr. Oboy, and Mr. Oboy has accepted, a letter of
intent (“Letter of Intent”) to enter into an
employer-employee relationship. A copy of the Letter of Intent is
attached to this Contract as Exhibit A.
In consideration
of the promises contained in this Contract, the parties agree as
follows:
1.
Employment . Upon the
terms and subject to the conditions of this Contract, CBS hereby
agrees to employ Mr. Oboy. Upon the terms and subject to the
conditions of this Contract, Mr. Oboy agrees to serve as a
full time employee of CBS.
(a)
General . Mr. Oboy shall render services and perform
the duties of the position of CFO of CBS. Subject to Sections 2(b)
and 2(d), Mr. Oboy shall perform such other duties and have
such other responsibilities for CBS and its affiliates as are of
the same character and nature as those typically performed by the
chief financial officer of a bank holding company of comparable
size and with a comparable market to that of CBS.
(b)
Reporting and authority . Mr. Oboy shall report to and
be subject to the supervision and direction of the Chief Executive
Officer of CBS (the “CEO”). Mr. Oboy shall have
the authority set by the CBS Code of Regulations and the authority
delegated by the Board.
(c)
Full-time employee . Mr. Oboy shall devote his
full-time employment during the term of this Contract to the
faithful and diligent performance of his duties for CBS.
Mr. Oboy shall not engage in other employment or business
activities, whether or not the employment or activities are pursued
for gain, profit, or other pecuniary advantage without the prior
written consent of CBS.
(d)
Adherence to standards . Mr. Oboy shall perform all
duties in a competent and professional manner in accordance with
applicable accounting and financial reporting standards.
Mr. Oboy shall abide by the Articles of Incorporation and Code
of Regulations of CBS; the rules, regulations, policies, and
performance objectives of CBS as they exist from time to time;
applicable ethical and business standards; and the law, including,
but not limited to, the Sarbanes-Oxley Act of 2002 and the
regulations promulgated under the act. The parties understand that
collaborative goals and objectives will be developed, and that
progress towards these established criteria will be used to
determine performance.
3.
Compensation .
“Compensation” includes base salary and employee
benefits.
(a) Base
salary . During the initial term of this Contract, CBS shall
pay Mr. Oboy a base salary of $120,000, subject to all
applicable withholdings, in accordance with the then current
policies of CBS for executive compensation. The base salary
provided by this Section 3(a) as adjusted under Section 3(c) may be
called “base salary”.
(b)
Employee benefits . In addition to the base salary,
CBS shall provide to, or for the benefit of, Mr. Oboy, the
following employee benefits:
1.
|
|
|
|
|
|
|
|
|
[i]
|
|
Vacation and
sick leave. Participation
in the vacation and sick leave plan maintained for executives of
CBS, which includes four weeks of vacation each year.
|
|
|
|
|
|
|
|
|
|
[ii]
|
|
Business
expense reimbursement. Reimbursement for, or payment of, the reasonable
business and entertainment expenses incurred by Mr. Oboy on
behalf of CBS pursuant to the written policies of CBS or as
otherwise approved by the Board.
|
|
|
|
|
|
|
|
|
|
[iii]
|
|
Continuing
education/seminars. Reimbursement for reasonable expenses incurred
by Mr. Oboy for continuing education to maintain his status as
a Certified Public Accountant. Attendance at continuing education
programs and seminars shall not constitute vacation time, if the
attendance is approved by the CEO or Chair of the Board.
|
|
|
|
|
|
|
|
|
|
[iv]
|
|
Benefit
plans. Participation in
the retirement and welfare benefit plans made available to the
employees of CBS and in any such other similar plans maintained by
CBS on the same basis as the other executive employees of CBS who
participate in such plans.
|
|
|
|
|
|
|
|
|
|
[v]
|
|
Deferred
compensation program. Participation in CBS’s deferred
compensation program to the extent authorized by law.
|
|
|
|
|
|
|
|
|
|
[vi]
|
|
Health and
disability insurance plans. Participation in the family group health,
disability, and other insurance plans made available to the
employees of CBS and in any such other similar plans maintained for
the executives of CBS on the same basis as the other executives
participating in such plans.
|
|
|
|
|
|
|
|
|
|
[vii]
|
|
Life
insurance plans. A term
life insurance policy upon the life of Mr. Oboy in an amount equal
to one and one-half times his annual base salary continuing on if
Mr. Oboy becomes partially or permanently disabled.
|
|
|
|
|
|
|
|
|
|
[viii]
|
|
Memberships. Reimbursement for, or payment of, the membership
dues and other expenses required to maintain a membership of
Mr. Oboy in a single health club or other club or organization
that CBS determines to be beneficial to CBS.
|
|
|
|
|
|
|
|
|
|
[ix]
|
|
Automobile
allowance . A $700 per
month automobile expense allowance to reimburse Mr. Oboy for
some or all of the cost of maintaining and operating an automobile
for use in the performance of Mr. Oboy’s duties under
this Contract. Mr. Oboy also shall receive reimbursement for
mileage relating to his use of the automobile to perform his duties
under this Contract at a rate equal to one-half (1/2) of the
standard mileage rate established annually by the Internal Revenue
Service. Mr. Oboy shall maintain the automobile in first-class
condition and insure that the automobile is available for
Mr. Oboy’s use in the business of CBS.
|
(c) Reports
of use of employee benefits . Mr. Oboy shall submit
regular reports of personal use of the employee benefits required
under the Internal Revenue Code to be treated as taxable income to
Mr. Oboy in order to allow CBS to determine the amount that
must be reported to the Internal Revenue Service as compensation to
Mr. Oboy. In providing the employee benefits under
Section 3(b), the Board may determine that the payment for any
or all of such employee benefits shall be taken from the pre-tax
salary of Mr. Oboy, to the extent permissible under applicable
law.
The benefits
provided under Section 3(b) and pursuant to annual adjustments, if
any, under Section 3(d) may be called “employee
benefits”.
(d)
Annual review . Mr. Oboy’s base salary and
employee benefits will be reviewed and, in the discretion of CBS,
shall be subject to adjustment not less frequently than annually,
at the end of each calendar year during the term of this Contract.
Any adjustments to Mr. Oboy’s base salary and employee
benefits (including any decision not to adjust base salary or
employee benefits) shall be made in the sole discretion of the
Board or a committee of the Board.
2.
(a) Term;
renewal; and non-renewal . Mr. Oboy’s employment and
this Contract are effective as of the Effective Date and shall
remain in full force and effect for a period expiring
October 24, 2006, unless earlier terminated.
Mr. Oboy’s employment and this Contract shall be renewed
automatically for a one year period following the conclusion of the
original term and following the end of each subsequent one year
period upon the terms and conditions set forth in this Contract,
unless either party gives written notification to the other party
of the intention not to renew this Contract or to alter any of its
terms and conditions not less than 60 days prior to the
termination hereof.
(b)
Termination other than expiration of term .
(1)
Termination by CBS without cause . CBS may terminate
Mr. Oboy’s employment without cause by giving
Mr. Oboy a notice of termination. The notice of termination
without cause shall be effective upon the earlier of actual receipt
by Mr. Oboy or two days after mailing by first class mail. If
CBS terminates the employment of Mr. Oboy without cause, CBS
shall provide Mr. Oboy with twelve (12) consecutive
months of continuing compensation commencing upon termination. CBS
shall pay the base salary component of the continuing compensation
in arrears on the last day of each month commencing on the last day
of the first month after the month in which termination has
occurred. A termination of Mr. Oboy’s employment
voluntarily by Mr. Oboy, a termination of Mr. Oboy’s
employment arising out of illness or disability, and a termination
of Mr. Oboy’s employment after a change in control will
not be a termination without cause under this
subsection.
(2)
Termination by Mr. Oboy . Mr. Oboy may terminate
his employment by giving CBS sixty (60) days notice of his
intention to resign. If Mr. Oboy voluntarily terminates his
employment, CBS will not be obligated to pay continuing
compensation after the date of termination, except as required by
law.
(3)
Termination by CBS for cause . CBS may terminate
Mr. Oboy’s employment for cause by giving Mr. Oboy
notice of termination for cause. The notice of termination for
cause is not required to describe the cause or causes, but must
state that “Your employment is hereby terminated for
cause”. The notice of termination for cause shall be
effective upon the earlier of actual receipt by Mr. Oboy or
two business days after mailing by first class mail. If CBS
terminates Mr. Oboy’s employment for cause, CBS will not be
obligated to pay or provide any compensation of any type after the
date of termination, except as required by law. “Cause”
includes, but is not limited to, conduct by Mr. Oboy
concerning any one or more of the following: [i] failure to adhere
to ethical standards or the law; [ii] moral and ethical misdeeds
conducted on the job; [iii] failure to carry out duties of
employment or to carry out directions of the CEO; [iv] willful
misconduct; [v] conviction of a felony; or [vi] conduct that
otherwise interferes with the performance of Mr. Oboy’s
duties or CBS’s business, including any conduct that
adversely reflects upon CBS or its business and any conduct
committed during or outside of the employment relationship that,
reasonably considered, harms the reputation of CBS. As used in this
subsection, “conduct” includes one or more acts, one or
more failures to act, or any combination of an act, multiple acts,
a failure to act, or multiple failures to act.
(4)
Termination upon permanent disability .
Mr. Oboy’s employment shall terminate upon the permanent
disability of Mr. Oboy. “Permanent disability”
means Mr. Oboy’s physical or mental inability to perform
the services required under this Contract caused by a physical or
mental condition or impairment for a period exceeding
180 days. If a disability prevents Mr. Oboy from
performing the services required under this Contract, Mr. Oboy
shall receive such short-term and long-term disability coverage as
shall then be available to employees of CBS. CBS will not otherwise
be obligated to pay any continuing compensation upon the permanent
disability of Mr. Oboy, except as required by law.
(5)
Termination after a change in control .
(i) When
a termination after a change in control occurs .
A
termination after a change in control occurs [i] when, within one
year after a change in control, Mr. Oboy’s employment is
terminated without cause; [ii] when, within one year after a change
in control, Mr. Oboy resigns because he has [a] been demoted,
[b] had his compensation reduced, [c] had his principal place of
employment transferred away from Wyandot County, Ohio or a county
contiguous
3.
thereto, or [d]
had his job title, status or responsibility materially reduced; or
[iii] when, [a] Mr. Oboy’s employment is terminated by
CBS without cause, [b] there is a change in control within one
(1) year following the termination, and [c]
Mr. Oboy’s termination of employment [1] was at the
request of a third party who has taken steps reasonably calculated
to effect a change in control or [2] was otherwise in anticipation
of a change in control. A termination of employment [i] upon
expiration of the term of this Contract, [ii] for cause, or [iii]
upon the permanent disability of Mr. Oboy is not a termination
after a change in control.
(ii)
Continuing compensation after termination after a change in
control .
If
Mr. Oboy’s employment is terminated after a change in
control, CBS shall provide Mr. Oboy eighteen
(18) consecutive months of continuing compensation commencing
upon termination. CBS shall pay the base salary component of the
continuing compensation in arrears on the last day of each month
commencing on the last day of the first month after the month in
which termination has occurred.
(iii)
No parachute payments .
|
