Exhibit 10.36

 

CHANGE OF CONTROL AND NON-COMPETE AGREEMENT

 

THIS CHANGE OF CONTROL AND NON-COMPETE AGREEMENT (this "Agreement") is entered
into as of the 13 day of September 2001, by and between First Defiance Financial
Corp. (the “Company”), an Ohio corporation and thrift holding company, and
Dennis E. Rose, Jr., an individual (the "Employee")

 

WITNESSETH:

 

WHEREAS, the Employee has been employed by the Company since 1996;

 

WHEREAS, as a result of the skill, knowledge and experience of the Employee, the
Company believes it is in the best interest of the Company to provide the
Employee with a sense of security to encourage the Employee to remain an
employee of the Company;

 

WHEREAS, the Company and the Employee desire to enter into this Agreement to set
forth their understanding as to their respective rights and obligations in the
event of the termination of Employee’s employment under the circumstances set
forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the Company and the Employee hereby agree as follows:

 

1.          Term. The term of this Agreement shall commence on September 13,
2001, and shall end December 31, 2002, subject to extension and to earlier
termination as provided herein (the "Term"). Prior to each anniversary of the
date of this Agreement, the Board of Directors of the Company shall review the
performance of the Employee. In connection with such annual review, the Term of
this Agreement may be extended for a one-year period beyond the then-effective
expiration date, provided the Board of Directors of the Company, in its sole
discretion, determines in a duly adopted resolution that this Agreement should
be extended.

 

2.          Termination of Employment.

 

(a)          Termination by the Company in Connection with a Change of Control.
In the event that the employment of the Employee is terminated by the Company,
or its successors or assigns, at any time during the Term for any reason other
than Just Cause within six months prior to a Change of Control (hereinafter
defined) or within one year after a Change of Control, then the following shall
occur:

 

(i)          The Company shall promptly pay to the Employee or to his
beneficiaries, dependents or estate an amount equal to the Employee’s base
salary as most recently set prior to the occurrence of the Change of Control;

 

 

 

 

(ii)         The Company shall pay the premiums required to maintain coverage
for the Employee and his eligible dependents under the health insurance plan of
the Employer in which the Employee is a participant immediately prior to the
Change of Control of the Company in accordance with the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, until the earliest of (A) the
first anniversary of the termination of the Employee's employment or (B) the
date on which the Employee is included in another employer's health insurance
plan as a full-time employee; and

 

(iii)        The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall any amounts received from other employment or otherwise by the
Employee offset in any manner the obligations of the Company hereunder, except
as specifically stated in clause (ii) above.

 

For purposes of this Agreement, the term "Just Cause" means the Employee's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure or refusal to perform the duties
and responsibilities assigned to the Employee, willful violation of any law,
rule, regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or conviction of a felony or for fraud or embezzlement.

 

(b)          Termination by the Employee in Connection with a Change of Control.
The Employee may voluntarily terminate the Employee's employment pursuant to
this Agreement within twelve months following a Change of Control and shall be
entitled to compensation as set forth in Section 2(a) of this Agreement in the
event that:

 

(i)          The capacity or circumstances in which the Employee was employed
immediately prior to the Change of Control are materially and adversely changed,
in the reasonable opinion of the Employee (including, without limitation, a
reduction in responsibilities or authority, the assignment of duties or
responsibilities substantially inconsistent with those normally associated with
the position held by the Employee immediately prior to the occurrence of the
Change of Control, or a reduction in salary);

 

(ii)         The Employee is required to move his personal residence, or perform
the Employee's principal duties, more than thirty-five (35) miles from the
Employee's primary office immediately prior to the occurrence of the Change of
Control; or

 

(iii)        The Company otherwise breaches this Agreement in any material
respect.

 

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In the event that payments pursuant to this Agreement, or any other payments are
made by the Company to the Employee which would constitute a "parachute payment"
within the meaning of Section 280G(b)(3) of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder ("Section 280G"), or
would result in the imposition of a penalty tax pursuant to Section 280G, such
payments shall be reduced to the maximum amount which may be paid under Section
280G without exceeding such limits. In the event a reduction in payments is
necessary in order to comply with the requirements of this Agreement relating to
the limitations of Section 280G or applicable OTS limits, the Employee may
determine, in his sole discretion, which categories of payments are to be
reduced or eliminated.

 

(c)          Death of the Employee. This Agreement shall automatically terminate
upon the death of the Employee.

 

(d)         “Golden Parachute” Provision. Any payments made to the Employee
pursuant to this Agreement or otherwise are subject to and conditioned upon
compliance with 12 U.S.C. §1828(k) and any regulations promulgated thereunder.

 

(e)          Definition of “Change of Control”. A “Change of Control” shall mean
any one of the following events: (i) the acquisition by any person of ownership
or power to vote more than 25% of the voting stock of the Company (ii) the
acquisition by any person of the ability to control the election of a majority
of the directors of the Company; (iii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Company cease for any reason to constitute at least a majority
thereof; provided, however, that any individual whose election or nomination for
election as a member of the Board of Directors of the Company was approved by a
vote of at least two-thirds of the directors then in office shall be considered
to have continued to be a member of the Board of Directors of the Company or
(iv) the acquisition by any person or entity of “conclusive control” of the
Company within the meaning of 12 C.F.R. §574.4(a), or the acquisition by any
person or entity of “rebuttable control” within the meaning of 12 C.F.R.
§574.4(b) that has not been rebutted in accordance with 12 C.F.R. §574.4(c). For
purposes of this paragraph, the term “person” refers to an individual or
corporation, partnership, trust, association, or other organization, but does
not include the Employee and any person or persons with whom the Employee is
"acting in concert" within the meaning of 12 C.F.R. Part 574. Notwithstanding
the foregoing, a reorganization or restructuring which results in the Company or
any subsidiary of the Company continuing to hold at least 50% of the ownership
interests of the Company shall not constitute a Change of Control for purposes
of this Agreement.

 

3.          Confidential Information. The Employee acknowledges that the
Employee has learned and has access to confidential information regarding the
Company and its customers and businesses. The Employee agrees and covenants not
to disclose or use for the Employee's own benefit, or the benefit of any other
person or entity, any confidential information, unless or until the Company
consents to such disclosure or use or such information becomes common knowledge
in the industry or is otherwise legally in the public domain. The Employee shall
not knowingly disclose or reveal to any unauthorized person any confidential
information relating to the Company, its parent, subsidiaries or affiliates, or
to any of the businesses operated by them, and the Employee confirms that such
information constitutes the exclusive property of the Company. The Employee
shall not otherwise knowingly act (a) to the material detriment of the Company,
its subsidiaries, or affiliates, or (b) in a manner which is inimical or
contrary to the interests of the Company.

 

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4.          Nonassignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Employee, the Employee's beneficiaries or
legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 4 shall preclude (a) the Employee from
designating a beneficiary to receive any benefits which were payable hereunder
prior to the Employee’s death, or (b) the executors, administrators, or other
legal representatives of the Employee or the Employee's estate from assigning
any rights hereunder to the person or persons entitled thereto.

 

5.          Non-compete Provisions. If the Employee terminates his employment
with the Company for any reason other than in accordance with Section 2(b) of
this Agreement, the Employee agrees that, for a period of 12 months following
the termination of the Employee's employment, the Employee shall not (i) either
as principal, agent, owner, shareholder or investor of more than 3% of the
stock, officer, director, partner, lender, independent contractor, consultant or
in any other capacity, engage in, have a financial interest in or be in any way
connected or affiliated with, or render advice or services to, any person or
entity that engages in any activity which would compete in any way with the
business operated by the Company in the counties where they do business, or (ii)
directly or indirectly, solicit, divert, take away or interfere with, or attempt
to solicit, divert, take away or interfere with, the relationship of the Company
or any of their subsidiaries with any person or entity who is or was a customer,
or employee or supplier of the Company or any of their subsidiaries immediately
prior to the date of termination. Notwithstanding the foregoing, nothing
contained herein shall prevent the Employee from engaging directly or indirectly
in any banking or financial industry business in a county or counties in which
the Company is doing business if the only activity conducted in such county or
counties is the servicing of loans.

 

The parties hereto acknowledge and agree that the duration and area for which
the covenant not to compete and other covenants set forth in this Agreement are
to be effective are fair and reasonable and are reasonably required for the
protection of the Companies. In the event that any court determines that the
time period or the area, or both of them, are unreasonable as to any covenant
and that such covenant is to that extent unenforceable, the parties hereto agree
that the covenant shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it unenforceable.

 

6.          No Attachment. Except as required by law, no right to receive
payment under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy, or similar process of assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.

 

7.          Binding Agreement. This Agreement shall be binding upon, and inure
to the benefit of, the Employee and the Company and their respective permitted
successors and assigns.

 

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8.          Amendment of Agreement. This Agreement may not be modified or
amended, except by an instrument in writing signed by the parties hereto.

 

9.          Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver, unless specifically stated therein, and each waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.

 

10.          Severability. If, for any reason, any provision of this Agreement
is held invalid, such invalidity shall not affect the other provisions of this
Agreement not held so invalid, and each such other provision shall, to the full
extent consistent with applicable law, continue in full force and effect.

 

11.         Headings. The headings of the paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

 

12.         Governing Law; Regulatory Authority. This Agreement has been
executed and delivered in the State of Ohio and its validity, interpretation,
performance and enforcement shall be governed by the laws of the State of Ohio,
except to the extent that federal law is governing. If this Agreement conflicts
with any applicable federal law as now or hereafter in effect, then federal law
shall govern.

 

13.         Effect of Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and supersedes any prior employment
agreement between the Company or any predecessor of the Company and the
Employee.

 

14.         Notices. Any notice or other communication required or permitted
pursuant to this Agreement shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:

 

If to the Company:

 

First Defiance Financial Corp.

601 Clinton St.

Defiance, OH 43512

 

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If to the Employee:

 

Dennis E. Rose, Jr.

14169 Karnes Rd.

Defiance, OH 43512

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Employee has signed this Agreement, each as of
the day and year first above written.

 

Attest:   FIRST DEFIANCE FINANCIAL CORP.         [tsig.jpg]   By /s/ William J.
Small       William J. Small       Chairman of the Board of Directors          
  EMPLOYEE             /s/ Dennis E. Rose, Jr.     Dennis E. Rose, Jr.

 

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