ex10_24.htm


    
      

    

     

    
      EXHIBIT
        10.23

      


      EMPLOYMENT
        AGREEMENT

      


      THIS
        EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the
23  day of  August, 2006 (the “Effective Date”), by and
        between Tower Financial Corporation, an Indiana corporation
        (the “Company”) and Michael D. Cahill, 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 the Employee, and the 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 the Employee, for the Term set forth in Section 3,
        as the Company’s Executive Vice President, Chief Financial Officer, and
        Secretary.  The 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, the Employee’s duties (“Duties”) shall consist of those Duties as are
        consistent with the position of Executive Vice President, Chief Financial
        Officer, and Secretary, 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. The 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.

      


      The
        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.  Subject
        to the provisions of Sections 3(a) and 3(b), the term of this Agreement (the
        “Term”) shall commence on the Effective Date and shall extend for a period of
        two (2) years, through June 30, 2008.

      


      (a)           If,
        prior to the ninetieth (90th) day
        before the
        expiration of the Term, the Company and the Employee fail to agree in writing
        to
        extend the Term for one additional period of two (2) years (the “Extended
        Term”), the Term will in fact terminate as specified.

      


      (b)           If,
        however, during the Term and without Cause as defined in Section 6(c),
        either

      


      
        	
                 

              	
                (i)

              	
                the
                  Company terminates the Agreement,

              


      

      


      (ii)           the
        Company affirmatively provides written notice to the Employee, prior to the
        ninetieth (90th) day
        before the
        expiration of the Term, that the Agreement will not be extended beyond the
        expiration of the Term for one Extended Term, if any, or

      


      (iii)          the
        Company and the Employee simply fail to mutually agree in writing prior to
        the
        ninetieth (90th) day
        before the
        expiration of the Term to extend the Term for the single two year Extended
        Term,
        if any,


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      the
        Term
        will in fact expire as of the end of the Term, as specified herein, but the
        Employee will be entitled to the severance benefits set forth in either
        Section 6(e) (if Section 3(b)(i) or Section 3(b)(ii) applies) or
        Section 6(f) (if Section 3(b)(iii) applies).

      


      Following
        the Term or the single 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 or the
        Extended Term, if any, unless otherwise mutually agreed in writing, the Employee
        will receive an annual base salary of $160,000 (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 the extended Term, if any, unless otherwise mutually agreed in
        writing, the 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
        performance based, consistent with the requirements of Section 162 of the
        Internal Revenue Code of 1986, as amended, or discretionary, in whole or
        in
        part, and may be based upon the provisions of the Company’s Officer Incentive
        Plan or awarded in the exercise of the Board’s discretion, upon the
        recommendation of its Compensation Committee, in recognition of the 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 the Extended Term, if any, the 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 the 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, the 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 the Extended Term, if any, 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.

      


      (e)           Business
        Expenses.  The Company shall reimburse
        the 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 the 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, the 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 the Employee
        in the strictest confidence.  The 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.  The Employee further agrees that, upon expiration of the
        Term or the 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.


      
        
          
          

        

        
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      (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 the Employee in violation
        of this Agreement, (ii) is furnished to any person by the Company without
        restriction on disclosure, (iii) becomes known to the 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 the 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
        the Extended Term, if any, 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 the 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 21⁄2 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 the Extended Term, if any, the Employee suffers a “Disability” as defined
        herein, the Company, in the exercise of its sole discretion, shall be entitled
        to terminate Employee’s employment hereunder, immediately upon written notice to
        the Employee of such decision, subject, however, to the payment to the Employee
        of (i) any earned but unpaid Base Salary, (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 such notice, and (iii) unpaid
        vacation and unreimbursed expenses payable hereunder. For purposes of this
        Agreement, “Disability” shall mean a physical or mental impairment that entitles
        the Employee to receive benefits under the Company’s long-term disability plan,
        if any, or otherwise, upon the determination by the Company, after consultation
        with a medical doctor selected by the Company, that the Employee, for a
        continuing period of one hundred fifty (150) days, has been unable, in spite
        of
        reasonable accommodation, to perform the essential functions required of
        his position. 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 21⁄2 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.

      


      (c)           Termination
        by Company for
        Cause.  During the Term or the 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 the
        Employee of such decision.  For purposes of this Agreement, Cause
        shall mean (i) the commission by the Employee of an act of malfeasance,
        dishonesty, fraud or breach of trust against the Company or any of its
        affiliates, employees, clients or vendors, (ii) the continued non-performance
        or
        breach by the Employee of any of his material Duties or
        obligations hereunder, after a written demand by the Company for correction
        of
        such non-performance or breach is delivered to the Employee, which specifically
        identifies the section or sections of the Agreement or the non-performance
        of
        the specific Duties which the Company asserts have been the subject of the
        non-performance or the breach and the manner in which the Company asserts
        that
        the Employee has not performed or has breached the obligations referenced
        therein, and which is not cured by the Employee within thirty (30) days of
        his
        receipt of such written demand; or (iii) the Employee’s indictment, conviction
        of or plea of guilty or no contest to any felony or any crime involving moral
        turpitude.


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      Upon
        termination of this Agreement for Cause, the Company shall pay the 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 the 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.

      


      (d)           Termination
        by Employee During the Term or Extended
        Term.  The Employee may voluntarily
        terminate employment with the Company without reason at any time during the
        Term
        or the Extended Term, if any, and, if so terminated, shall be entitled to
        (i)
        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 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 21⁄2 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.

      


      (e)           Termination
        by Company Without Cause.  If, during
        the Term or the Extended Term, if any, the Company either terminates this
        Agreement and Employee’s employment hereunder, as contemplated by
        Section 3(b)(i), or gives written notice during the Term of non-extension
        as contemplated by Section 3(b)(ii), in either case without Cause as
        defined in Section 6(c), the Employee shall be entitled to

      


      (i)           if
        there are less than six (6) remaining months in the Term or, if applicable,
        in
        the Extended Term, (A) continued payments of Base Salary each month for the
        duration of the Term or, if applicable, the Extended Term, subject in any
        event
        to Employee’s continued performance of his obligations described in
        Sections 7(a) and 7(b), (B) in the discretion of the Board, upon the
        recommendation of the Compensation Committee, a pro rata portion of any bonus
        for the partial calendar year of the Term or, if applicable, the Extended
        Term
        within which the termination occurred, to the date of termination, subject
        in
        any event to Employee’s continued performance of
        his obligations described in Sections 7(a) and 7(b),
        (C) any earned and unpaid vacation and unreimbursed expenses due the
        Employee to the point of termination, and (D) subject in any event to Employee’s
        continued performance of his obligations described in Sections 7(a) and
        7(b), continued payments of Base Salary over and above the amount described
        in
        Section 6(e)(i)(A), for an additional period of eighteen (18) months,
        payable periodically in accordance with the Company’s normal payroll periods and
        practices; or

      


      (ii)           if
        there are more than six (6) remaining months in the Term or, if applicable,
        the
        Extended Term, (A) in the discretion of the Board, upon the recommendation
        of
        the Compensation Committee, a pro rata portion of any bonus for the partial
        calendar year of the Term or, if applicable, the Extended Term within which
        the
        termination occurred, to the date of termination, subject in any event to
        Employee’s continued performance of his obligations
        described in Sections 7(a) and 7(b), (B) any earned and unpaid vacation and
        unreimbursed expenses due the Employee to the point of termination, and (C)
        continued payments of Base Salary, payable periodically in accordance with
        the
        Company’s normal payroll periods and practices, for an aggregate period of
        twenty-four (24) months following termination, subject in any event to
        Employee’s continued performance of his obligations described in
        Sections 7(a) and 7(b).

      


      For
        the
        avoidance of doubt, notwithstanding anything to the contrary set forth herein,
        any payments required to be made pursuant to the provisions of
        Sections 6(e)(i)(A), 6(e)(i)(B), 6(e)(i)(D), 6(e)(ii)(A) or 6(e)(ii)(C)
        herein shall be payable to the Employee only if and so long as the Employee
        has
        been and continues to be in compliance with the provisions of Sections 7(a)
        and
        7(b) of this Agreement; and provided that in the event that, even after
        having received payments thereunder, in whole or in part, the Employee breaches
        his covenants and obligations pursuant to
        Section 7(a) and/or 7(b) or is found to have been in breach of any or both
        of such provisions prior to or concurrently with having received any of the
        foregoing payments, the Company shall be entitled, through institution of
        legal
        proceedings, to recover its payments to the 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(c).


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      If
        the
        Employee’s employment is terminated hereunder by the Company without Cause, all
        unvested stock options held by the Employee shall be deemed fully vested,
        effective as of the date of termination; provided that all such vested
        stock options shall be exercisable by the 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 the date of
        termination.

      


      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.

      


      (f)           Non-Extension
        by the Company.  If, as contemplated by
        the provisions of Section 3(b)(iii), and in accordance with the
        requirements thereof, the Company, without Cause, and the Employee, during
        the
        Term, simply fail to mutually agree in writing to extend the Term for the
        single
        Extended Term contemplated thereby, then

      


      (i)           subject
        only to the mutual agreement of both the Company and the Employee, (A)
        Employee’s employment hereunder may continue to the end of the Term, but not the
        Extended Term, with the Employee’s Duties, compensation, benefits and all other
        terms and conditions set forth herein continuing to the end of the Term,
        without
        change, and (B) following the expiration of the Term, the Employee’s employment
        shall terminate as contemplated, but Employee, subject in any event to
        Employee’s continued performance of his obligation described in
        Sections 7(a) and 7(b), shall be entitled to continue to receive an amount
        equal in aggregate to the sum of his Base Salary multiplied by eighteen (18)
        months, payable, however, periodically in accordance with the Company’s normal
        payroll periods and practices, but ratably over a period of twenty-four (24)
        months following termination of employment, or

      


      (ii)           in
        the event that the Company and the Employee do not mutually agree that Employee
        shall continue performing his Duties to the end of the Term, then, subject
        to
        his continued performance of his obligations described in Sections 7(a) and
        7(b), the Employee shall be entitled to receive, (A) Base Salary to the end
        of
        the Term, (B) earned vacation pay and any unreimbursed expenses otherwise
        due and payable hereunder to the point of termination, (C) in the discretion
        of
        the Board, and upon the recommendation of the Compensation Committee, any
        pro
        rata portion of any bonus to the point of termination, and, if the Board
        so
        determines, for the remaining portion of the Term, all in accordance with
        the
        Company’s normal payroll practices and procedures, and (D) the Employee shall be
        entitled to continue to receive an amount equal in aggregate to the sum of
        his Base Salary multiplied by eighteen (18) months,
        payable, however, periodically in accordance with the Company’s normal payroll
        periods and practices but ratably over a period of twenty-four (24) months
        following termination employment.

      


      Notwithstanding
        anything to the contrary set forth herein, any payments required to be made
        pursuant to the provisions of Sections 6(f)(i)(B), 6(f)(ii)(A), 6(f)(ii)(C)
        and 6(f)(ii)(D) herein shall be payable to the Employee only if the Employee
        has
        been and continues to be in compliance with the provisions of Sections 7(a)
        and
        7(b) of this Agreement; and provided that in the event that, after
        receiving payments thereunder, in whole or in part, the Employee thereafter
        breaches his covenants and obligations pursuant to Section 7(a) and/or 7(b)
        or is found to have been in breach of any or both of such provisions prior
        to or
        concurrently with having received any of the foregoing payments, the Company
        shall be entitled, through institution of legal proceedings, to recover its
        payments to the 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(c).

      


      If
        the
        Term is not extended, as contemplated by the provisions of
        Sections 3(b)(ii) and this 6(f), then, subject to the following paragraphs,
        vesting of any stock options and the satisfaction of any time-based restrictions
        on any restricted stock theretofore issued to the Employee, shall continue
        to
        operate in the manner contemplated as for any other employee during the balance
        of the original Term, and, effective as of the end of the Term, any then
        unvested stock options shall be deemed vested but exercisable only during
        the
        90-day period following the end of the Term.


      
        
          
          

        

        
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      If
        the
        Employee’s actual employment terminates as of the date of the non-renewal notice
        and prior to the end of the Term, any of the Employee’s stock options unvested
        as of that date shall be deemed fully vested, subject to their exercise,
        if at
        all, only within the 90-day period following the date employment ends, and
        any
        time-based restrictions in connection with any restricted stock held by the
        Employee as of the date of termination of employment, shall likewise be deemed
        satisfied to the extent of the remaining period during which the Employee
        is
        entitled to receive compensation hereunder.

      


      Subject
        to the provisions of Section 8(a), all payments required to be made
        pursuant to the provisions of Sections 6(e)(i)(C), 6(e)(ii)(B) and
        6(f)(ii)(B) shall be made within 30 days of Employee’s termination of
        employment, and any pro rata bonus, if awarded, shall be paid within
        21⁄2 months of the end of the fiscal year in which the termination
        occurred.

      


      (g)           Change
        in Control.  In the event that a change in control
        occurs, as defined herein, then,

      


      (i)           if
        either during the Term or the Extended Term, if any, and in addition to and
        not
        in lieu of the payments and benefits to which Employee may be entitled under
        Section 6(d) (if Employee should elect to voluntarily terminate his employment),
        but subject only to Employee’s willingness, in connection with the proposed or
        actual change in control transaction (and if requested to do so by the Company),
        to continue to perform his duties and responsibilities hereunder for a period
        not to exceed one hundred thirty-five(135) days following the change in control
        (the “Post CIC Term”), and if Employee does so agree, Employee may at any time
        prior to or during the Post CIC Term, to voluntarily terminate his employment
        hereunder, by written notice, effective (unless earlier or later agreed in
        writing) at the conclusion of the Post CIC Term, to

      


      (A)           continued
        payments of Base Salary for an additional period of eighteen (18) months
        following termination of employment, payable periodically in accordance with
        the
        Company’s normal payroll periods ad practices,

      


      (B)           to
        the shortened non-competitive and non-solicitation restrictive periods set
        forth
        in Section 6(g)(iv), and

      


      (C)           to
        have all unvested stock options then held by Employee fully vest, as of the
        date
        of termination of employment; provided that all such 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 the date of
        termination;

      


      (ii)           if
        during the Term and, without Cause, the Company elects to terminate Employee’s
        employment within the scope of Section 3(b)(i) or elects to give written
        notice
        of non-extension within the scope of 3(b)(ii), or if the Company and Employee
        fail to mutually agree to extend the Term as contemplated by Section 3(b)(iii),
        Employee shall continue to be entitled to the severance benefits described
        in
        Section 6(e)(i), 6(e)(ii) or 6(f), as the case may be, but Employee shall
        be
        entitled to the shortened non-competition and non –solicitation restrictive
        periods set forth in Section 6(g)(iv); or

      


      (iii)           if
        during the Extended Term, if any, and unless, by the time of expiration hereof,
        Employee and the Company (or the Company’s successor after the change in
        control)  have entered into a new employment agreement, satisfactory
        to Employee, in replacement of or to succeed this Agreement, Employee shall
        be
        entitled

      


      (A)           to
        elect, under Section 6(g)(i) to voluntarily terminate this Agreement and
        to
        become entitled to the severance benefits described therein, or

      


      (B)           to
        elect to continue to be entitled to his rights and benefits under this
        Agreement, to the end of the Extended Term, and, thereafter, to become entitled
        to


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (x)           continued
        payment of Base Salary for an additional period of twelve (12) months following
        termination of employment, payable periodically in accordance with the Company’s
        normal payroll periods and practices, and

      


      (y)           the
        shortened non-competition and non-solicitation restrictive periods set forth
        in
        Section 6(g)(iv); and

      


      (iv)           for
        purposes of the non-competition and non-solicitation restrictions set forth
        in
        Section 7(a) and 7(b), the restrictive period for purposes of Section 7(a)
        (non-competition) shall be shortened to six (6) months, and the restrictive
        period for purposes of Section 7(b) (non-solicitation) shall be shortened
        to
        twelve (12) month, in either case following termination of employment and
        without regard to the fact that continued severance payments of Base Salary
        may
        continue hereunder beyond the expiration of such restrictive
        periods.

      


      For
        purposes of this Section 6(g), “change in control” shall mean:  the
        direct or indirect sale, transfer, conveyance or other disposition, in one
        or a
        series of related transactions, of all or substantially all of the properties
        or
        assets of the Company; the assumption by any “person” or “group” (as such terms
        are used in Section 13(d) and 14(d) of the Securities Act of 1934, as amended)
        of the beneficial ownership, directly or indirectly, of Company securities
        representing more than 50% of the combined voting power of the Company’s then
        outstanding securities eligible to vote for the election of the board of
        directors; the consummation of a merger, consolidation, statutory share exchange
        or similar form of corporate transaction involving the Company or any of
        its
        subsidiaries that requires the approval of the Company’s shareholders (a
“Business Combination”), unless immediately following such Business Combination,
        50% or more of the total voting power of the survivor or, if applicable,
        the
        ultimate parent corporation that directly or indirectly has beneficial ownership
        of 100% of the voting securities eligible to elect directors of the supervisor
        ,
        is represented by the Company’s voting securities that were outstanding
        immediately prior to such Business Combination (before or after conversation)
        and such voting power among the holders thereof is in substantially the same
        proportion as the voting power of such voting securities among the holders
        thereof immediately prior to the Business Combination; or the adoption of
        a plan
        relating to the liquidation or dissolution of the Company.  In
        addition, for purposes of the definition of “change in control,” if the
        incumbent directors cease to constitute at least a majority of the board
        of
        directors of the Company, and this change has occurred in connection with
        a
        hostile transaction not approved by the incumbent board prior to the change
        in
        control, such circumstance shall likewise constitute a change in
        control.

      


      7.           Non-Competition
        and Non-Solicitation.

      


      (a)           Non-Competition.  The
        Employee agrees that, during the Term or Extended Term, if any, and for a
        period
        of twenty-four (24) months immediately following the earlier to occur of
        the
        expiration of the Term or Extended Term, if any, or actual termination of
        Employee’s employment hereunder, for whatever reason and by whomever initiated,
        and whether or not the Employee is entitled to continue to receive compensation
        under the provisions of Section 6(e), he will not, directly or indirectly,
        anywhere within a seventy-five (75) mile radius of the City of Fort Wayne,
        Indiana or any other community outside of Fort Wayne, Indiana in which the
        Company or any of its subsidiaries has a banking or other business office
        and
        location, engage in any business offering products or services the same as
        or
        competitive with the products or services that, during the Term or the Extended
        Term, if any, are (or are planned to be) offered or supplied by the Company
        or
        its subsidiaries, whether as an individual or sole proprietor or as owner,
        partner, principal, stockholder, officer, director, manager, agent, consultant
        or advisor, or by or through the lending of any other form of
        assistance.  For purposes of this restriction, which the Employee
        agrees is reasonable and tailored specifically to protect the legitimate
        business interests of the Company and its subsidiaries, while not restricting
        the Employee’s ability to engage in the same or similar businesses outside the
        restricted area, a passive investment in an enterprise that is competitive
        with
        the Company, without more, in an amount not exceeding two percent (2%) of
        the
        equity interest in such entity, shall not be deemed a violation of this
        provision.

      (b)           Non-Solicitation.  The
        Employee agrees that, during the Term or the Extended Term, if any, and for
        a
        period of twenty-four (24) months immediately following the earlier to occur
        of
        the expiration of the Term or Extended Term, if any, or the earlier termination
        of Employee’s employment hereunder, for whatever reason and by whomever
        initiated, and whether or not the Employee is entitled to continue to receive
        compensation under the provisions of Sections 6(e), or 6(f), 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) 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.  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.


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (c)

              	
                Specific
                  Enforcement.

              


      

      


      (i)           The
        Employee acknowledges that any violation of any provision of this Section 7
        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
        this Section 7 by the Employee, the 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
        under the provisions of Sections 6(e) or 6(f), 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 violation of this Section 7.  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.

      


      (ii)           In
        the event that a court shall find that the Employee has violated any of the
        restrictions set forth in this Section 7, then the period of all
        restrictions set forth herein shall automatically be extended by the number
        of
        days that the court determined the 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
        the
        Employee its reasonable costs and attorney fees incurred by the Company in
        seeking enforcement of these provisions.

      


      (iii)           If
        the Employee should breach any of the provisions of Section 7(a) or (b),
        the Employee shall be required to repay to the Company any and all benefits
        payable under Sections 6(e) and (f) as a consequence of the termination of
        his employment.

      


      8.           Miscellaneous.

      


      (a)           Special
        Provision Regarding Section 409A of the Internal Revenue
        Code.  Notwithstanding anything in this
        Agreement to the contrary, to the extent that any amount payable under this
        Agreement may constitute an amount payable under a “nonqualified deferred
        compensation plan,” as defined in Section 409A of the Internal Revenue Code of
        1986, as amended, (the “Code”) such payment will be made by the Company in
        compliance with any applicable requirements of Code Section 409A (including
        the
        requirement that payment be delayed for six (6 ) months following the Employee’s
“separation of service” if the Employee is a “specified employee” under Code
        Section 409A, to the extent applicable).

      


      (b)           Other
        Rights.  This Agreement shall not
        prevent or limit the 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 the Employee may qualify, nor shall this
        Agreement limit or otherwise affect such rights as the Employee has under
        any
        other agreements with the Company or any of its subsidiaries.  Amounts
        which are vested benefits or which the 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 the 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.


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      (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, the
        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.

      


      (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:  Donald
        F. Schenkel

      116
        East
        Berry Street, Suite 100

      Fort
        Wayne, IN  46802

      


      
        	
                 

              	
                If
                  to Employee:

              	
                Michael
                  D. Cahill, CPA

              


      

      5031
        Sweetwater Place

      Fort
        Wayne, Indiana 46835

      


      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:	
                 

              	 	 	 
	Its:	
                 

              	 	 	 
	Date:	
                 

              	 	
                Date:

              	 


      

    

     

     

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