Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT
AGREEMENT (this “Agreement”) is entered into as of July 11, 2018, by and between CITY NATIONAL BANK of
West Virginia, (“City National”), and Bruce VanHorn (the “Employee”).

 

WITNESSETH:

 

WHEREAS, concurrently
with the execution and delivery of this Agreement, City Holding Company, a West Virginia corporation and the sole shareholder of
City National entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Poage Bankshares, Inc.,
a Maryland corporation sole shareholder of Town Square Bank, for the purpose, among others, of causing the merger of Town Square
Bank with and into City National (the “Merger”);

 

WHEREAS, the
Employee has knowledge, experience and expertise in the area of banking and financial services, and City National wishes to obtain
the benefits of the Employee’s knowledge, experience and expertise; and

 

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

 

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.            Condition
and Effective Date.

 

1.1           Closing.
The date that the Merger closes is called the “Closing Date.” This Agreement shall be null and void
if the Merger does not close for any reason.

 

1.2           Effective
Date. Subject to Section 1.1, this Agreement is effective as of the date set forth in the introductory paragraph (the “Effective
Date”).

 

2.            Employment.

 

2.1           Position
and Duties. Subject to the terms set forth herein, upon the Closing Date, City National agrees to employ the Employee in
the position of Executive Vice President, and the Employee hereby accepts such employment. The Employee shall have the duties consistent
with his role as determined by President and CEO of City National, including, but not limited to originating and servicing commercial
client relationships; supervising others in the commercial lending function; training, mentoring and developing staff; and interact
with other City National management to grow and build City National’s various product lines. During the term of the Employee’s
employment, the Employee will devote his best efforts and substantially all of his business time and attention (except for vacation
periods and reasonable periods of illness or other incapacities permitted by City National’s general employment policies
or as otherwise set forth in this Agreement) to the business of City National. Such services shall be performed in at such other
location as City National may reasonably require.

 

     

     

    

 

2.2           Term.
The Employee’s employment shall commence on the Closing Date and shall continue for two years by the mutual agreement of
City National and the Employee unless terminated in accordance with the provisions of this Agreement (the “Employment
Period”). After the expiration of two years, the Employee may continue his employment with City National as an at-will
employee.

 

3.            Compensation.

 

3.1           Base
Salary. As consideration for the Employee’s services as an employee, City National agrees to pay the Employee,
upon the Closing Date, and the Employee agrees to accept, an annual base salary of $202,000 (the “Base Salary”).
It is further understood and agreed that during the term of the Employee’s status as an employee, the Employee shall be subject
to the withholding of taxes as required by law.

 

3.2           Bonus.
Employee is eligible for annual cash bonus based upon growth in the commercial loan portfolio for which Employee
is responsible (the “Employee Portfolio”). Employee will have a target bonus of $50,000 tied to specific loan
growth goals. The actual bonus paid could be smaller than $50,000 if loan growth is less than goal. The actual bonus may also be
more than $50,000 if loan growth exceeds goals, but can be no more than 150% of the target amount (or $75,000) under contraints
common within City’s commercial loan incentive plan. The cash bonus will be paid after the end of each fiscal year consistent
with the form and timing of payment of cash bonuses to other City National executives. Employee and City National will work together
in good faith to establish, within 30 days after the date of this Agreement, the details of the bonus plan, including without limitation
determining loans included in the Employee Portfolio, growth targets and portfolio quality standards, which details will be set
forth in Schedule A to be appended to this Agreement.

 

3.3           Benefits.
So long as the Employee is employed by City National, the Employee shall be entitled to participate in any benefit plans or programs
now or hereafter provided or made available to employees of City National generally; provided, however, that nothing contained
in this Agreement shall require City National to establish, maintain or continue any such benefits or programs already in existence
or hereafter adopted for employees or executive officers of City National.

 

4.            Termination.

 

4.1           Termination
of Employment with City National.

 

 (a)          Death
or Disability. If the Employee dies, or becomes disabled to the extent that the 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 the Employee’s death or conclusion of the Disability Period, as applicable.

 

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 (b)          Termination
for Cause. If this Agreement is terminated by City National for Cause (as defined herein), this Agreement shall cease and terminate
as of the date of termination of the Employee. “Cause” shall be defined as (i) commission of a willful act of
dishonesty, including but not limited to theft or embezzlement, in the course of the 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, dishonesty,
or moral turpitude; (iii) the Employee’s continued, habitual intoxication or performance under the influence of controlled
substances during working hours; (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 City National shall have advised the Employee in writing of its intention
to terminate the Employee’s employment in accordance with the provisions of this subsection; (v) material breach of any violation
of any material provision of this Agreement or of any employment, noncompetition, confidentiality or other agreement now or hereafter
in effect between the Employee and City National and/or agreements with City National’s regulatory agencies; (vi) a willful
violation by the Employee of any applicable law or significant policy of City National or an affiliate causing material harm to
City National or an affiliate, regardless of whether the violation leads to criminal prosecution or conviction; (vii) Employee
is removed from office or permanently prohibited from participating in City National’s affairs by an order issued under Section
8(e)(4) or Section 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. § 1818(e)(4) or (g)(1) or otherwise removed or
permanently prohibited from participating in City National’s or an affiliates’ activities by the any of City National’s
regulatory agencies; or (viii) the Employee’s willful and continued personal misconduct, action, inaction, inability or refusal
to perform the duties and responsibilities of an Executive Vice President which shall not have been cured within thirty (30) days
after City National shall have advised the Employee in writing of its intention to terminate the Employee’s employment in
accordance with the provisions of this subsection.

 

 (c)          Termination
by Employee. The Employee may terminate his employment with City National at any time and for any reason.

 

 (d)          Employee’s
Rights Upon Termination with City National. In the event that this Agreement is terminated with Cause under this Section
4.1, the Employee shall receive the Base Salary and all other compensation and benefits earned through the Employee’s final
day of employment with City National, subject to the terms of this Agreement. Upon termination for any reason under this Section
4.1, the Employee shall be required to deliver to City National any of City National’s assets in the possession of the Employee.
The Employee’s rights upon termination pursuant to this Section 4.1 shall be subject to determinations of safety, soundness
and fairness of City National’s regulatory entities.

 

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5.            Restrictive
Covenants.

 

5.1           Confidential
Information. The Employee acknowledges and agrees that in connection with his employment by City National, the Employee
will have access to certain confidential and proprietary information owned by and related to City National. For purposes of this
Agreement, “Confidential Information” means any proprietary information of or related to City National, 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 City National, 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; (v)
any communications, reports, memorandums or other information provided by any bank regulatory agency; and (vi) 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 the Employee’s knowledge,
did not obtain such information from City National and who imposes no obligation of secrecy on the Employee with respect to such
information.

 

5.3           Non-Disclosure
of Confidential Information. The 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 City National which consent may be withheld in City National’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 the Employee shall
notify City National as promptly as practicable and, if possible, prior to making such disclosure. The Employee shall use his best
efforts to prevent any such disclosure by others.

 

5.4           Non-Competition/Non-Solicitation.
If the employment of Employee terminates for any reason, then Employee agrees that he will not directly or indirectly, either as
principal, agent, employee, employer, co-partner, or in any other individual or representative capacity whatsoever engage in the
banking and/or the financial services business which includes, but is not limited to, commercial banking, consumer banking, retail
banking, bank management, mortgage brokerage, bank marketing, bank product marketing, or the savings and loan business or mortgage
business, or any other businesses in which City National is involved. This non-compete shall apply to the following geographical
area in any county of any state in which the Company or City National Bank maintains offices. This non-competition provision shall
be in effect for a period of two (2) years beginning immediately after the separation of employment. However, if litigation and/or
arbitration is commenced by the City National or Employee directly or indirectly pertaining to this non-competition provision or
the non-solicitation provision herein below, then the non-competition and non-solicitation provision(s) herein shall begin upon
separation of employment, continue through arbitration and/or litigation and terminate two years after entry of a final non-appealable
ruling by a court and/or arbitration tribunal of competent jurisdiction.

 

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If the employment of
Employee terminates for any reason, then for a period of two (2) years after employment with City National, the Employee agrees
not to solicit or assist any person in soliciting, any depositors, customers or employees of City National, or directly or indirectly
induce or attempt to persuade any current or former employees of City National to terminate their employment with the City National.

 

5.5           Injunction.
The Employee and City National acknowledge and agree that a violation of the covenants set forth in this Section 5 would cause
irreparable damage to City National, and that City National would not have an adequate remedy at law. The Employee therefore agrees
that City National, in addition to all other remedies available under law or equity, shall be entitled to an injunction (without
posting any bond whatsoever) restraining such conduct by the Employee in the event of a breach or threatened breach by the Employee
of this Agreement or any of the terms or conditions hereof.

 

6.            Arbitration.
Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators, in Charleston, West Virginia, in accordance with the rules of the American Arbitration Association
then in effect. The panel of arbitrators shall be determined as follows: City National will choose one arbitrator, the Employee
will choose one arbitrator, and the third arbitrator will be chosen by the two arbitrators chosen by the Employee and City National.
Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that City National
shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any violation of
the provisions contained herein, and the Employee hereby consents that such restraining order or injunction may be granted without
the necessity of City National posting any bond. The expenses of arbitration shall be borne by the party who was found to be in
breach of the Agreement. The 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 subject matter
hereof 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.            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.

 

9.            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.

 

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

 

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11.          Assignment.
The Employee may not assign any rights under this Agreement without the prior written consent of City National. If City National,
or any entity resulting from any stock purchase, merger or consolidation with or into City National, 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.

 

12.          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.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	CITY NATIONAL BANK OF WEST VIRGINIA:	 	 
	 	 	 	 
	By:	/s/ Charles R. Hageboeck	 	 
	 	Charles R. Hageboeck, President and CEO	 	 
	 	 	 	 
	EMPLOYEE:	 	 
	 	 	 
	/s/ Bruce VanHorn	 	 
	Bruce VanHorn	 	 

 

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Schedule A

 

Cash Bonus Details

 

To be prepared within 30 days after the date of this Agreement

 

    	 	8Exhibit 10.2

 

SETTLEMENT AGREEMENT

 

This Settlement Agreement
(the “Agreement”) is entered into as of July 11, 2018 by and among Bruce VanHorn (the “Executive”),
Poage Bankshares, Inc., a Maryland corporation (“Poage”), Town Square Bank, a wholly-owned subsidiary of Poage
(“Town Square Bank”), and City Holding Company, a West Virginia corporation (“City”).

 

WITNESSETH:

 

WHEREAS, concurrently
with the execution of this Agreement, City and Poage are entering into an Agreement and Plan of Merger, dated as of July 11, 2018
(the “Merger Agreement”), and all capitalized terms not defined herein shall have the meaning set forth in the
Merger Agreement; and

 

WHEREAS, Poage,
Town Square Bank, and the Executive desire to enter into this Agreement, which shall supersede in its entirety the Change in Control
Agreement by and between Town Square Bank and the Executive, dated March 18, 2017 (the “Prior Agreement”), effective
immediately prior to the Effective Time of the Merger, and in lieu of any rights and payments under the Prior Agreement, the Executive
shall be entitled to the rights and payments set forth herein.

 

NOW THEREFORE,
in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Executive, Poage, and Town Square Bank agree as follows:

 

1.             Cancellation
of Prior Agreement. As of the Effective Date (the “Effective Date” of this Agreement), the Prior Agreement
shall be cancelled in its entirety and the parties thereto shall have no further rights or obligations thereunder. In the event
that the Merger Agreement is terminated or otherwise cancelled, this Agreement will be null and void ab initio, and the Prior Agreement
will remain in full force and effect.

 

2.            Settlement.

 

2.1           Cash
Settlement. Provided the Executive has remained employed with Poage and Town Square Bank to and including the Effective Date,
the Executive shall be entitled to, and have a non-forfeitable right to, a cash payment in an amount equal to $586,151 (“Cash
Settlement”), paid in a lump sum, less required tax withholding, on the day immediately prior to the Effective Date.
For the avoidance of doubt, the payment of the Cash Settlement under this Agreement shall not release Poage or Town Square Bank,
as applicable, from any of the following obligations: (a) obligations to pay to the Executive accrued but unpaid wages earned
up to the Effective Time of the Merger to the extent required by applicable law; (b) the payment of any of the Executive’s
vested benefits under the tax-qualified plans of Town Square Bank, including any benefits that become vested as a result of the
Merger; (c) obligations regarding accelerated vesting of equity awards, if any, under any equity awards granted by Poage to
the Executive and outstanding immediately prior to the Effective Time; (d) the payment of the Merger Consideration with respect
to the Executive’s common stock of Poage as contemplated by Section 3.01 of the Merger Agreement; or (e) rights to indemnification
under applicable corporate law, the organizational documents of Poage or Town Square Bank, as an insured under any director’s
and officer’s liability insurance policy new or previously in force, or pursuant to Section 6.18 of the Merger Agreement.

 

     

     

    

 

2.2           Waiver
of Claims. Except as expressly set forth in Section 2.1 of this Agreement, Executive hereby irrevocably and forever
releases and discharges Poage and Town Square from each and every claim, charge, liability, complaint, expense, cost and demand
Executive has or may have against Poage or Town Square whether related to Executive’s employment by, or severance of employment
from, Poage or Town Square or otherwise.

 

3.             Complete
Satisfaction. In consideration of the payment of the Cash Settlement, the Executive, Poage and Town Square Bank hereby agree
that the full payment of the Cash Settlement, as determined in accordance Section 2.1, shall be in complete satisfaction
of all rights to payments due to Executive under the Prior Agreement.

 

4.             Code
Section 409A Compliance. The intent of the parties is that payments under this Agreement either be exempt from or comply with
Section 409A of the Code and the Treasury Regulations and guidance promulgated thereunder and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted to be in compliance therewith. A termination of employment, as used in this Agreement,
shall mean a Separation from Service within the meaning of Section 409A of the Code.

 

5.             General.

 

5.1           Heirs,
Successors, and Assigns. The terms of this Agreement shall be binding upon the parties hereto and their respective heirs, successors,
assigns and legal representatives.

 

5.2           Final
Agreement. This Agreement represents the entire understanding of the parties with respect to the subject matter hereof and
supersedes all prior understandings, written or oral. The terms of this Agreement may be changed, modified, or discharged only
by an instrument in writing signed by each of the parties hereto.

 

5.3           Withholdings.
Poage and Town Square Bank may withhold from any amounts payable under this Agreement such federal, state, or local taxes as may
be required to be withheld pursuant to applicable law or regulation.

 

5.4           Governing
Law. This Agreement shall be construed, enforced, and interpreted in accordance with and governed by the laws of the Commonwealth
of Kentucky, without reference to its principles of conflicts of law, except to the extent that federal law shall be deemed to
preempt such state laws.

 

5.5           Voluntary
Action and Waiver. The Executive acknowledges that by his free and voluntary act of signing below, the Executive agrees to
all of the terms of this Agreement and intends to be legally bound thereby. The Executive acknowledges that he has been advised
to consult with an attorney prior to executing this Agreement.

 

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5.6           Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument.

 

6.             Effectiveness.
Notwithstanding anything to the contrary contained herein, this Agreement shall be subject to consummation of the Merger in accordance
with the terms of the Merger Agreement, as the same may be amended by the parties thereto in accordance with its terms. In the
event the Merger Agreement is terminated for any reason or the Merger does not occur, this Agreement shall be deemed null and void.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF,
Poage and Town Square Bank have each caused this Agreement to be executed by their duly authorized officers, and the Executive
has signed this Agreement, effective as of the date first above written.

 

	 	EXECUTIVE:
	 	 
	 	/s/ Bruce VanHorn
	 	Bruce VanHorn
	 	 	 
	 	Poage Bankshares, Inc.
	 	 	 
	 	By: 	/s/ Thomas L. Burnette
	 	Name: 	Thomas L. Burnette
	 	Title: 	Chairman
	 	 	 
	 	TOWN SQUARE BANK
	 	 	 
	 	By: 	/s/ Thomas L. Burnette
	 	Name: 	Thomas L. Burnette
	 	Title:	Chairman
	 	 	 
	 	CITY HOLDING COMPANY
	 	 	 
	 	By: 	/s/ Charles R. Hageboeck
	 	Name: 	Charles R. Hageboeck
	 	Title:	President and CEO

 

[SIGNATURE PAGE TO THE SETTLEMENT AGREEMENT]

 

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