RURBANC DATA SERVICES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT FOR JOHN ARANOWICZ
RURBANC
DATA SERVICES, INC.
FOR ▇▇▇▇
▇▇▇▇▇▇▇▇▇
THIS
AGREEMENT is made as of this 25th day of
April, 2009 by and between RURBANC DATA SERVICES, INC., an Ohio corporation
(“RDSI”), and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the “Executive”).
WITNESSETH:
WHEREAS, the Executive is
employed by NHC as its President and Chief Executive Officer; and
WHEREAS, the Merger Agreement
contemplates that RDSI will acquire all of the stock of NHC through the merger
of NC Merger Corp. with and into NHC; and
WHEREAS, in consideration for
the Executive becoming employed by RDSI following the Merger, the Board of
Directors of RDSI desires to provide the Executive with the benefits described
in this Agreement in accordance with the terms and conditions hereinafter set
forth beginning on the Effective Date;
NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT:
ARTICLE
1: DEFINITIONS
For
purposes of this Agreement, the following capitalized words and phrases
(including any form thereof) shall have the following meanings unless another
context clearly requires another meaning:
1.1 ACT. The Securities
Exchange Act of 1934, as amended.
1.2 AFFILIATE. Any
corporation, general or limited partnership, limited liability company, joint
venture, trust, association or organization which is, directly or indirectly,
controlled by, or under common control with, the Employer.
1.3 AGREEMENT. This
Rurbanc Data Services, Inc. Supplemental Executive Retirement Plan Agreement, as
it may be amended from time to time.
1.4 ANNUAL DIRECT
SALARY. The Executive’s annualized base salary based on the
highest base salary rate in effect for any pay period ending with or within the
thirty-six (36) consecutive calendar month period ending on or immediately
before the date on which it is being calculated. Annual Direct Salary
will be determined without including any employee or fringe benefits, bonuses,
incentives or other compensation (other than base salary) paid or earned during
the calculation period.
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1.5 BENEFICIARY. The
person or persons whom the Executive has designated to receive payments pursuant
to this Agreement in the event of his death. If the Executive has not
designated any Beneficiary, the Executive’s estate shall be his
Beneficiary.
1.6 CAUSE. The term
“Cause” shall be defined, for purposes of this Agreement, as the occurrence of
one or more of the following:
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(a)
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The
willful failure by the Executive to substantially perform his duties
hereunder (other than a failure resulting from the Executive’s incapacity
because of death or disability), after notice from the Corporation and
a failure to cure such violation within twenty (20) days of said
notice;
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(b)
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The
willful engaging by the Executive in misconduct injurious to the
Corporation or any Affiliate;
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(c)
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Dishonesty,
insubordination or gross negligence of the Executive in the performance of
his duties;
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(d)
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The
Executive’s breach of fiduciary duty involving personal
profit;
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(e)
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The
Executive’s violation of any law, rule or regulation governing issuers of
publicly traded securities or any regulatory enforcement actions issued by
a regulatory authority against the
Executive;
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(f)
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Conduct
on the part of the Executive which brings public discredit to the
Corporation or any Affiliate and, if the effect may be cured, a failure to
cure within twenty (20) days of the date notice of such conduct is
delivered to the Executive;
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(g)
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The
Executive’s conviction of or plea of guilty or nolo contendere to a felony
(including conviction of or plea of guilty or nolo contendere to a
misdemeanor that was originally charged as a felony but was reduced to a
misdemeanor as a result of a plea bargain), crime of falsehood or a crime
involving moral turpitude, or the actual incarceration of the Executive
for a period of twenty (20) consecutive days or
more;
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(h)
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An
act by the Executive affecting any of the Corporation’s or any Affiliate’s
employees, customers, business associates, contractors or visitors that a
court or governmental authority with jurisdiction over the matter
determines constitutes unlawful discrimination or harassment, or violates
the Corporation’s or any Affiliate’s policy concerning discrimination or
harassment;
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(i)
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The
Executive’s theft or abuse of the Corporation’s or any Affiliate’s
property or the property of the Corporation’s or any Affiliate’s
customers, employees, contractors, vendors or business
associates;
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(j)
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The
direction or recommendation of a state or federal regulatory authority to
remove the Executive from his position(s) with the Corporation or any
Affiliate;
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(k)
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The
Executive’s willful failure to follow the good faith lawful instructions
of the board of directors of the Corporation with regard to the operations
of the Corporation and/or its Affiliates, after written notice and, if the
event may be cured, a failure to cure such violation within twenty (20)
days of the date said notice is delivered to the
Executive;
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(l)
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Material
breach of any contract or agreement that the Executive entered with the
Corporation or any Affiliate, including a breach of any of the obligations
described in Article 4 and, if the breach may be cured, a failure to cure
such breach within twenty (20) days of the date notice of such conduct is
delivered to the Executive; or
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(m)
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Unauthorized
disclosure of the trade secrets or Confidential Information of the
Corporation or any of its Affiliates, trade partners or
vendors.
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However,
Cause will not arise solely because the Executive is absent from active
employment during periods of vacation, consistent with the Corporation’s
applicable policy or other period of absence initiated by the Executive and
approved by the Corporation.
Also, if,
after the Executive terminates employment, the Corporation learns that the
Executive has actively concealed conduct or an event that, if discovered before
employment terminated, would have constituted “Cause,” the provisions of Section
3.3 will be applied retroactively to the date the Executive terminated
employment and the Corporation may recover any and all amounts paid to the
Executive (or to his or her beneficiaries) under this Agreement.
1.7 CHANGE ENTITY. In
the event of a Change of Control, the Corporation and any entity with which the
Corporation effects a Change of Control.
1.8 CHANGE OF
CONTROL. For purposes of this Agreement, the term “Change of
Control” shall mean the earliest of any of the following to occur after the
Merger:
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(a)
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Of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A or any successor rule or regulation
promulgated under the Act;
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(b)
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A
merger or consolidation of RDSI with or purchase of all or substantially
all of RDSI’s assets by another “person” (as such term is defined in
Section 3(a)(9) of the Act and as used in Sections 13(d)(3) and 14(d)(2)
of the Act) and, as a result of such merger, consolidation or sale of
assets, less than a majority of the outstanding voting stock of the
surviving, resulting or purchasing person is owned, immediately after the
transaction, by the holders of the voting stock of RDSI before the
transaction, regardless of when or how their voting stock was
acquired;
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(c)
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Any
“person” (as such term is defined in Section 3(a)(9) of the Act and as
used in Sections 13(d)(3) and 14(d)(2) of the Act) becomes through any
means a “beneficial owner” (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of RDSI representing fifty percent
(50%) or more of the combined voting power of RDSI’s then outstanding
securities eligible to vote for the election of RDSI’s board of
directors;
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(d)
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Any
“person” as defined above, other than the Corporation or the Executive, is
or becomes the “beneficial owner” (as defined in Rule 13d-3 and Rule
13d-5, or any successor rule or regulation, promulgated under the Act),
directly or indirectly, of securities of RDSI which represent twenty-five
percent (25%) or more of the combined voting power of the securities of
RDSI then outstanding but disregarding any securities with respect to
which that acquirer has filed SEC Schedule 13G indicating that the
securities were not acquired and are not held for the purpose of or with
the effect of changing or influencing, directly or indirectly, RDSI’s
management or policies, unless and until that entity or person files SEC
Schedule 13D, at which point this exception will not apply to such
securities, including those previously subject to a SEC Schedule 13G
filing;
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(e)
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Individuals
who, on the Effective Date, constituted the board of directors of RDSI
(the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the members of RDSI’s board of directors; provided that any
person becoming a director subsequent to the Effective Date whose election
or nomination for election was approved by a vote of at least two-thirds
(2/3) of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of RDSI in which such person is named as a
nominee for director, without written objection to such nomination) shall
be an Incumbent Director; and further provided, however, that no
individual elected or nominated as a director of RDSI initially as a
result of an actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than RDSI’s board of
directors shall ever be deemed to be an Incumbent Director;
and
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(f)
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Any
other change of control of RDSI similar in effect to the
foregoing.
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Notwithstanding
any other provision of this Agreement, the Agreement will be administered
without regard to this definition if the Executive acted in concert with any
person or group (as defined above) to effect a Change of Control, other than at
the specific direction of the board of directors of RDSI and/or in his/her
capacity as an employee of RDSI.
1.9 CODE. The Internal
Revenue Code of 1986, as amended.
1.10 CONFIDENTIAL
INFORMATION. Any and all information (other than information
in the public domain) related to the Corporation’s business, including all
processes, inventions, trade secrets, computer programs, technical data,
drawings or designs, information concerning pricing and pricing policies,
marketing techniques, plans and forecasts, new product information, information
concerning methods and manner of operations and information relating to the
identity and location of all past, present and prospective customers and
suppliers.
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1.11 CORPORATION. RDSI
and any of its successors, including the Change Entity.
1.12 DATE OF THE CHANGE OF
CONTROL. The date the first of any of the events described in
Section 1.8 occurs.
1.13 EARLY RETIREMENT
BENEFIT. The annual benefit provided in Section
3.2.
1.14 EFFECTIVE DATE. The
“Effective Date” as set forth in the Merger Agreement.
1.15 EXECUTIVE. ▇▇▇▇
▇▇▇▇▇▇▇▇▇, an individual.
1.16 EXCISE TAXES. The
excise taxes described in Section 4999 of the Code.
1.17 MERGER. The
transaction described in the Merger Agreement pursuant to which NHC will merge
with and into NC Merger Corp.
1.18 MERGER
AGREEMENT. That certain Agreement and Plan of Merger dated as
of April 25, 2009 by and among RDSI, NC Merger Corp. and NHC.
1.19 NHC. New Core
Holdings, Inc., a Florida corporation.
1.20 NON-COMPETITION
AREA. The geographic area of the United States of America, as
may be amended pursuant to Section 4.1(b).
1.21 NON-COMPETITION
PERIOD. The period beginning on the Effective Date and
extending throughout the two (2) year period following the Executive’s
Termination, as may be amended pursuant to Section 4.1(b).
1.22 RDSI. Rurbanc Data
Services, Inc., an Ohio corporation having a place of business at ▇▇▇ ▇▇▇▇▇▇▇
▇▇., Defiance, Ohio.
1.23 RETIREMENT
DATE. Provided that the Executive remains in the continuous
employ of the Corporation, the first December 31st after his sixty-fifth
(65) birthday, unless shortened or extended by action of the board of directors
of RDSI.
1.24 RETIREMENT
BENEFIT. The annual benefit provided in Section
3.1.
1.25 TERMINATES. The
Executive’s “separation from service,” within the meaning of Section 409A of the
Code, from RDSI.
1.26 YEAR OF SERVICE. A year of
employment with the Corporation, as determined by the Corporation in its sole
discretion; provided, however, that for purposes of determining Years of Service
under this Agreement, the Executive shall be credited with his years of
employment with NHC.
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ARTICLE
2: INTENT
2.1 EFFECTIVE
DATE. This Agreement shall become effective on the Effective
Date.
2.2 PARTICIPATION IN OTHER
PLANS. The benefits provided hereunder shall be in addition to
the Executive’s annual salary as determined by the board of directors of the
Corporation, and shall not affect the right of the Executive to participate in
any current or future Corporation retirement plan, group insurance, bonus, or
supplemental compensation arrangement which constitutes a part of the
Corporation’s regular compensation structure.
2.3 FRINGE
BENEFITS. The benefits provided by this Agreement are granted
by the Corporation as a fringe benefit to the Executive and are not part of any
salary reduction plan or an arrangement deferring a bonus or a salary
increase. The Executive has no option to take any current payment or
bonus in lieu of these benefits.
2.4 ACCOUNTING. The
Corporation shall account for the Executive’s benefit under this Agreement using
the regulatory accounting principles of the Corporation’s primary federal
regulator consistent with generally applicable accounting
principles. The Corporation shall establish an unfunded accrued
liability retirement account for the Executive.
2.5 TOP-HAT PLAN. The
Corporation intends that this Agreement be considered an unfunded arrangement
maintained primarily to provide supplemental retirement benefits to the
Executive, as a member of a select group of management or highly compensated
employees of the Corporation for the purposes of the Employee Retirement Income
Security Act of 1974, as amended.
2.6 ADMINISTRATION. RDSI
(or its designee) shall administer the Agreement and shall supervise the
maintenance of such accounts and records as it deems necessary or desirable. In
this capacity, RDSI (or its designee) shall have complete and absolute
discretion to interpret and construe the provisions of this Agreement, to adopt
rules, regulations and procedures consistent therewith, and to make all findings
of fact, correct errors and supply omissions, and decide all disputes with
respect to the rights and obligations of the Executive. The decisions
of RDSI (or its designee), as administrator, shall be final and conclusive with
respect to every question that may arise relating to either the interpretation
or administration of the Agreement, and its decision shall be binding on all
parties and may not be overturned unless determined by a court of appropriate
jurisdiction to be arbitrary and capricious.
ARTICLE
3: BENEFITS
3.1 RETIREMENT
BENEFIT. If the Executive Terminates on or after his
Retirement Date, the Corporation shall pay the Executive a Retirement Benefit
equal to twenty percent (20%) of his Annual Direct Salary. Payment of
the Retirement Benefit shall commence on the first day of the month following
the date of Termination and shall be payable in substantially equal monthly
installments for a period of one hundred eighty (180) months.
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3.2 EARLY RETIREMENT
BENEFIT. If the Executive Terminates prior to his Retirement
Date, provided that the Executive has at least five (5) Years of Service, the
Executive shall be entitled to receive an Early Retirement Benefit based on his
age on the date of Termination equal to the percentage of his Annual Direct
Salary as set forth below:
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Age
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Percentage
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At
least age fifty-five (55) but less than age sixty (60)
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10%
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At
least age sixty (60) but less than age sixty-five (65)
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15%
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Age
sixty-five (65)
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20%
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Payment
of the Early Retirement Benefit shall be made at the same time and in the same
form as described in Section 3.1.
3.3 OTHER TERMINATION OF
EMPLOYMENT. Notwithstanding the foregoing, if the Executive:
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(a)
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Terminates
prior to attaining age fifty-five (55) or Terminates without at least
five (5) Years of Service and prior to his Retirement Date, the
Executive will not be entitled to any benefit under this
Agreement;
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(b)
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Is
Terminated for Cause, the Executive will not be entitled to any benefit
(whether or not vested) under this Agreement;
or
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(c)
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Develops
a permanent disability while employed and prior to attaining age
fifty-five (55) or without at least five (5) Years of Service and prior to
his Retirement Date, the Executive will not be entitled to any benefit
(whether or not vested) under this Agreement. For purposes of
this Agreement, a “permanent disability” shall mean a physical or mental
impairment that renders the Executive incapable of performing the
essential functions of his job, on a full-time basis, even taking into
account any reasonable accommodation required by law, as determined by a
physician who is selected by the agreement of the Executive and the
Corporation, for a period greater than one-hundred eighty (180)
days.
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3.4 EFFECT OF DEATH FOLLOWING
TERMINATION. In the event the Executive dies after Termination
but before all Retirement Benefit or Early Retirement Benefit payments have been
made, the Corporation shall continue making such payments to the Executive’s
Beneficiary.
3.5 DEATH BENEFIT PRIOR TO
TERMINATION.
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(a)
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Death Prior to
Retirement Date. In the event the Executive dies while
actively employed by the Corporation at any time after the Effective Date
but prior to his Retirement Date, and the Executive would have been
eligible to receive an Early Retirement Benefit had he Terminated on the
date of death, the Corporation will pay a death benefit to the Executive’s
Beneficiary equal to the Early Retirement Benefit the Executive would have
received had he Terminated on the date of
death.
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(b)
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Death On or After
Retirement Date. In the event the Executive dies while
actively employed by the Corporation at any time after the Effective Date
and on or after his Retirement Date but prior to his Termination, the
Corporation will pay a death benefit to the Executive’s Beneficiary equal
to the Retirement Benefit as though the Executive Terminated on the date
of death.
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(c)
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Payment of Death
Benefit. Payment of the death benefit described in this
Section 3.5 shall begin on the first day of the first month following the
Executive’s death and shall be in substantially equal monthly installments
for a period of one hundred eighty (180)
months.
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3.6 EFFECT OF CHANGE OF
CONTROL. In the event of a Change of Control, the Executive
shall become entitled to receive a Retirement Benefit upon his Termination
following such Change of Control regardless of his age or Years of Service,
calculated on the basis of the higher of his Annual Direct Salary on the Date of
the Change of Control or on the date of Termination. The benefit
payable pursuant to this Section 3.6 shall be paid following the Executive’s
Termination following the Change of Control as described in Section
3.1.
3.7 SIX-MONTH DISTRIBUTION DELAY FOR
SPECIFIED EMPLOYEES. Notwithstanding anything in this
Agreement to the contrary, in the event that the Executive is a “specified
employee” (as defined in Section 409A of the Code) of the Corporation,
determined pursuant to the Corporation’s policy for identifying specified
employees, on the date of his Termination, no payment on account of the
Executive’s Termination shall be made until the first (1st) day of the seventh
(7th) month following the date of Termination (or, if earlier, the date of his
death). The cumulative amount paid on such day shall include any
payments that could not be made during such period.
ARTICLE
4: COVENANTS
4.1 NON-COMPETITION. In
consideration of the benefits provided under this Agreement:
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(a)
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The
Executive hereby acknowledges and recognizes the highly competitive nature
of the business of the Corporation. Accordingly, in
consideration of the benefits described in this Agreement, during the
Non-Competition Period, the Executive shall
not:
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(i)
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In
the Non-Competition Area, provide financial or executive assistance to any
person, firm, corporation or enterprise engaged in: (1) data or item
processing for the financial services industry; or (2) any other
activity in which the Corporation or any Affiliate engaged at the
beginning of the Non-Competition Period (the “Restricted Activities”);
provided, however, that “Restricted Activities” shall not include
participating in senior management and/or on a board of directors of a
financial institution which does not have an Affiliate that provides data
or item processing to unrelated third parties;
or
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(ii)
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Directly
or indirectly contact, solicit or induce any person, corporation or other
entity who or which is a customer or referral source of the Corporation or
any Affiliate during the term of the Executive’s employment or on the date
of the Executive’s Termination, to become a customer or referral source
for any person or entity engaged in Restricted Activities other than the
Corporation or its Affiliates; or
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(iii)
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Directly
or indirectly solicit, induce or encourage any employee of the Corporation
or any Affiliate, who is employed during the term of the Executive’s
employment or on the date of the Executive’s Termination, to leave the
employ of the Corporation or its Affiliates or to seek, obtain or accept
employment with any person or entity other than the Corporation or its
Affiliates.
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Notwithstanding
anything to the contrary in this Agreement, the Executive may, directly or
indirectly own, solely as a passive investment, securities of any entity engaged
in Restricted Activities which are publicly traded on a national or regional
stock exchange or on the over-the-counter market, if the Executive (A) is
not a controlling person of, or a member of a group which controls, such entity
and (B) does not, directly or indirectly, own 5% or more of any class of
securities of such entity.
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(b)
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It
is expressly understood and agreed that, although the Executive and RDSI
consider the restrictions contained in this Section 4.1 reasonable for the
purpose of preserving for the Corporation, its good will and other
proprietary rights, if a final judicial determination is made by a court
having jurisdiction that the Non-Competition Area, the Non-Competition
Period or any other restriction contained in this Section 4.1 is an
unreasonable or otherwise unenforceable restriction against the Executive,
the provisions of this Section 4.1 shall not be rendered void, but shall
be deemed amended to apply as to such maximum time and territory and to
such other extent as such court may judicially determine or indicate to be
reasonable.
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(c)
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The
existence of any immaterial claim or cause of action of the Executive
against the Corporation, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the
Corporation of this covenant. Conversely, any material breach
of the obligations of the Employer under this Agreement or that certain
Employment Agreement by and between the parties of even date herewith
shall void and terminate this Section 4.1. The Executive agrees
that any breach of the restrictions set forth in this Section 4.1 will
result in irreparable injury to the Corporation for which it will have no
adequate remedy at law and the Corporation shall be entitled to seek
injunctive relief in order to enforce the provisions hereof and/or seek
specific performance and damages.
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4.2 UNAUTHORIZED
DISCLOSURE. During the term of his employment, or at any later
time, the Executive shall not, without the written consent of the board of
directors of the Corporation or a person authorized thereby, knowingly use or
disclose to any person, other than an employee of the Corporation, or a person
to whom disclosure is reasonably necessary or appropriate in connection with the
performance by the Executive of his duties as an executive of the Corporation
any material Confidential Information obtained by him while in the employ of the
Corporation with respect to any of the services, products, improvements,
formulas, designs or styles, processes, customers, customer lists, methods of
business or any business practices of the Corporation, the disclosure
of which could be or will be damaging to the Corporation; provided, however,
that Confidential Information shall not include any information known generally
to the public (other than as a result of unauthorized disclosure by the
Executive or any person with the assistance, consent or direction of the
Executive) or any information of a type not otherwise considered confidential by
persons engaged in the same business or a business similar to that conducted by
the Corporation or any information that must be disclosed as required by
law.
ARTICLE
5: GOLDEN PARACHUTE PROVISIONS
Notwithstanding
any provision in this Agreement to the contrary (other than Sections 6.9 and
6.10 which will apply under the circumstances described in those paragraphs and
below), if, as of the date of the Change of Control, the Change Entity (after
consulting with an independent accounting or compensation consulting company)
ascertains that the compensation and benefits provided to the Executive pursuant
to or under this Agreement (other than the amounts described in Sections 6.9 and
6.10), either alone or when combined with other compensation and benefits
received by the Executive, would constitute “excess parachute payments” within
the meaning of Section 280G of the Code, or the Treasury Regulations promulgated
thereunder, then:
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(a)
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The
relevant provisions of any change of control agreement and/or employment
agreement to which the Corporation and the Executive are parties on the
Date of the Change of Control will apply;
or
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(b)
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If
the Executive and the Corporation are not parties to a change of control
agreement and/or employment agreement on the Date of the Change of
Control, such compensation and benefits shall be (retroactively, if
necessary) reduced to the extent necessary to avoid Excise Taxes, which
reduction shall comply with Section 409A of the
Code. Notwithstanding the foregoing or any other provision of
this Agreement to the contrary, if any portion of the amount herein
payable to the Executive is determined to be non-deductible pursuant to
the Treasury Regulations promulgated under Section 280G of the Code, the
Corporation shall be required only to pay to the Executive the amount
determined to be deductible under Section 280G of the
Code.
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If the
Internal Revenue Service subsequently and finally decides that the amount of
compensation and benefits (including after the reduction applied under this
Article 5) will generate Excise Taxes or a loss of deduction under Section 280G
of the Code with respect to the compensation and benefits (other than those
amounts described in Sections 6.9 and 6.10), the Executive will immediately
remit an additional amount to the Change Entity equal to the difference between
the amount paid (other than those amounts described in Sections 6.9 and 6.10)
and the minimum amount necessary to avoid the imposition of Excise Taxes or a
loss of deduction under Section 280G of the Code. Also, the
Executive agrees to promptly notify the Corporation of an assessment or inquiry
from the Internal Revenue Service relating to payments under this Agreement that
would, if made final, result in imposition of an Excise Tax or a loss of
deduction under Section 280G of the Code and also agrees to cooperate in
resisting any Excise Tax assessment. However, the Corporation will
have complete control over resolution of any claim by the Internal Revenue
Service that might generate an Excise Tax (although it will have no dispositive
power over any other tax matter that may be subject to the same audit) and the
Corporation will bear all costs associated with that effort provided that any
costs paid or reimbursed by the Corporation shall be subject to the following
limitations: (i) the costs eligible for payment shall include any costs arising
during the lifetime of the Executive; (ii) the amount of costs paid during
any taxable year of the Executive may not affect the amount of costs eligible
for payment in any other taxable year of the Executive; (iii) any costs being
paid shall be paid no later than the last day of the Executive’s taxable year
following the year in which they were incurred; and (iv) the right to
payment may not be subject to liquidation or exchange for another
benefit.
ARTICLE
6: MISCELLANEOUS
6.1 RESTRICTIONS ON
FUNDING. The Corporation shall have no obligation to set
aside, earmark, or entrust any specific fund or money with which to pay its
obligation under this Agreement. The Corporation reserves the
absolute right at its sole discretion to either fund the obligations undertaken
by this Agreement or to refrain from funding the same and determine the extent,
nature, and method of such funding.
6.2 GENERAL ASSETS OF THE
CORPORATION. The rights of the Executive under this Agreement
and of any Beneficiary shall be solely those of an unsecured creditor of the
Corporation. If the Corporation shall acquire an insurance policy or
any other asset in connection with the liabilities assumed by it hereunder, it
is expressly understood and agreed that neither the Executive nor any
Beneficiary shall have any right with respect to, or claim against, such policy
or other asset. Such policy or asset shall not be deemed to be held
under any trust for the benefit of the Executive or his Beneficiaries or to be
held in any way as collateral security for the fulfilling of the obligations of
the Corporation under this Agreement. It shall be, and remain, a
general, unpledged, unrestricted asset of the Corporation and the Executive or
any of his Beneficiaries shall not have a greater claim to the insurance policy
or other assets, or any interest in either of them, than any other general
creditor of the Corporation.
6.3 NO EMPLOYMENT CONTRACT. This
Agreement is not an employment contract. Nothing contained herein shall
guarantee or assure the Executive of continued employment by the
Corporation.
6.4 NOTICE. For the purposes of
this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States certified mail, return receipt requested,
postage prepaid, addressed as follows:
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If
to the Executive:
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At
the last address on file with the
Corporation
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If
to the Corporation:
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Rurbanc
Data Services, Inc.
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Attention: Chief
Executive Officer
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▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇
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▇▇▇▇▇▇▇▇,
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or to
such other address as the Executive or the Corporation may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
6.5 SUCCESSORS; BINDING
AGREEMENT. This Agreement shall inure to the benefit of and be
binding upon RDSI, the Corporation and the Executive and their respective
personal representatives, heirs, assigns or successors, provided, however, that
the Executive may not commute, anticipate, encumber, dispose or assign any
payment herein except as may be otherwise specified in this
Agreement.
6.6 SEVERABILITY. If any provision
of this Agreement is declared unenforceable for any reason, the remaining
provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect.
6.7 WAIVER;
AMENDMENT. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and an executive officer specifically
designated by the board of directors of RDSI. No waiver by either party, at any
time, of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement may be amended or canceled only by
mutual agreement of the parties in writing.
6.8 LIMITATION OF DAMAGES FOR BREACH OF
AGREEMENT. In the event of a breach of this Agreement, by
either the Corporation or the Executive, each hereby waives to the fullest
extent permitted by law, the right to assert any claim against the others for
punitive or exemplary damages. Except as provided in Section 6.10, no
party will be entitled to the recovery of attorney’s fees or costs.
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6.9
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ARBITRATION
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(a)
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Resolution of
Disputes. The Corporation and the Executive recognize
that in the event a dispute should arise between them concerning the
interpretation or implementation of this Agreement, lengthy and expensive
litigation will not afford a practical resolution of the issues within a
reasonable period of time. Consequently, each party agrees that
all disputes, disagreements and questions of interpretation concerning
this Agreement, except for any claims brought by the Corporation for
equitable relief or an injunction to enforce the restrictive covenants
contained in Article 4, are to be submitted for resolution, in Defiance
County, Ohio to the American Arbitration Association (the “Association”)
in accordance with the Association’s National Rules for the Resolution of
Employment Disputes or other applicable rules then in effect
(“Rules”). The Corporation or the Executive may initiate an
arbitration proceeding at any time by giving notice to the other in
accordance with the Rules. The Corporation and the Executive
may, as a matter of right, mutually agree on the appointment of a
particular arbitrator from the Association’s pool. The
arbitrator shall not be bound by the rules of evidence and procedure of
the courts of the State of Ohio, but shall be bound by the substantive law
applicable to this Agreement. The decision of the arbitrator,
absent fraud, duress, incompetence or gross and obvious error of fact,
shall be final and binding upon the parties and shall be enforceable in
courts of proper jurisdiction. Following written notice of a
request for arbitration, the Corporation and the Executive shall be
entitled to an injunction restraining all further proceedings in any
pending or subsequently filed litigation concerning this Agreement, except
as otherwise provided herein.
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(b)
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Costs. The
Corporation or the Change Entity will bear all reasonable costs associated
with any dispute arising under this Agreement, including reasonable
accounting and legal fees incurred by the Executive in connection with the
arbitration proceedings just described. Any such payment by the
Corporation shall be subject to the following limitations: (i) the costs
eligible for payment shall include any costs arising during the lifetime
of the Executive; (ii) the amount of costs paid during any taxable year of
the Executive may not affect the amount of costs eligible for payment in
any other taxable year of the Executive; (iii) any costs being paid shall
be paid no later than December 31 of the year following the year in which
they were incurred; and (iv) the right to payment may not be subject to
liquidation or exchange for another
benefit.
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If
otherwise due, payments not being contested under the procedures described in
this section will not be deferred during the pendency of procedures described in
this section.
6.10 LEGAL FEES. The
Corporation or the Change Entity shall pay all reasonable legal, accounting and
actuarial fees and expenses incurred by the Executive in enforcing any right or
benefit provided by this Agreement. If it is subsequently determined
that payment of these fees are excess parachute payments, the Corporation or the
Change Entity will fully gross-up the Executive for the income, wage, employment
and excise taxes associated with that payment so that, after all applicable
federal, state and local, income, wage, employment and excise taxes (plus any
assessed interest and penalties), the Executive will have incurred no liability
(either for these fees or the taxes just listed) with respect to the matters
encompassed in this paragraph. Any payments made pursuant to the
first sentence of this Section 6.10 shall be made as provided in Section
6.9(b). Any gross-up payment under this Section 6.10 shall be paid to
the Executive no later than the end of the Executive’s taxable year next
following the Executive’s taxable year in which the Executive remits the related
taxes.
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6.11 LAW GOVERNING. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Ohio, without regard to its conflicts of law principles.
6.12 VALIDITY. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
6.13 HEADINGS. The
paragraph headings of this Agreement are for convenience only and shall not
control or affect the meaning or construction or limit the scope or intent of
any of the provisions of this Agreement.
6.14 OTHER PROVISIONS.
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(a)
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Except
as expressly provided in this Agreement, the Executive’s right to receive
the payments described in this Agreement will not decrease the amount of,
or otherwise adversely affect, any other benefits payable to the Executive
under any other plan, agreement or
arrangement.
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(b)
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The
Executive is not required to mitigate the amount of any payment described
in this Agreement by seeking other employment or otherwise, nor will the
amount of any payment or benefit provided for in this Agreement be reduced
by any compensation or benefits the Executive earns, or is entitled to
receive, in any capacity after Termination or by reason of the Executive’s
receipt of or right to receive any retirement or other benefits
attributable to employment.
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(c)
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Except
as expressly provided elsewhere in this Agreement, the amount of any
payment made under this Agreement will be reduced by the minimum amounts
the Employer is required to withhold in payment (or in anticipation of
payment) of any income, wage or employment taxes imposed on the
payment.
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(d)
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The
right of the Executive or any other person to receive any amount under
this Agreement may not be assigned, transferred, pledged or encumbered
except by will or by applicable laws of descent and
distribution. Any attempt to assign, transfer, pledge or
encumber any amount that is or may be receivable under this Agreement will
be null and void and of no legal effect. However, this
paragraph will not preclude payment under this Agreement of any benefit to
which a deceased Executive is
entitled.
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(e)
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Subject
to the preceding paragraph (d), this Agreement inures to the benefit
of and may be enforced by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and
legatees.
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6.15
ENTIRE
AGREEMENT. This Agreement supersedes any and all prior
agreements, either oral or in writing, between the parties (including such
agreement with any Affiliate of RDSI) with respect to similar payments and this
Agreement contains all the covenants and agreements between the parties with
respect to same.
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6.16 SECTION 409A. This
Agreement is intended to comply with the requirements of Section 409A of the
Code and, to the maximum extent permitted by law, shall be interpreted,
construed and administered consistent with this intent. Neither RDSI
nor any other person shall have liability in the event this Agreement fails to
comply with the requirements of Section 409A of the Code. Nothing in
this Agreement shall be construed as the guarantee of any particular tax
treatment to the Executive.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have
caused this Agreement to be duly executed in their respective names and, in the
case of the Corporation, by its authorized representatives the day and year
above mentioned.
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RURBANC
DATA SERVICES, INC.
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By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
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Date:
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April 25, 2009
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EXECUTIVE
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Date:
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April 25,
2009
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