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:
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a. |
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a breach of the Executive’s obligations under
Section 5 hereof; or |
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b. |
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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:
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a. |
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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; |
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b. |
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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; |
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c. |
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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; |
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d. |
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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; |
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e. |
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the adoption of any plan or proposal for the liquidation (but
not a partial liquidation) or dissolution of the Company or the
Parent Company; |
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f. |
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any transaction whereby the Company ceases to be a wholly owned
subsidiary of the Parent Company; |
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g. |
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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 |
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h. |
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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:
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a. |
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any reduction in either the current base salary or the annual
bonus of the Executive; |
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b. |
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any material reduction in the employee benefits and fringe
benefits of the Executive; |
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c. |
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any material reduction in the position, office or title of the
Executive; |
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d. |
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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; |
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e. |
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the Executive ceases to report to the President and Chief
Executive Officer of the Bank; or |
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f. |
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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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