EMPLOYMENT AGREEMENT

THIS AGREEMENT, effective as of July 22, 2002 (the “Effective Date”), by and
between Exchange Bancshares, Inc., a holding company organized under the laws of
the State of Ohio and registered under the Bank Holding Company Act of 1956
(“Holding Company”), and Jeffery A. Robb, a resident of Ohio (“Employee”).

W I T N E S S E T H:

WHEREAS, Holding Company is an Ohio corporation duly organized and validly
existing under the laws of the State of Ohio and parent of The Exchange Bank, an
Ohio state-chartered bank, its operating subsidiary (the “Bank”) engages in
banking activities as a wholly owned subsidiary of Holding Company;

WHEREAS, Employee has knowledge, experience and expertise in the area of
business of Holding Company, and Holding Company wishes to obtain the benefits
of Employee’s knowledge, experience and expertise;

WHEREAS, Holding Company desires to employ Employee on the terms and subject to
the conditions set forth herein and subject to determinations of safety,
soundness and fairness of Holding Company’s regulatory entities, and Employee is
willing to accept employment on such terms and conditions; and

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties, intending to be legally bound,
agree as follows:

1.

Employment.

1.1

Position.  On the terms and subject to the conditions set forth in this
Agreement, Holding Company shall employ Employee to serve as President and Chief
Executive Officer of Holding Company.  Employee shall perform all duties
commensurate with such positions and shall serve at the pleasure and direction
of the Board of Directors of Holding Company (the “Board”).  Employee shall also
serve as a director of Holding Company during the term of this Agreement and
shall perform all duties and receive all benefits commensurate with such
position; provided, however in the event this Agreement is terminated for any
reason whatsoever, Employee agrees to immediately resign as director of the
Holding Company.

1.2

Board Reporting & Job Description. Employee is to exercise such authority and
perform such duties as are commensurate with the authority of the positions as
detailed in a written job description attached hereto as Exhibit 1.2 and will
report directly to the Board.  Such services shall be performed in the same
metropolitan area where the Holding Company has offices, or at such other
location as the Holding Company and Employee may reasonably agree; provided that
the Employee shall not be required to relocate to a location which the Employee
determines is unreasonable in light of the employee’s personal or family
circumstances.

2.

Compensation.

2.1

Base Salary.  As consideration for Employee’s services as an employee hereunder,
Bank agrees to pay Employee, and Employee agrees to accept, a base salary of
$500 per diem, which is anticipated to be $52,000 annually (“Base Salary”), with
increases as the Board of Directors, in its discretion, may make at any time and
from time to time.  The Base Salary, as so determined, shall be payable in equal
bi-weekly installments.  It is further understood and agreed that during the
term of Employee’s status as an employee, Employee shall be subject to the
withholding of taxes as required by law. During the term of employment
contemplated by this Agreement, the Employee shall receive employee benefits
(including, but not limited to, medical/dental insurance, disability insurance,
life insurance, retirement plans, vacations, and holidays) on the same basis as
other employees and other perquisites (including expense reimbursement,
automobile, etc) as determined by the Board.  In addition, Employee shall be
entitled to board of director meeting fees and board committee meeting fees for
his participation on the Holding Company and Bank boards.

2.2

Bonus.  Employee may be eligible to receive an annual bonus in an amount to be
determined by the Board from time to time.  The Bonus shall be paid to Employee
within ninety (90) days after the end of the period during which the Bonus is
earned.

2.3

Benefits.  Employee shall be entitled to participate in any insurance or other
benefit plans now or hereafter provided or made available to employees of
Holding Company generally; provided, however that nothing contained in this
Agreement shall require Bank to establish, maintain or continue any such
benefits already in existence or hereafter adopted for employees of Holding
Company.  

2.4

Vacation.  Employee shall be entitled to annual vacation and leave time of four
weeks at full pay.  Unused vacation time shall be treated pursuant to Holding
Company policy.

2.5

Salary Continuation.  Employee shall be entitled to participate in a salary
continuation plan pursuant to Holding Company policy.

3.

Term and Termination.

3.1

Term.  Employee shall be employed for an initial term commencing on the
Effective Date hereof, and ending at the 2004 Annual Meeting of Shareholders,
unless sooner terminated in accordance with the provisions of this Agreement.  

3.2

Termination.

(a)

Death or Disability.  If Employee dies or becomes disabled to the extent that
Employee cannot perform his duties under this Agreement for a period of more
than ninety (90) consecutive days (the “Disability Period”), this Agreement
shall cease and terminate on the date of Employee’s death or conclusion of the
Disability Period, as applicable, and Employee shall be entitled to receive any
Base Salary and benefits earned through Employee’s date of death or disability.

(b)

Retirement.  Upon Employee’s retirement from the Holding Company at such time as
is normal and expected for employee retirement from the Holding Company, this
Agreement shall cease and terminate as of the date of retirement, and Employee
shall be entitled to receive only Base Salary and benefits earned through the
date of retirement.

(c)

Termination for Cause.  If this Agreement is terminated by Holding Company for
Cause (as defined herein), this Agreement shall cease and terminate as of the
date of termination of Employee.  “Cause” shall be defined as (i) commission of
a willful act of dishonesty in the course of Employee’s duties hereunder;  (ii)
conviction by a court of competent jurisdiction of a crime constituting a felony
or conviction with respect to any act involving fraud or dishonesty; (iii)
Employee’s continued, habitual intoxication or performance under the influence
of controlled substances during working hours, after Holding Company shall have
provided written notice to Employee and given Employee ten (10) days within
which to commence rehabilitation with respect thereto, and Employee shall have
failed to promptly commence and diligently continue such rehabilitation; (iv)
frequent or extended, and unjustifiable (not as a result of incapacity or
disability) absenteeism which shall not have been cured within thirty (30) days
after Holding Company shall have advised Employee in writing of its intention to
terminate Employee’s employment in accordance with the provisions of this
subsection in the event such condition shall not have been cured; or (v)
Employee’s willful and continued personal misconduct, action, inaction,
inability or refusal to perform the duties and responsibilities described in
this Agreement and any Exhibits hereto, if (A) Holding Company shall have given
Employee prior written notice of the reason therefor and (B) a period of thirty
(30) days following receipt by Employee of such notice shall have lapsed and the
matters which constitute or give rise to such Cause shall not have been cured or
eliminated by Employee; provided, however, that if such matters are of a nature
that same cannot be cured or eliminated within such thirty (30) day period, such
period shall be extended for so long as Employee shall be endeavoring diligently
and in good faith to cure or eliminate such matters.

3.3

Termination Without Cause.  Holding Company may terminate Employee’s employment
at any time without Cause, by giving thirty (30) days advance notice in writing
to Employee.

3.4

Employee’s Rights Upon Termination.  In the event that this Agreement is
terminated by Holding Company for Cause, Employee shall receive all Base Salary
and benefits earned through Employee’s final day of employment.  In the event
that this Agreement is terminated by Bank without Cause, Employee shall receive
all Base Salary and benefits earned through Employee’s final day of employment.
 Any earned but unpaid Base Salary and benefits shall be paid to Employee within
thirty (30) days of Employee’s final day of employment.  Upon termination for
any reason, Employee shall be required to deliver to Holding Company and Bank
any Holding Company or Bank assets.  Employee’s rights upon termination shall be
subject to determinations of safety, soundness and fairness of any and all of
the Holding Company’s or Bank’s regulatory entities.

4.

Change in Control.

4.1

Change in Control.  Upon the occurrence of a Change in Control and for a period
of 120 days thereafter, or in the event that during the 120 days prior to a
Change in Control, Employee’s employment is involuntarily terminated by the Bank
for any reason other than Cause, the Bank shall provide Change in Control
benefits to Employee as set forth below.  A “Change in Control” for the purposes
of this Agreement shall mean (i) the consolidation, merger or other business
combination of the Bank or Holding Company wherein the Bank or the Holding
Company is not the surviving entity, or (ii) the transfer of all or
substantially all of the assets of the Bank or the Holding Company to a third
party.

4.2

Change in Control Benefits.    The Change in Control benefits that Employee may
be entitled to receive in accordance with the provisions hereof are as follows:

(a)

Employee shall receive a cash payment equal to 2.99 times Employee’s effective
annual Base Salary determined as of the effective date of the Change in Control.
 This amount shall be paid to Employee in monthly installments or on such other
schedule as the Holding Company shall elect.

(b)

The Holding Company shall provide to Employee continued coverage for one (1)
year under a health plan with benefits the same or similar to those Employee had
with Holding Company prior to the Change in Control.

4.3

Tax Obligations. In the event that any payment or other benefit which Employee
receives from Bank (either under this Agreement or otherwise) constitutes an
“excess parachute payment” as defined for the purposes of Section 280G(b)(1) of
the Internal Revenue Code of 1986, as amended (the “Code”), then Employee shall
receive an additional cash payment (the “Gross-up Payment”) from Bank.  The
amount of such Gross-up Payment shall be equal to the total amount of additional
tax obligations imposed upon Employee as the result of any excess parachute
payment.  For this purpose, such tax obligations shall include, without
limitation, the amount of any excise tax imposed by Section 4999 of the Code and
any Federal, state and local income taxes attributable to the Gross-up Payment,
but shall not include Federal, state or local income tax on amounts paid
hereunder other than the Gross-up Payment.

4.4

Mitigation of Benefits.  Employee shall not be required to mitigate the amount
of any paid Change in Control Benefit by seeking other employment or otherwise,
nor shall the amount of any Change in Control Benefit be reduced by any
compensation earned by Employee as the result of employment by another employer,
by retirement benefits, by offset against any amount claimed to be owed by
Employee to Holding Company or for any other reason.

5.

Confidential Information and Property of Holding Company.

5.1

Confidential Information.  Employee acknowledges and agrees that in connection
with his employment by Holding Company, Employee will have access to certain
confidential and proprietary information owned by and related to Bank and
Holding Company.  For purposes of this Agreement, “Confidential Information”
means any proprietary information of or related to Bank and Holding Company,
including but not limited to: (i) operations manuals and guidelines, marketing
manuals and plans, and business strategies, techniques and methodologies; (ii)
financial information, including information set forth in internal records,
files and ledgers, or incorporated in profit and loss statements, fiscal
reports, sales reports  and business plans; (iii) any and all active prospective
mergers or acquisitions of Bank or Holding Company, and all financial data,
pricing terms, information memoranda and due diligence reports relating thereto;
(iv) all internal memoranda and other office records, including electronic and
data processing files and records; and (v) any other information constituting a
trade secret under governing trade secrets law.

5.2

Exceptions.  Notwithstanding the foregoing, Confidential Information does not
include any of the foregoing that is of general public knowledge or is received
in good faith from a third party having the right to disclose it, who, to the
best of Employee’s knowledge, did not obtain such information from Bank or
Holding Company and who imposes no obligation of secrecy on Employee with
respect to such information.

5.3

Non-Disclosure of Confidential Information.  Employee shall not at any time
willfully use, disclose or divulge any such Confidential Information to any
person, firm or corporation, except: (i) in connection with the discharge of his
duties hereunder; (ii) with the prior written consent of Bank or Holding
Company, which consent may be withheld in Bank’s or Holding Company’s sole
discretion; or (iii) to the extent necessary to comply with law or the valid
order of a court of competent jurisdiction, in which event Employee shall notify
Bank or Holding Company as promptly as practicable and, if possible, prior to
making such disclosure.  Employee shall use his best efforts to prevent any such
disclosure by others.

6.

Arbitration.  Any dispute or controversy arising under or in connection with
this Agreement, including but not limited to any dispute or controversy arising
under this Agreement, shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators, in Toledo, Ohio, in accordance with the
rules of the American Arbitration Association then in effect.  The panel of
arbitrators shall be determined as follows:  Holding Company will choose one
arbitrator, Employee will choose one arbitrator, and the third person will be
chosen by the two arbitrators chosen by Employee and Holding Company.  Judgment
may be entered on the arbitrator’s award in any court having jurisdiction;
provided, however, that Holding Company shall be entitled to seek a restraining
order or injunction in any court of competent jurisdiction to prevent any
violation of provisions contained herein, and Employee hereby consents that such
restraining order or injunction may be granted without the necessity of Holding
Company posting any bond.  The expense of such arbitration shall be borne by the
party who was found to be in breach of the Agreement.  Parties shall bear their
own legal fees and personal costs of such arbitration.  If the party who
initiated arbitration is found by the arbitration panel to have brought the
action in bad faith, then such party shall be responsible for the other party’s
legal fees and other costs incurred as a result of the arbitration.

7.

Entire Agreement.  This Agreement constitutes the entire agreement and
understanding of the parties with respect to the transactions contemplated
hereby and supersedes all prior agreements, arrangements and understandings of
the parties with respect to the subject matter hereof.  No amendment or
modification of this Agreement shall be valid or binding unless made in writing
and signed by the parties hereto.

8.

Notices.  All notices and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given on the date of service if
served personally on the party (including without limitation service by
overnight courier service) to whom notice is to be given, or on the third day
after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, at the address set forth
below, or on the date of  service if delivered by facsimile to the facsimile
number then utilized by the party receiving the facsimile.  All notices shall be
addressed to the parties to be served as follows:

(a) If to Bank:

Exchange Bancshares, Inc.

237 Main Street

Box 177

Luckey, Ohio 43443

Attn: Chairman

Copy to:

Dinsmore & Shohl LLP

1900 Chemed Center

255 East Fifth Street

Cincinnati, Ohio  45202

Attention: Susan B. Zaunbrecher, Esq.

(b) If to Employee:

Jeffery A. Robb

2300 National Road S.W.

Hebron, Ohio 43025

 

9.

Severability.  If any provision of this Agreement shall be invalid or
unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, and this Agreement shall be construed and enforced
to the maximum extent permitted by law.

10.

Waiver.  No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.

11.

Governing Law.  This agreement shall be governed by and construed in accordance
with the laws of the State of Ohio without regard to principles of conflict of
law.

12.

Assignment.  Employee may not assign any rights under this Agreement without the
prior written consent of Holding Company. If Holding Company, or any entity
resulting from any stock purchase, merger or consolidation with or into Holding
Company, is merged with or consolidated into or with any other entity or
entities, or if substantially all of the stock or operating assets of any of the
aforementioned entities is sold or otherwise transferred to another entity, the
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the continuing entity in, or the entity resulting from, such asset
purchase, merger or consolidation, or the entity to which such assets are sold
or transferred.

13.

Headings.  The headings contained in this Agreement are for reference purposes
only and should not affect in any way the meaning or interpretation of this
Agreement.

[Remainder of this Page Left Intentionally Blank]

EX10.DOC

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the Effective Date.

 

EXCHANGE BANCSHARES, INC.

By:

/s/ Marion Layman

Marion Layman, Chairman

Employee

 

/s/ Jeffery A. Robb

 

Jeffery A. Robb

EX10.DOC

EXHIBIT 1.2

JOB DESCRIPTION

RESPONSIBILITIES

The President and CEO of Holding Company, who is also a Director on the Board of
Directors of Holding Company, is elected by the Directors to such positions.  As
such, he is held responsible by the directorate for overseeing Holding Company
management; comprehensive strategic planning; and execution of all Board
policies and directives.

DUTIES

The principal duties of the President of Holding Company and CEO of Holding
Company:

1.

Supervise the business and financial affairs of the Holding Company and delegate
to the officers, duties and responsibilities not specifically assigned to them
by the Articles of Incorporation, Regulations or Board of Directors.

2.

Preside at all meetings of the shareholders, Board of Directors and Executive
Committee of the Holding Company in the absence of the Chairman and the Vice
Chairman.

3.

Serve on all committees either as a member or ex-officio member.

4.

Direct the Holding Company-wide strategic planning process.  Ensures that
short-term and long-term plans are written, communicated, reviewed, and
evaluated on a quarterly basis.

5.

Keep abreast of current trends in banking and other businesses appropriate for
bank holding companies by regularly reading appropriate materials and attending
seminars and conventions.

6.

Work in concert with the management team, prepare and monitor the yearly budget
for use in strategic long-term and short-term planning.

7.

Coordinate the gap and spread positions in the asset/liability management
policies for the Holding Company, working with the chief financial officer.

8.

Direct the marketing and advertising of Holding Company products and services.

9.

Direct all securities law and holding company regulatory functions, working with
the chief financial officer.

10.

Be involved with various professional associations and civic activities to
enhance the Holding Company’s visibility as well as increase personal
development.

11.

Develop new business for Holding Company.

12.

To perform any and all duties required or requested by the Board of Directors.