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SPECIAL SEPARATION AGREEMENT

Termination Severance Agreement

SPECIAL SEPARATION AGREEMENT | Document Parties: First National Bank | National Bancshares Corp You are currently viewing:
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First National Bank | National Bancshares Corp

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Title: SPECIAL SEPARATION AGREEMENT
Governing Law: Ohio     Date: 8/14/2007

SPECIAL SEPARATION AGREEMENT, Parties: first national bank , national bancshares corp
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Exhibit 10.6
SPECIAL SEPARATION AGREEMENT
     This SPECIAL SEPARATION AGREEMENT (“Agreement”) is entered into as of this 19 th day of June, 2007, by and between First National Bank (the “Company”) and James R. VanSickle (the “Executive”) and is guaranteed by National Bancshares Corp. (the “Parent Company”).
      WHEREAS , the Executive will be employed by the Company as Senior Vice President and Chief Financial Officer of the Company; and
      WHEREAS , the Company has determined that it is desirable to obtain from the Executive certain protections with respect to non-disclosure, non-interference and non-competition; and
      WHEREAS , the Company has determined that it is desirable to agree at this time to provide the Executive with severance benefits under certain circumstances after a Change in Control has occurred in order that the Executive may more fully focus his current efforts on expanding the Company’s business and profits without concern for his personal security in the event of a Change in Control;
      WHEREAS , the Company and the Executive desire to set forth in a written agreement the terms and provisions of these protections; and
      WHEREAS , the Parent Company desires to guarantee the benefits payable under this Agreement;
      NOW THEREFORE , in consideration of the foregoing, the mutual covenants and agreements set forth in this Agreement, the Company and the Executive agree as follows:

 

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Section 1. Definitions
      1.1 Affiliate . The term “Affiliate” shall mean any entity controlling, controlled by or under common control with the Company, including, but not limited to, divisions and subsidiaries of the Company.
      1.2 Cause . The term “Cause” shall include:
  a.   a breach of the Executive’s obligations under Section 5 hereof; or
 
  b.   the indictment of the Executive for, conviction of the Executive for, or written confession of the Executive to a misdemeanor or felony against the Company or any of its Affiliates, employees or customers, including but not limited to embezzlement or embezzlement of customer account assets, but excluding any such misdemeanor or felony related to an automobile accident.
      1.3 Change in Control . The term “Change in Control” shall include:
  a.   the first purchase of shares pursuant to a tender offer or exchange (other than a tender offer or exchange by the Parent Company) for twenty-five percent (25%) or more of the Parent Company’s common stock of any class and any securities convertible into such common stock;
 
  b.   the receipt by the Parent Company of a Schedule 13D or other advice after the date of execution of this Agreement indicating that a person is the “beneficial owner” (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) of twenty-five percent (25%) or more of the Parent Company’s common stock of any class or any securities convertible in such common stock calculated as provided in paragraph (d) of said Rule 13d-3;
 
  c.   the date of approval by stockholders of the Parent Company of an agreement providing for any consolidation or merger of the Parent Company in which the Parent Company will not be the continuing or surviving corporation or pursuant

 

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      to which shares of capital stock, of any class or any securities convertible into such capital stock, of the Parent Company would be converted into cash, securities, or other property, other than a merger of the Parent Company in which the holders of common stock of all classes of the Parent Company immediately prior to the merger would own in excess of fifty percent (50%) of the common stock of the surviving corporation immediately after the merger;
  d.   the date of the approval by stockholders of the Parent Company of any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Parent Company or the Company;
 
  e.   the adoption of any plan or proposal for the liquidation (but not a partial liquidation) or dissolution of the Company or the Parent Company;
 
  f.   any transaction whereby the Company ceases to be a wholly owned subsidiary of the Parent Company;
 
  g.   any sequence of events whereby the individuals who constitute the Board of Directors of the Parent Company as of the date of this Agreement (“Incumbent Directors”) together with individuals whose election or nomination for election by the Parent Company’s shareholders was approved by a majority of the Incumbent Directors do not constitute at least seventy-five percent (75%) of the then current Board of Directors of the Parent Company; or
 
  h.   such other event as the Outside Committee Members shall, in their sole and absolute discretion, deem to be a “Change in Control.”
      1.4 Company . The term “Company” shall mean First National Bank or any successor corporation or business organization which shall assume the obligations of the Company under Agreement.

 

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      1.5 Confidential Information . The term “Confidential Information” shall mean any and all information (excluding information in the public domain) which relates to the business of the Company and its Affiliates, including without limitation all information relating to the identity and/or location of all past, present and prospective customers of the Company and its Affiliates, strategic plans, financial plans, financial information, computer programs, information concerning pricing and pricing policies, marketing techniques, and methods and manner of operations.
      1.6 Good Reason . The term “Good Reason” shall include:
  a.   any reduction in either the current base salary or the annual bonus of the Executive;
 
  b.   any material reduction in the employee benefits and fringe benefits of the Executive;
 
  c.   any material reduction in the position, office or title of the Executive;
 
  d.   the Executive ceases to have the powers, perquisites, responsibilities or duties commensurate with being the Senior Vice President and Chief Financial Officer of a bank of comparable size to the Company;
 
  e.   the Executive ceases to report to the President and Chief Executive Officer of the Bank; or
 
  f.   the principal place of employment of the Executive is relocated to any location which is outside of a twenty (20) mile radius of the current main office of the Company in Orrville, Ohio.
      1.7 Outside Committee Members . The term “Outside Committee Members” shall mean members of the Executive Committee of the Board of Directors of the Company who are not employees of the Company or an Affiliate; provided, however, that in the event of a Change

 

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in Control, “Outside Committee Members” shall mean those same individuals who were Outside Committee Members immediately prior to such Change in Control.
      1.8 Parent Company . The term “Parent Company” shall mean National Bancshares Corp. or any successor corporation or business organization which shall assume the obligations of the Parent Company under Agreement.
      1.9 Protection Period . The term “Protection Period” shall mean the twenty four (24) month period after a Change in Control occurs.
      1.10 Successor . The term “Successor” will include any person, firm, corporation or business entity which acquires all or substantially all of the assets or succeeds to the business of the Company.
Section 2. Employment Terminations Which Qualify For Severance Benefits
      2.1 Termination by the Company Other Than For Cause . In the event the Company terminates the Executive’s employment within the Protection Period other than for Cause, the Executive will be entitled to receive the Severance Benefits set forth in Section 4 hereof.
      2.2 Voluntary Termination by the Executive With Good Reason . In the event the Executive terminates his employment within the Protection Period with Good Reason, the Executive will be entitled to receive the Severance Benefits set forth in Section 4 hereof. In order to terminate employment in accordance with this Section 2.2, an Executive must give sixty (60) days advance written notice of his impending termination of employment to the Company, specify the reason for such termination in such notice and provide the Company with an opportunity to correct the situation which he feels necessitates his termination of employment with Good Reason under this Section 2.2.
Section 3. Employment Terminations Which Do Not Qualify For Severance Benefits
      3.1 Termination by the Company Outside the Protection Period . In the event the Company terminates the Executive’s employment outside the Protection Period, the Executive

 

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will not be entitled to receive the Severance Benefits set forth in Section 4 hereof. The Executive shall, however, comply with the provisions of Section 5 hereof. The Company may, in its sole discretion, provide some form or amount of severance benefits to the Executive in such circumstances as the Company shall, in its sole discretion, determine.
      3.2 Voluntary Termination by the Executive Outside the Protection Period . In the event the Executive terminates his employment outside the Protection Period, the Executive will not be entitled to receive the Severance Benefits set forth in Section 4 hereof. The Executive shall, however, comply with the provisions of Section 5 hereof.
      3.3 Termination by the Company For Cause . In the event the Company terminates the Executive’s employment for Cause (whether before or after a Change in Control), the Executive will not be entitled to receive the Severance Benefits set forth in Sectio

 
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