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Exhibit 10.26

EMPLOYMENT AGREEMENT EXTENSION

THIS EMPLOYMENT AGREEMENT EXTENSION (the “Extension”) is entered into effective
as of the December 31, 2011 (the “Effective Date”), by and between Tower
Financial Corporation, an Indiana corporation (the “Company”) and Richard R.
Sawyer, a resident of Allen County, Indiana (the “Employee”).

WHEREAS, the Company notified the Employee on August 27, 2011 that it wishes to
extend the Employee’s original employment agreement (the “Original Agreement”)
dated September 18, 2009 (Exhibit A), for a term to end on March 31, 2013, under
the same terms and conditions as the Original Agreement.

WHEREAS, the Employee wishes to be employed by the Company for the extended
term, under the same terms and conditions as the Original Agreement dated
September 18, 2009.

WHEREAS, the extension received regulatory approval from the Federal Reserve
Board (“FRB”) on January 4, 2012, and the concurrence of the Federal Deposit
Insurance Corporation (“FDIC”) on January 17, 2012.

NOW, THEREFORE, for and in consideration of the foregoing recitals and of the
mutual covenants and agreements set forth herein, the parties, intending to be
legally bound hereby, agree as follows:

5.           Term.  The term of the original agreement shall continue in full
force and effect through and including March 31, 2013, subject to FDIC
concurrence.

6.           Notification.  The Company will be obligated to notify Employee on
or prior to December 1, 2012, of its intent to either extend the original
Agreement for an additional term beyond March 31, 2013 or enter into a new
agreement with the Employee.

7.           Termination or Repayment of Certain Severance Payments.  If the
Company, or its successor, becomes aware that Employee has committed, is
substantially responsible for, or has violated, any of the respective acts or
omissions, conditions, or offenses described and set forth at 12 C.F.R
§359.4(a)(4),  then the Company,  or its successor, may (a) terminate any
severance benefits due under Sections 6 of the Original Agreement and/or (b)
demand and be entitled to reimbursement for severance benefits already paid to
Employee under such sections.

8.           Continuation of Agreement.  All the remaining terms and conditions
of the Original Agreement not in conflict with this Extension shall remain in
full force and effect for the Term.

IN WITNESS WHEREOF, the parties have executed this Extension as of the date
first above written and agree that the effective date of the Extension will be
the expiration date of the original term, January 1, 2012.

TOWER FINANCIAL CORPORATION
                 
By:
/s/: Robert N. Taylor
 
By
/s/: Richard R. Sawyer
             
Its:  
Chair, Compensation Committee                    
Date:
January 18, 2012
 
Date:
January 18, 2012
 

 
 

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Exhibit A
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 18th day
of September, 2009, by and between Tower Financial Corporation, an Indiana
corporation (the “Company”) and RICHARD R. SAWYER, a resident of Allen County,
Indiana (the “Employee”).

WHEREAS, the Company is in the business of operating a bank and financial
services holding company and, directly or through subsidiary entities, operates
or may operate various banking, trust company and other permitted businesses;

WHEREAS, Company wishes to employ Employee, and Employee wishes to be employed
by the Company, under the following terms and conditions,

NOW, THEREFORE, for and in consideration of the foregoing recitals and of the
mutual covenants and agreements set forth herein, the parties, intending to be
legally bound hereby, agree as follows:

 
1.
Employment.  The Company hereby employs Employee, for the Term set forth in
Section 3, as the Company’s Chief Financial Officer.  Employee agrees to accept
such employment upon the terms and conditions set forth herein, and to devote
his full-time, attention and best efforts to the performance of his duties, as
more fully described below.

2.           Duties.  During the Term, Employee’s duties (“Duties”) shall
consist of those Duties as are consistent with the position of Chief Financial
Officer, or such other duties, for and on behalf of the Company or any of its
affiliates, with executive responsibilities commensurate with a position
generally similar to that described in Section 1, as may from time to time be
assigned to him by the Company’s Chief Executive Officer or its Board of
Directors. Employee’s Duties also include or may include, without limitation,
serving as an officer, director or employee of one or more Company subsidiaries
or affiliates.

Employee agrees that any programs, financial or other products, software,
systems or other intellectual property that may be developed by the Company,
with or without Employee’s participation and assistance, and whether or not
within the scope of Employee’s Duties hereunder, shall be deemed to constitute
works for hire belonging to the Company, and, in all events, shall be and remain
the Company’s exclusive property; and Employee shall not assert (and hereby
relinquishes) any rights or claims therein or thereto.

3.           Term.  This Agreement shall become enforceable from and after the
execution by the parties, notwithstanding the delayed effective date described
herein. Subject to the provisions of Sections 3(a) through 3(d) and unless
otherwise extended as provided herein, the term of this Agreement (the “Term”)
shall commence on November 27, 2009 (the “Effective Date”) and shall extend
through December 31, 2011. Until commencement of the Effective Date, however,
Employee’s existing Employment Agreement, dated November 27, 2007, shall remain
in full force and effect.

(a)           If, on or prior to the ninetieth (90th) day prior to the
expiration of the Term or any Extended Term as provided herein, the Company
fails to notify Employee that it elects to extend the term of this Agreement for
an additional two year period (an “Extended Term”), on the basis of the same
terms and conditions as those applicable during the preceding Term or, if
applicable, the preceding Extended Term, the Term or, if applicable, the then
current Extended Term, will in fact terminate as specified herein, subject,
however, to the Company’s obligation to pay Employee the Severance Amount set
forth in Section 6(f)(i).

(b)           In the event that, on or prior to the ninetieth (90th) day prior
to the expiration of the Term or, if applicable, any Extended Term, the Company
has timely notified Employee of its election to extend the Term or, if
applicable, any Extended Term, for an additional period of two (2) years, and,
on or prior to the thirtieth (30th) day thereafter Employee has either failed to
notify the Company that he is unwilling to extend his employment with the
Company during such Extended Term, on the basis of the same terms and conditions
as applicable during the preceding Term or Extended Term, or, alternatively, has
affirmatively notified the Company that he agrees to proceed in accordance with
the Company’s election to extend the Term or Extended Term, if applicable, this
Agreement shall be deemed to have been further so extended.

 
 

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(c)           In the event that in accordance with the provisions of
Section 3(b), the Company has timely notified Employee of its election to extend
the Term or any Extended Term, but, on or prior to the thirtieth (30th) day
thereafter, Employee notifies the Company that he declines to accept the
Company’s election to continue such employment during the proposed Extended
Term, on the basis of the same terms and conditions as those applicable during
the preceding Term or, if applicable, the preceding Extended Term, the Agreement
will in fact terminate on the then applicable expiration date, subject, however,
to the Company’s obligation to pay Employee the Severance Amount set forth in
Section 6(f)(ii).

(d)           If, during the Term or any Extended Term, and without Cause as
defined in Section 6(c), the Company terminates the Agreement, Employee will be
entitled either to the Severance Amount described in Section 6(e), or, if
applicable the Change in Control Payment described in Section 6(g)(i), but not
both.

Following the Term or any Extended Term, if any, any continued employment,
unless pursuant to another written employment agreement, if any, shall be on an
at-will basis, subject to such terms and conditions as the parties may mutually
agree in writing.

4.           Compensation.

(a)           Base Salary.  During the Term, and unless otherwise mutually
agreed in writing during the Term or any Extended Term, Employee will receive an
annual base salary of $135,000 (the “Base Salary”), payable in accordance with
the Company’s normal payroll practices in effect from time to time.  Such Base
Salary shall be subject to periodic review, and may be increased, but not
decreased, from time to time at the Board of Director’s sole discretion upon the
recommendation of the Company’s Compensation Committee.

(b)           Bonus.  During the Term or any Extended Term, if applicable, and
unless otherwise mutually agreed in writing, Employee will be eligible to
receive a bonus at such times and in such amounts, if any, as the Company’s
Board of Directors, on the recommendation of its Compensation Committee, may
determine, in the exercise of its sole and exclusive discretion.  Any such bonus
compensation may be either, in whole or in part, performance based, consistent
with the requirements of Section 162 of the Internal Revenue Code of 1986, as
amended, or discretionary, and may be based upon the provisions of any
applicable incentive plan or upon the recommendation of its Compensation
Committee, in recognition of Employee’s performance of his Duties in an
extraordinary manner deserving of additional compensation. Nothing in this
Agreement, however, shall limit the Board’s discretion to adopt, amend or
terminate any performance-based or any other bonus plan.

(c)           Stock Options; Restricted Stock.  During the Term or any Extended
Term, Employee shall be eligible to participate in such other stock option,
restricted stock or other equity-based incentive plans, including any plans
contemplating the potential grant of incentive stock options, non-qualified
stock options, restricted stock, or various other equity based awards, that may
be adopted by the Company from time to time; provided, however, that nothing
herein shall be deemed to entitle Employee to any specific benefit grant or
award (any such grant or award to be solely discretionary with the Board, upon
the recommendation of the Compensation Committee) or to limit the Board’s
discretion to adopt, amend or terminate any plan or program.

(d)           Other Benefit Plans.  The Company agrees that, if otherwise
eligible, Employee will be covered by or will be entitled to participate in any
vacation programs, 401(k) plans or programs, disability or life insurance plans
or programs, medical and/or hospitalization plans, and/or in any and all other
benefit plans which may be adopted from time to time by the Company during the
Term or any Extended Term, for the general benefit of the Company’s senior
executives.  Nothing herein, however, shall limit the Company’s ability to
exercise the discretion provided to it under any such benefit plan, or otherwise
in its discretion to adopt, amend or terminate any such benefit plan or program.

 
 

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(e)           Business Expenses.  The Company shall reimburse Employee for all
ordinary and necessary business-related expenses incurred by him while carrying
out his employment responsibilities hereunder.  Such reimbursement shall be in
accordance with the Company’s policies and practices regarding the types or
amounts of business expenses for which Employee may be entitled to reimbursement
hereunder, including any required pre-authorizations, and to establish policies
regarding such reimbursements.

5.           Agreement to Maintain Confidentiality.

(a)           Without the Company’s prior consent, Employee shall not divulge
any confidential business information, and he agrees and covenants that all
confidential business information regarding the Company’s business practices and
processes, its marketing plans and methods, its operations analyses and
software, customer and client lists and identities, however developed or
generated, as well as information concerning customer preferences and current or
prospective business opportunities, its financial and budgetary information,
business development ideas and strategies, and its other trade information,
trade secrets, know-how, and other information regarding the Company’s affairs
(“Confidential Business Information”) has been and will continue to be received
and held by Employee in the strictest confidence.  Employee agrees not to
divulge to any other person or use for his personal benefit or for the benefit
of any other person, any such Confidential Business Information, except insofar
as that person has a need to know such Confidential Business Information in the
ordinary course of the Company’s business and for its benefit.  Employee further
agrees that, upon expiration of the Term or any Extended Term, if any, or upon
earlier termination of the Agreement, regardless of reason or by whom
terminated, he will not exploit and will surrender to the Company any and all
documents, records and rights, in whatever form, that may be in his possession
or control containing any such Confidential Business Information, as well as any
and all other property that may belong to the Company, including, without
limitation, computer hardware and software, pagers, PDAs, Blackberries, cell
phones and other electronic equipment, notes, reports, studies and all
electronically stored information.

(b)           For purposes of this Agreement, information shall not be deemed to
constitute “Confidential Business Information” to the extent that the
information (i) is in the public domain, or hereafter becomes generally known or
available outside the Company through no action or omission on the part of
Employee in violation of this Agreement, (ii) is furnished to any person by the
Company without restriction on disclosure, (iii) becomes known to Employee from
a source other than the Company, without a breach of any obligation hereunder,
(iv) is required to be disclosed by law (in which case Employee will give prompt
written notice to the Company of any such required disclosure to the extent such
notice would not be prohibited by law), or (v) is disclosed after written
approval for disclosure has been granted by the Company.

(c)           The provisions of this Section 5 shall survive any expiration of
the Term or any Extended Term, or the prior termination of this Agreement.

6.           Termination of Employment.

(a)           Termination Due to Death.  Employee’s employment with the Company
will automatically terminate immediately upon his death, and Employee’s estate
or designated beneficiary, in addition to any life insurance benefit payable to
Employee or his designated beneficiary, will be entitled to (i) any earned but
unpaid Base Salary to the date of termination, (ii) in the discretion of the
Board, upon the recommendation of the Compensation Committee, any pro rata bonus
for the partial calendar year to the date of Employee’s death, and (iii) any
unpaid vacation and unreimbursed expenses payable hereunder. Unless otherwise
required, and subject to the provisions of Section 8(a), all payments shall be
made within 30 days of Employee’s termination of employment, except for the pro
rata bonus, which shall be paid within 2½ months of the end of the fiscal year
in which the termination occurred.  Except for the foregoing payment amounts,
Employee shall be entitled to no other compensation, benefits or payments.

(b)           Termination Due to Disability.  If, during the Term or any
Extended Term, Employee suffers a “Disability” as defined by one or more of the
alternative definitions of disability set forth in Section 409A of the Internal
Revenue Code and the guidance and regulations issued pursuant thereto, the
Company, in the exercise of its sole discretion, shall be entitled to terminate
Employee’s employment hereunder, immediately upon written notice to Employee of
such decision, subject, however, to the payment to Employee of (i) any earned
but unpaid Base Salary, (ii) any pro rata bonus for the partial calendar year to
the date of such notice, and (iii) unpaid vacation and unreimbursed expenses
payable hereunder. Unless otherwise required, and subject to the provisions of
Section 8(a), Employee’s employment shall terminate and all payments shall be
made within 30 days of Employee’s receipt of written notice of termination of
employment, except for any pro rata bonus, which shall be paid within 2½ months
of the end of the fiscal year in which the termination occurred. Except for the
foregoing payment amounts, or any amounts payable to Employee under any Company
long-term disability plan, if any, Employee shall be entitled to no other
compensation, benefits or payments by reason of his disability.

 
 

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(c)           Termination by Company for Cause.  During the Term or any Extended
Term, if any, the Company shall be entitled to terminate Employee’s employment
hereunder for “Cause,” as defined below, by providing written notice to Employee
of such decision.  For purposes of this Agreement, Cause shall mean (i) the
commission by Employee of an act of malfeasance, dishonesty, fraud or breach of
trust against the Company or any of its affiliates, employees, clients or
vendors resulting or intended to result in substantial gain or personal
enrichment to which Employee was not legally entitled; (ii) the continued
non-performance or breach by Employee of any of his material Duties or
obligations hereunder, whether expressed in writing or otherwise generally
understood, after a written demand by the Company for correction of such
non-performance or breach is delivered to Employee, which specifically
identifies the non-performance and the manner in which the Company asserts that
Employee has not performed, and the continued non-performance following the
expiration of thirty (30) days of his receipt of such written demand; or (iii)
Employee’s indictment, conviction of or plea of guilty or no contest to any
felony or any crime involving moral turpitude.

Upon termination of this Agreement for Cause, the Company shall pay Employee any
earned but unpaid Base Salary to the date of termination, any earned and unpaid
vacation and any unreimbursed expenses otherwise payable hereunder; provided,
however, that nothing herein shall be deemed to preclude the Company from
asserting a damage claim, if any, against Employee by reason of circumstances
related to the termination for Cause.  All such payments shall be made within 30
days of Employee’s termination of employment.  Except for the foregoing payment
amounts, Employee shall be entitled to no other compensation, benefits or
payments by reason of his termination of employment for cause.

(d)           Termination by Employee During the Term or Extended
Term.  Employee may voluntarily terminate his employment with the Company,
without reason, at any time during the Term or any Extended Term, if applicable,
and, if so terminated, but subject in any event to the provisions of
Section 6(g)(ii) if there has been a “Change in Control,” as defined therein, he
shall be entitled to (i) any earned but unpaid Base Salary to the date of
termination, (ii) in the discretion of the Board, upon the recommendation of the
Compensation Committee, any pro rata bonus for the partial calendar year to the
date of termination, and (iii) any earned and unpaid vacation and unreimbursed
expenses otherwise payable hereunder. Unless otherwise required, and subject to
the provisions of Section 8(a), all payments required to be made by the reason
of this Section 6(d) shall be made within 30 days of Employee’s termination of
employment, except for any pro rata bonus, which, if awarded, shall be paid
within 2½ months of the end of the fiscal year in which the termination
occurred.  Except for the foregoing payment amounts, and, if applicable, any
amounts to which Employee may be entitled under the provisions of Section 6(g),
Employee shall be entitled to no other compensation, benefits or payments by
reason of Employee’s voluntary termination of employment.

(e)           Termination by Company Without Cause.  If, during the Term or any
Extended Term, the Company terminates this Agreement and Employee’s employment
hereunder, without Cause as defined in Section 6(c), Employee shall be entitled
to receive any earned by unpaid Base Salary to the date of termination, any
earned and unpaid vacation and unreimbursed expenses otherwise payable
hereunder, and, in addition, as liquidated damages or as a severance payment
(the “Severance Amount”), the greater of (i) Employee’s Base Salary, pro rated
monthly, multiplied by the number of months, or portion thereof, remaining to
the expiration of the Term or, if applicable, any Extended Term, or (ii) twelve
(12) months Base Salary, in either case payable in a lump sum, in cash and
without discount, within thirty (30) days of termination, subject, in the case
of the Severance Amount, however, to the following limitations:

If Employee is a “Specified Employee” at the time of his separation from
service, payment of such Severance Amount shall be delayed for six (6) months
after the date of the separation from service, if required by Section 409A of
the Internal Revenue Code and the guidance and regulations thereunder (the
“Delayed Payment Period”). After such six month delay, the required lump sum
Severance Amount shall promptly thereafter be paid to Employee.

 
 

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The term “Specified Employee” shall mean a key employee as defined in
Section 416(i) of the Internal Revenue Code, without regard to Paragraph (5)
thereof, determined as of December 31 of the calendar year preceding the year in
which the separation from service occurs.

In the event that, during the Delayed Payment Period, Employee is found to have
been in violation of his covenants and obligations described in Section 7(a),
the Company shall not be required to pay Employee the foregoing Severance
Amount. In the further event that, even after having received the required
Severance Amount, Employee is found to have been in breach of his covenants and
obligations pursuant to Section 7(a), whether prior to the receipt of or after
having received the Severance Amount, then the Company shall be entitled,
through institution of legal proceedings, to recover the Severance Amount from
Employee, in addition to any and all other remedies to which the Company may be
entitled by reason of such breach, including the remedy set forth in
Section 7(b).

Furthermore, if Employee’s employment is terminated hereunder by the Company
without Cause, all unvested stock options or shares of restricted stock held by
Employee shall be deemed fully vested, effective as of the date of termination;
provided that all vested stock options shall continue to be exercisable by
Employee, subject, however, to the provisions of the particular Company plan or
program pursuant to which the stock options were granted and to the terms of the
actual stock option agreement and option, only during the ninety (90) day period
following Employee’s separation from service.

Except for the foregoing payment amounts, and provisions regarding stock options
and restricted stock, Employee shall be entitled to no other compensation,
benefits or payments by reason of his termination without Cause.

(f)           Non-Extension.

(i)           By the Company.  If, as contemplated by the provisions of
Section 3(a), the Company fails to notify Employee that it elects to extend the
Term or any Extended Term, if applicable, for an additional two year period,
then, in addition to Employee’s entitlement to continue to be paid all
compensation and benefits as prescribed under the provisions of Section 4 for
the balance of the Term or any Extended Term, if applicable, during which time
he shall continue to render services to the Company as contemplated by this
Agreement, Employee shall also be entitled to receive the following
post-employment payment (the “Post-Employment Payment”), payable in a lump sum,
in cash and without discount, within thirty (30) days of his separation from
service, subject, however, to Delayed Payment Period limitations described in
Section 6(e), if applicable.

The Post-Employment Payment shall be equal to the sum of Employee’s Base Salary,
pro rated on a monthly basis, multiplied by nine (9) months.

(ii)           By Employee.  If, as contemplated by the provisions of
Section 3(c), the Company has timely notified Employee of its election to extend
the Term or any Extended Term, if applicable, but Employee has exercised his
right, as described therein, to decline such continued employment, Employee
shall thereafter continue his employment on the basis of the same terms and
conditions of employment to the expiration of the Term or Extended Term, if
applicable, but, in addition thereto, shall only be entitled to receive any
earned by unpaid Base Salary, any pro rata bonus for the calendar year to the
date of separation from service, and any unpaid vacation pay and unreimbursed
expenses payable hereunder.

(g)           Change in Control.  In the event that a change in control occurs,
as defined in Section 409A of the Internal Revenue Code and the guidance and
regulations issued thereunder (a “Change in Control”), then:

(i)           If, during the Term or any Extended Term, if applicable, and
within three (3) months before or twelve (12) months after such a Change in
Control, Employee’s employment is terminated by the Company, without Cause as
defined in Section 6(c), Employee shall thereupon be entitled,

 
 

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(A)           to receive a “Change in Control Payment” equal to the amount
described in Section 6(e), payable in the manner and subject to the Delayed
Payment Period described therein; and

(B)           to have all unvested stock options and shares of restricted stock,
if any, then held by Employee fully vest, as of the date of separation from
service; provided that all vested stock options shall be exercisable by
Employee, subject in any event to the provisions of the particular Company plan
or program pursuant to which the stock options were granted and to the terms of
the actual stock option agreement and option, only during the ninety (90) day
period following separation from service.

(ii)           If within three (3) months before or twelve (12) months after
such a Change in Control, Employee’s compensation or his functional
responsibilities are materially reduced, Employee may in such event, by written
notice, elect to voluntarily terminate his employment, and Employee shall
thereupon be entitled, in lieu of any payments to which he might otherwise be
entitled by reason of the application of Section 6(d):

(A)           to receive a Change in Control Payment equal to the amount
described in Section 6(e), payable in the manner and subject to the Delayed
Payment Period described therein; and

(B)           to have all unvested stock options and shares of restricted stock,
if any, then held by Employee fully vest, as of the date of separation from
service; provided that all vested stock options shall be exercisable by
Employee, subject in any event to the provisions of the particular Company plan
or program pursuant to which the stock options were granted and to the terms of
the actual stock option agreement and option, only during the ninety (90) day
period following separation from service.

7.           Non-Solicitation.

(a)           Non-Solicitation.  Employee agrees that, during the Term or any
Extended Term, if applicable, and for a period of twelve (12) months immediately
following the earlier to occur of the expiration of the Term or Extended Term,
if applicable, or the earlier termination of Employee’s employment hereunder,
for whatever reason and by whomever initiated, and whether or not Employee is
entitled to continue to receive compensation hereunder, he will not, directly or
indirectly (i) solicit, take away, hire, employ or endeavor to employ any person
employed by the Company, or (ii) solicit, take away or attempt to take away any
of the existing or prospective customers or clients, vendors or licensors of the
Company or any of its subsidiaries (as of the date of expiration or actual
termination of employment, whichever is later), whether for the purpose of
conducting any business which directly or indirectly provides banking, financial
or other services similar in nature to the services provided by the Company or
any of its subsidiaries, or otherwise. As used herein, the term “prospective
customers or clients” shall include persons or entities with whom the Company or
its subsidiaries have been in contact within the previous twelve (12) months for
the purpose of establishing or conducting a business relationship.

(b)           Specific Enforcement.

(i)           Employee acknowledges that any violation of any provision of
Section 7(a) by him will cause irreparable damage to the Company, that such
damage will be incapable of precise measurement, and that, as a result, the
Company will not have an adequate remedy at law to redress the harm which such
violation will cause.  Therefore, in the event of any violation of any provision
of Section 7(a) by Employee, Employee agrees that, in addition to all other
remedies that the Company or any of its subsidiaries may have at law or in
equity, including the right to discontinue paying any further compensation
hereunder, or the right to sue for damages, the Company shall be entitled to
injunctive relief, including, without limitation, the right to obtain a
temporary restraining order and a temporary injunction to restrain any such
violation. In such event, the Company shall not be required to post a bond in
excess of the minimum bond required under the civil rules of the court having
jurisdiction over the controversy.

 
 

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(ii)           In the event that a court shall find that Employee has violated
any of the restrictions set forth in Section 7(a), then the period of the
restrictions set forth herein shall automatically be extended by the number of
days that the court determined Employee to have been in violation of such
restriction.  Furthermore, in addition to any other relief to which the Company
shall be entitled, the Company shall be entitled to recover from Employee its
reasonable costs and attorney fees incurred by the Company in seeking
enforcement of these provisions.

8.           Miscellaneous.

(a)           Special Provision Regarding Section 409A of the Internal Revenue
Code. This Agreement is intended to comply with the applicable requirements of
IRC Section 409A and shall be limited, construed, and interpreted in accordance
with such intent (including final regulations or any other guidance).
Notwithstanding anything hereunder to the contrary, any provision of the
Agreement that is inconsistent with said Section 409A shall be deemed to be
amended to comply with IRC Section 409A and to the extent such provision cannot
be amended to comply with IRC Section 409A, such provision shall be null and
void.

(b)           Other Rights.  This Agreement shall not prevent or limit
Employee’s continuing or future participation in any benefit, bonus, incentive
or other plans, if any, provided by the Company or any of its subsidiaries and
for which Employee may qualify, nor shall this Agreement limit or otherwise
affect such rights as Employee has under any other agreements with the Company
or any of its subsidiaries.  Amounts which are vested benefits or which Employee
is otherwise entitled to receive under the terms of any plan of the Company or
any of its subsidiaries and any other payment or benefit required by law at or
after termination of employment shall be payable in accordance with such plan or
applicable law, except as specifically provided by this Agreement.

(c)           Entire Agreement; Amendments.  This Agreement discharges and
cancels all previous and contemporaneous agreements, both written and oral,
between Employee and the Company.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof.  No
agreements, representations or statements of any party not contained herein
shall be binding on either party, and no amendment or variation of the terms and
conditions of this Agreement shall be valid unless in writing and signed by both
parties.

(d)           Assignability; Successors of the Company.

(i)           This Agreement and the rights and duties created hereunder shall
not be assignable or delegable by Employee.  The Company may, at its option and
without Employee’s consent, assign its rights and duties hereunder to any
successor entity, Company affiliate or subsidiary, or any transferee of the
Company’s assets.

(ii)           The Agreement will be binding upon and inure to the benefit of
the Company, Employee and their respective heirs, representatives and
successors.  The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken
place.  As used in this Agreement, the term “Company” means the Company as
hereinbefore defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

(e)           No Waiver.  No failure or delay by any party to this Agreement to
enforce any rights specified hereunder shall operate as a waiver of such right,
nor will any single or partial exercise of a right preclude any further or later
enforcement of the same right within the period of the applicable statute of
limitations.

(f)           Governing Law.  This Agreement and the performance of the parties
under this Agreement shall be construed in accordance with the laws of the State
of Indiana, regardless of the jurisdiction in which the action or proceeding may
be commenced.

 
 

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(g)           Notices.  All notices and other communications provided for or
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when delivered and received by the other party, or when sent by
recognized overnight courier, or by faxed communication (with overnight delivery
of a hard copy thereof) to the following addresses and/or contact numbers:

 
If to the Company:
Tower Financial Corporation

Attn:  Michael D. Cahill
116 East Berry Street, Suite 100
Fort Wayne, IN  46802

 
If to Employee:
Richard R. Sawyer

8214 Grand Forest Court
Fort Wayne, IN 46815

or to such other address or contact number as either party hereto will have
furnished to the other in writing in accordance with this Section 8, except that
such notice of change of address or contact number shall be effective only upon
receipt.

(h)           Counterparts.  This Agreement may be exercised in any number of
counterparts, each of which as so executed shall be deemed to be an original,
and such counterparts shall together be deemed to constitute but one agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 
 

TOWER FINANCIAL CORPORATION                              
By:
/s/ Michael D. Cahill
 
/s/ Richard R. Sawyer
 
Its:
Chief Executive Officer & President
 
Richard R. Sawyer
 
Date:
September 18, 2009
 
Date:
September 18, 2009
 

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