Exhibit 10.3
EMPLOYMENT AGREEMENT
     This employment Agreement (this “Agreement”) is made and entered into
between Carl D.Culp (“Culp”) and Farmers National Bank of Canfield, its
affiliates and subsidiaries (the “Bank”), effective as of the last date set
forth below. In consideration of the mutual covenants herein, Culp and the Bank
hereby agree as follows:
     1. Job Title and Duties. Culp will be employed as the Executive Vice
President and Chief Financial Officer of the Bank and will report directly to
the Chief Executive Officer of the Bank. Culp will timely, faithfully and
diligently perform all such duties as are customarily associated with and
incidental to the employment of a Chief Financial Officer within the banking
industry, including all specific duties which may be assigned to him from time
to time by the Bank. Culp understands and agrees that he will have no authority,
express or implied, to perform any acts on behalf of the Bank, except as
specifically outlined in this Agreement. Culp will not engage in any activity
inconsistent with his duties and/or the business objectives of the Bank. Culp
will refrain from conduct or practices harmful to the Bank’s good will, business
reputation, patents, trademarks and service marks.
     2. Compensation. Beginning on October 1, 2008, Culp will be paid a base
salary of U.S. $140,800.00 per annum, payable in twenty-four (24) bi-monthly
installments of $5,866.67 each, less applicable tax withholdings and benefit
deductions. Culp’s base salary will be reviewed on an annual basis, consistent
with the Bank’s normal compensation review practices for executive employees.
Culp will also be eligible to participate in the Executive Management Incentive
Program, according to the same terms and conditions applicable to all other
executive employees of the Bank.
     3. Term. Culp’s employment under this Agreement will commence on October 1,
2008 and will continue for a period of thirty-six (36) months, unless earlier
terminated in accordance with any of the provisions of Paragraph 12 of this
Agreement. The term of this Agreement shall automatically be renewed in 36-month
increments, unless written notice of termination is provided by either party at
least 90 days prior to the expiration of the original term or any 36-month
renewal term.
     4. Compliance with Bank Policies. Culp acknowledges receipt of the Bank’s
Personnel Manual and Code of Ethics. Culp understands and agrees to be bound by
all rules and regulations contained therein, as well as all other written
policies, rules and regulations which may be established by the Bank from time
to time.
     5. Benefit Plans. While employed by the Bank, Culp will be eligible to
participate in all such benefit plans (including, without limitation, medical
and dental plans, disability and life insurance, and 401(K) plans) according to
the same terms and conditions as all other executive employees of the Bank. The
Bank reserves the right to modify, amend or terminate all or part of its
employee benefit plans at any time. If such a change occurs, Culp will receive
notice of the change and an explanation of how the change will affect his
benefit coverage.

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     6. Vacation Benefits. Culp will be eligible for vacation benefits in the
amount of four (4) weeks per year, which may be taken in accordance with the
same terms and conditions as other executive employees of the Bank. There will
be no carryover of unused vacation time from year-to-year. Culp will be paid for
any accrued but unused vacation time remaining at the termination of his
employment, unless his employment is terminated “for cause,” as defined in
Paragraph 12 (B) of this Agreement.
     7. Expense Reimbursement. Culp will receive prompt reimbursement for all
reasonable and necessary expenses incurred in the performance of his duties as
Chief Financial Officer, including mileage, airfare, and reasonable meal and
hotel expenses incurred while traveling on business to locations other than the
Bank’s headquarters in Canfield, Ohio. All such expenses must be documented and
accounted for in accordance with the Bank’s reimbursement policies and
procedures.
     8. Indemnification. To the fullest extent permitted under the applicable
laws of the State of Ohio and federal banking laws, the Bank will indemnify and
hold Culp harmless from any and all expenses, judgments, fines, penalties, and
amounts paid in settlement as a result of his service to, or actions (other than
actions which are determined by a court of competent jurisdiction to be made
without business judgment or outside the scope of his employment) on behalf of,
the Bank.
     9. Stock Option Plan. As an officer of the Bank, Culp will be eligible to
participate in that certain 1999 Stock Option Plan of Farmers National Banc
Corp., the parent of the Bank (the “Company”), as amended, and as the same may
be further amended, modified, or restated from time to time, and any successor
plan, pursuant to which Culp may receive compensation in an amount determined by
the Company in its discretion.
     10. Confidential Information. Culp acknowledges and agrees that he will
not, while employed by the Bank and at all times thereafter, directly or
indirectly communicate or divulge any Confidential Information relating to the
Bank to any other person or business entity. For purposes of this Agreement,
“Confidential Information” shall refer to any proprietary information relating
to the conduct of the business of the Bank, including the Bank’s unique business
methods and compilations of information that has caused or continues to cause
the Bank to enjoy a competitive advantage over companies engaged in the same or
a similar business, including but not limited to the Bank’s methods of
operations, customer relations, customer lists, contacts, confidential price
policies and confidential price characteristics, lists of employees, vendors and
suppliers, confidential information relating to marketing plans, quotations and
contracts, order processing, procedures, purchasing and pricing methods and
procedures, supplies, personnel information, financial data, future business
plans, and the like.
     All records, files, plans, documents and the like relating to the business
of the Bank, including but not limited to Confidential Information which Culp
has or will prepare, use or come into contact with shall remain the sole
property of the Bank, shall not be copied

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without written permission, and shall be returned immediately to the Bank upon
termination of Culp’s employment with the Bank, or at the Bank’s request at any
time. Further, Culp will not directly or indirectly use or disclose to any other
person or business entity the Bank’s secret or Confidential Information without
the prior written consent of an officer of the Bank. Culp further agrees to take
all reasonable precautions to protect against the negligent or inadvertent
disclosure of the Bank’s secret or Confidential Information to any other person
or business entity. If Culp does improperly use or disclose any secret or
Confidential Information, he understands that his employment will be subject to
termination. Culp also recognizes that all writings, illustrations, drawings and
other similar materials that embody or otherwise contain Confidential
Information which he may produce or which may be given to him in connection with
his employment, are the property of the Bank and it shall be Culp’s obligation
to deliver the same to the Bank upon request, and upon termination of his
employment with the Bank for any reason.
     11. Intellectual Property Rights. Culp acknowledges and agrees that any
procedure, design feature, schematic, invention, improvement, development,
discovery, know how, concept, idea or the like (whether or not patentable,
registrable, under copyright or trademark laws, or otherwise protectable under
similar laws) that he may conceive of, suggest, make, invent, develop or
implement during the course of his employment with the Bank (whether
individually or jointly with any other person), relating in any way to the
business of the Bank, and all physical embodiments and manifestations thereof,
and all patent rights, copyrights, trademarks (or application therefore) and
similar protections therein (all of which consists of “Work Product”), shall be
the sole, exclusive and absolute property of the Bank. All such Work Product
shall be deemed to be works for hire and, further, Culp hereby assigns to the
Bank all rights, title and interest in, to and under such Work Product,
including but not limited to, the right to obtain such patents, copyright
registrations, trademark registrations or similar protections as the Bank may
desire to obtain. Culp will immediately disclose all Work Product to the Bank
and agrees, at any time upon the Bank’s request and without additional
compensation, to execute any documents and to otherwise cooperate with the Bank
respecting the perfection of its rights, title and interest in, to and under
such Work Product, and in any litigation or other controversy in connection
therewith, all reasonable expenses incident thereto to be borne by the Bank.
     12. Termination of the Employment Relationship.
          A. “Without Cause” Either party may terminate Culp’s employment
“without cause” at any time and for any reason, provided that 30 days’ advance
written notice is provided to the other party.
          B. “For Cause” The Bank may terminate Culp’s employment without
advance notice “for cause,” which shall mean the occurrence of any one of the
following events: (i) Culp’s commission of any intentional, reckless, or grossly
negligent act which may result in material injury to the good will, business or
business reputation of the Bank; (ii) Culp’s participation in any fraud,
dishonesty, theft, conviction of a crime, or unethical business conduct;
(iii) Culp’s violation of any of the covenants of this Agreement or any

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written policy, rule or regulation of the Bank; or (iv) Culp’s failure to
adequately perform his job duties or to follow lawful and ethical directions
provided to him, which failure has not been cured in all material respects
within twenty (20) days after receiving notice of such failure from the Bank.
          C. “Good Reason” Culp may terminate his employment with fourteen
(14) days advance written notice for “good reason,” which shall mean the
occurrence of any one of the following events: (i) a material diminution of the
duties, authority or responsibilities of his position; (ii) a reduction in his
base salary of more than 20% of the annual rate set forth in Paragraph 2 of this
Agreement; (iii) any change in Culp’s principal place of work which would
increase Culp’s commute by fifty (50) miles or more from Culp’s current
principal place of work; or (iv) a material breach by the Bank of its
obligations under this Agreement, which failure has not been cured in all
material respects within twenty (20) days after receiving written notice of such
failures from Culp.
          D. “Change in Control” Culp may terminate his employment upon a
“change in control” of the Bank, which will be deemed to have occurred if:
(i) any person (as defined in the securities laws) becomes a direct or indirect
beneficial owner of securities of the Bank representing 20% or more of the
combined voting power of the Bank’s then outstanding securities; or (ii) the
Bank is merged or consolidated with another entity, and as a result of such
merger or consolidation, less than 75% of the outstanding voting securities of
the surviving or resulting entity shall be owned in the aggregate by the former
shareholders of the Bank; or (iii) during any two (2) consecutive years during
the term of this Agreement, individuals who at the beginning of such period
constitute the Board, cease for any reason to constitute at least a majority
thereof, unless the election of each director who is not a director at the
beginning of such period has been approved in advance by directors representing
at least two-thirds of the directors at the beginning of the period. A “change
in control” will only be deemed to have occurred if one of the three
above-listed scenarios occurs and, as a result thereof, Culp is not offered a
position that is substantially similar to his position as CFO of the Bank, in
terms of duties, responsibilities, pay and benefits.
          E. “Disability” Culp’s employment with the Bank will automatically
terminate if Culp becomes Totally and Permanently Disabled. For purposes of this
Agreement, Culp will be deemed to be “Totally and Permanently Disabled” if he
is, in the opinion of a majority of the directors of the Bank, unable to fulfill
the responsibilities specified in this Agreement on behalf of the Bank on a
full-time basis for a period of one hundred twenty (120) consecutive days as a
result of a complete and irremediable physical or mental incapacity caused by
disease or bodily injury. In the event of any disagreement as to whether Culp
suffers from a complete and irremediable mental or physical incapacity, he shall
be examined by a physician selected by the mutual agreement of Culp and a
majority of the Bank’s board of directors and the determination of such
physician will be final and binding on all parties.
          F. “Death” Culp’s employment will terminate upon his death.

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     13. Severance Pay.
          A. Following the termination of Culp’s employment by the Bank “without
cause,” by him for “good reason,” or due to a “change in control” as defined in
Paragraph 12(A), (C) and (D) above, Culp will receive (i) a lump sum payment
payable within thirty (30) days of termination equal to any unused vacation
time, (ii) seventy-two (72) bi-monthly severance installment payments equal to
the greater of (A) $5,866.67each, or (B) 1/24 of Culp’s highest annual salary in
effect within twelve (12) months of Culp’s termination, less appropriate
withholding (the “Severance Payments”), and (iii) participation in the Executive
Management Incentive Program or any other similar program then in effect on a
pro-rata basis for the portion of the incentive period preceding termination.
          B. The provision of Severance Payments will be contingent upon Culp’s
execution of a general release and waiver agreement in a form that is reasonably
satisfactory to the Bank.
          C. Culp will not be entitled to any Severance Payments if his
employment is terminated by the Bank “for cause,” by him “without cause,” or due
to “disability” or “death,” as defined in Paragraph 12(A), (B), (E) and
(F) above; however, upon Culp’s termination for disability or death he or his
estate will be entitled to receive a lump sum payment for any unused vacation
time and participation in the Executive Management Incentive Program or any
other similar program then in effect on a pro-rata basis for the portion of the
incentive period preceding termination.
          D. In the event that Culp holds a Board position at the time of
termination, then Culp shall immediately resign from that position.
     14. Post-Employment Restrictions.
          A. Definition of “the Business”. The Business of the Bank includes,
but is not limited to, the business of providing financial, banking, insurance,
investment, personal and commercial lending, internet cash management and other
similar services to individuals and companies.
          B. Non-Competition. Following the termination of employment by him or
the Bank for any reason whatsoever, Culp will not, for a period of twelve
(12) consecutive months after the date of termination, directly or indirectly,
as owner, partner, joint venturer, stockholder (excluding the ownership of
publicly-traded securities where such ownership does not exceed 1% of such
securities outstanding), employee, officer, director, agent, principal, trustee
or any other business capacity whatsoever, engage in, become financially
interested in, become employed by, render any consulting or business advice with
respect to, or have any other connection with, any person or business entity
engaged in the same Business as the Bank in any county where the Bank maintains
a branch or loan production office at the time of termination of Culp’s
employment. The provisions of this Paragraph 14(B) will not apply in the event
that the Bank terminates Culp’s employment at the

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end of the initial term or any renewal term, in accordance with the provisions
of Paragraph 3 of this Agreement.
          C. Non-Solicitation Customers. Following the termination of Culp’s
employment by him or the Bank for any reason whatsoever, Culp will not, for a
period of twelve (12) consecutive months after the date of termination, directly
or indirectly solicit business from any customers, clients or business patrons
of the Bank who were customers, clients or business patrons of the Bank at the
time of termination of Culp’s employment.
          D. Non-Solicitation of Employees. Following the termination of Culp’s
employment by him or the Bank for any reason whatsoever, Culp will not, for a
period of twenty-four (24) consecutive months after the date of termination,
directly or indirectly employ or attempt to employ or solicit for employment any
other individual who is employed by the Bank at the time of termination of
Culp’s employment.
     15. No Waiver. The failure of the Bank to enforce any provision of this
Agreement shall not be construed as a waiver of such provision or of the right
of the Bank thereafter to enforce any other provision of this Agreement.
     16. No Third-Party Obligations. Culp warrants and represents to the Bank
that he is not a party to any agreement or understanding with any third party
which would preclude or prevent him from legally performing any of his
obligations under this Agreement.
     17. Assignability. This Agreement is not assignable by either party without
the prior written consent of the other, except that the Bank may assign this
Agreement without prior written consent to any purchaser, assignee of, or
successor to substantially all of the business or assets of the Bank, or any
direct or indirect subsidiary or affiliate of the Bank.
     18. Arbitration. Except as set forth in Paragraph 19 of this Agreement, any
controversy or dispute which arises in connection with the validity,
construction, application, enforcement or breach of this Agreement shall be
submitted to final and binding arbitration pursuant to the commercial
arbitration rules of the American Arbitration Association (the “AAA”). The fees
and costs of arbitration (other than attorney fees and costs) shall be borne
equally by the parties. A neutral arbitrator shall be jointly chosen by the
parties from a list of arbitrators provided by the AAA, and any arbitration
under this Paragraph 18 shall take place in the Cleveland, Ohio office of the
AAA. Judgment upon an award rendered by an arbitrator under this Paragraph 18
may be entered in any court of competent jurisdiction.
     19. Injunctive Relief and Other Remedies. Culp recognizes and understands
that the Bank may not have an adequate remedy at law for the breach or
threatened breach by Culp of the confidentiality, intellectual property and
post-employment restrictions set forth in this Agreement and Culp agrees that in
the event of any such breach, the Bank may, in addition to the other remedies
which may be available to it, file a suit to enjoin Culp from violation and
breach of this Agreement. In the event the Bank obtains a permanent

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injunction against him after notice and the opportunity to appear, Culp will be
liable to pay all costs, including reasonable attorneys’ fees, which the Bank
may incur in enforcing, to any extent, the provisions of this Agreement, whether
or not litigation is actually commenced and including litigation of any appeal
taken or defended by the Bank in any action to enforce this Agreement and which
affirms and/or results in a permanent injunction. Any proceedings brought to
enforce Paragraphs 10, 11 or 14 this Agreement shall be brought in the courts of
Mahoning County, Ohio and Culp expressly waives any objection or defense
relating to jurisdiction or forum non-conveniens or similar doctrine or theory.
Culp acknowledges and agrees that the remedy at law for any breach of Paragraphs
10, 11 or 14 of this Agreement will be inadequate, and that the Bank shall be
entitled to injunctive relief without bond. Such injunctive relief shall not be
exclusive, but shall be in addition to any other rights or remedies which the
Bank may have for any such breach. In addition to the injunctive remedies
described herein, Culp acknowledges and agrees that in the event of a final
judicial determination against Culp with respect to an actual or threatened
breach by him of Paragraphs 10, 11 or 14 of this Agreement, the Bank shall be
entitled to withhold any remaining Severance Payments payable under Paragraph 13
of this Agreement.
     20. Choice of Law. It is understood that the provisions of this Agreement
shall be governed by and construed in accordance with the laws of the State of
Ohio without giving effect to the principles of conflict of laws.
     21. Severability. It is understood that the provisions of this Agreement
are severable and independent. In the event any of the provisions or parts
hereof shall be held to be invalid or unenforceable, all other provisions shall
remain in full force and effect. In the event a court should determine not to
enforce a covenant as written due to overbreadth, the parties specifically agree
that said covenant shall be enforced to the maximum extent as allowed by law,
whether said restrictions are in time, territory or scope of prohibited
activities.
     22. Legal Reformation. It is understood and agreed that, should any term of
this Agreement cause the Bank or its successor to be in violation of any
applicable securities law, rule or regulation, or any amendment thereto, then
the .parties will cooperate in good faith to amend the terms of this Agreement
as may be required to comply with such securities laws, rules or regulations.
     23. Notice. All written communications provided for in this Agreement shall
be deemed to have been duly served when delivered by U.S. registered mail,
return receipt requested, postage prepaid, to the following addresses:
Carl D. Culp
41 Shawnee Drive
Girard, Ohio 44420

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Farmers National Bank of Canfield
20 South Broad Street
Canfield, Ohio 44406
Attn: Frank L. Paden
     24. Complete Agreement. This Agreement contains the complete understanding
of the parties, and supersedes any previous agreements. Any modifications,
amendments or other changes must be in writing and signed by the parties.
     25. Full Understanding and Consent. Culp hereby represents that, prior to
signing this Agreement, he has read, fully understands and voluntarily agrees to
the terms and conditions stated above, that he was not coerced into signing this
Agreement, that he was not under duress at the time he signed this Agreement,
and that prior to signing this Agreement, he had adequate time to consider and
discuss its terms with an attorney of his choice.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date(s) set forth below.

         
/s/ Carl D. Culp
 
CARL D. CULP
  /s/ James R. Fisher
 
JAMES R. FISHER    
December 23, 2008
  Compensation Committee Chairman of the BOD    
 
  December 23, 2008    

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