EXHIBIT 10.14
SEVERANCE COMPENSATION AGREEMENT
THIS SEVERANCE COMPENSATION AGREEMENT (the
“Agreement”), has been made on March 9, 2006 by
FENTURA FINANCIAL, INC. , a Michigan corporation (the
“Company”), THE STATE BANK , (the
“Bank”) and HOLLY J. PINGATORE , an
individual (the “Executive”).
BACKGROUND STATEMENT:
The
Executive is a principal officer of the Bank and the Company and
his continued services are important to the Bank, its depositors
and customers, and the Company’s shareholders. The Bank and
the Company believe it is in their best interests that the
Executive continue to render services to the Bank and the Company
if a Change of Control is threatened or occurs, free from the
distractions and vexations which might result if his personal
economic security is made uncertain as a result of an impending
Change of Control.
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1.
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Definitions. The following words and phrases have the
following meanings:
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a)
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“Cause” means (i) the willful and continuing
failure by the Executive to substantially perform his duties with
the Bank or the Company (other than any such failure resulting from
the Executive’s death or Disability) and which is not
remedied in a reasonable period of time after receipt by Executive
of written notice from the Bank specifying the duties the Executive
has failed to perform, or (ii) the willful and continued
engaging by Executive in gross misconduct that is materially
injurious to the Bank or the Company and which is not ceased within
a reasonable period of time after receipt by Executive of written
notice from the Bank specifying the misconduct and the injury, or
(iii) an adjudication of the Executive’s guilt of any
crime involving a serious and substantial breach of the
Executive’s fiduciary duties to the Bank. No act or failure
to act on the Executive’s part shall be considered
“willful” unless done, or omitted to be done, by him in
bad faith and without reasonable belief that his action or omission
was in the best interest of the Bank or the Company.
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b)
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“Change in Control”
means (i) the acquisition,
directly, indirectly and/or beneficially, by any person or group,
of more than fifty percent (50%) of the voting securities of
the Company or the Bank, (ii) the occurrence of any event at
any time during any two (2) year period which results in a
majority of the Board of Directors of the Company or the Bank being
comprised of individuals who were not members of such Board at the
commencement of that two (2) year period (the “Incumbent
Board”); provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company’s or the Bank’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding for this purpose any such individual whose initial
assumption of the office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Incumbent
Board, (iii) a sale of all or substantially all of the assets
of the Company or the Bank to another entity, or (iv) a merger
or reorganization of the Company or the Bank with another
entity.
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c)
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“Compensation”
means with respect to the period
under consideration, the aggregate of all amounts paid by the
Company and the Bank to and includable in the Executive’s
earnings as base salary, bonuses, commissions, fees and any other
compensation, but excluding contributions made to any welfare and
pension benefit plans by the Bank and/or Company at its or their
sole expense.
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d)
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“Disability” means any physical or mental impairment which
meets the definition of disability found in the long-term or
short-term disability policy insuring the Executive at the time
disability is alleged or if no such policy is in effect at that
time, any physical or mental impairment that, on the basis of
qualified medical opinion of three (3) medical doctors, has
rendered Executive wholly and permanently unable to engage in the
regular and continuous occupation or employment for remuneration or
profit of a nature similar to his employment with the Bank for a
period of six (6) consecutive months or more.
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e)
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“Good
Reason” means any
of the following, as determined by the Executive in his discretion:
(i) the assignment to the Executive by the Bank or the Company
of any duties inconsistent with his position, duties,
responsibilities and status with the Bank or the Company
immediately prior to a Change in Control, or a change adverse to
Executive in Executive’s reporting responsibilities, titles,
terms of employment (including bonus, compensation, fringe benefits
and vacation entitlement) or offices as in effect immediately
prior to a Change in Control; or (ii) the Bank or the Company
requiring Executive to be based anywhere other than within fifteen
(15) miles of his present office location, or to travel on
business of the Bank to an extent substantially greater than
Executive’s present business travel obligations; or
(iii) the failure by the Company to obtain the assumption of
this Agreement as contemplated in Section 6 hereof. If any of
the foregoing result from, or follow, a termination of employment
for Cause, then Good Reason will not have occurred.
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2.
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Income
Protection Benefits. If
the Execu
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