Document:

Exhibit 10.1

      

    

    
      Turning Point Brands. Inc.

      5201 Interchange Way

      Louisville, KY 40229

       

      March 23, 2021

      

      

      Luis Reformina

      51 Forest Avenue

      Apt 108

      Old Greenwich, CT 06870

       

      Dear Mr. Reformina:

       

      As discussed, Turning Point Brands, Inc., together with any successor thereto ("Turning Point" and, together with its applicable employing subsidiaries, the "Company"), agrees to retain your services on the
        terms, provisions and conditions set forth in this employment letter (this "Agreement"). If you find these terms, provisions and conditions acceptable, please sign this
        Agreement where indicated and return it to me as soon as possible. It will become effective on May 1, 2021 (the "Effective Date"). As of the Effective Date, this
        Agreement shall supersede and replace, in its entirety. any prior agreement by and between you and Turning Point and any of its subsidiaries (the "Prior Agreement"), and
        you shall no longer have any rights or benefits thereunder.

       

      Position: Unless and until changed by the Company, your job position and title will be Senior Vice President & CFO of the Company.

       

      Duration of Employment: You will continue to be
        employed by the Company for an initial term of one year, commencing on the Effective Date and ending on the one-year anniversary of the Effective Date (the "Initial Term"),
        and your employment period will be automatically renewed at the expiration of the Initial Term, or upon the applicable anniversary thereof, whichever applicable, unless either you or the Company provides the other with a written notice of
        non-renewal at least 60 days prior to the applicable expiration date (the Initial Term and any renewal period(s) together. the "Term").

       

      Location of Employment: You will be employed by
        the Company based out of Darien Connecticut.

       

      Salary: Your annual base compensation ("Salary") will be $365,000.00 per calendar year, unless adjusted by the Board of Directors of Turning Point (the "Board") in its sole discretion. Salary will be disbursed in
        periodic installments throughout the year in accordance with the Company's regular payroll cycle and policies.

       

      Annual Bonus: You may be eligible to earn an
        annual bonus with a target of 50% of your Annual Salary pursuant to the terms and conditions of the Company's annual bonus award program as may be in effect from time to time. Eligibility for any annual bonus will be based on your achievement of
        designated performance metrics as set forth in the Company's annual bonus award program. Such eligibility and the amount, if any, of the annual bonus shall be determined by the Board in its sole discretion.

       

      Compensation Review: The Board intends to review your compensation on an annual basis, with the first such review to
        occur in or around March 2022.

       

      Annual Paid Vacation Allowance: Three weeks,
        subject to the terms and conditions herein and in the Company's vacation policies as in effect from time to time.

       

      
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      Severance Benefits Period: A period of 12 months following a termination of your employment with the Company and its subsidiaries by the Company without Cause or resignation of your employment with the
        Company and its subsidiaries by you for Good Reason, other than in the event of a Change of Control. If you resign for Good Reason or are terminated by the Company without Cause within one year following a Change of Control the Severance Benefits
        Period shall be a period of 24 months following such termination of employment.

       

      Restricted Period: The Term plus an additional 12
        months following any Separation, unless such Separation triggers a Severance Benefit Period of 24 months, in which case the Restricted Period shall continue for 24 months following the Term.

       

      Stock Incentives: If you are eligible for stock incentives, separate plan documents will be provided to you.  Such plan may be authorized, amended, or discontinued by the Board in its sole discretion.  Unless
        specifically provided for in this Agreement, nothing in this Agreement shall have any effect on any existing agreements regarding the Company’s equity incentive programs in which you participate, have participated or are eligible to participate,
        including without limitation restricted stock, options, common stock, or any other equity instrument (“Equity Incentive Programs”).

       

      Additional Benefits: You will be entitled to
        participate in the medical, dental and 401(k) savings benefit plans offered to the Company's employees pursuant to the terms and conditions of each such benefit plan in effect from time to time, which may be authorized, amended or discontinued by
        the Company in its sole discretion. The Company will provide a description of the group benefit programs and enrollment forms.

       

      Additional Terms and Conditions

       

      1. Your Representations: You represent that you are eligible to accept and continue employment, and that you have not previously been, are not currently and will not be subject to any agreement or
          obligation which would bar or limit your ability to perform your duties and responsibilities with the Company. You also represent that all information you have submitted to the Company as part of any application process and your prior employment
          with the Company, including without limitation your resume, application for employment and employment records, is true and complete.

       

      2. Duties and Responsibilities: You will be responsible for carrying out all duties and responsibilities associated with your Position, as set forth in a separate Job Description or similarly styled
          document provided to you, and as otherwise directed by the Company, which may include travel as necessary consistent with your prior employment with the Company. Additional responsibilities and necessary travel may be added, or your Position
          changed, at the Board's sole discretion, from time to time, without written modification of this Agreement. You will be subject to, and agree to abide by, such rules, policies and procedures as the Company maintains (including, but not limited
          to, the Turning Point Brands, Inc. Code of Business Conduct and Ethics (as amended from time to time, the "Code of Conduct and Ethics")) or may from time to time
          establish with respect to executives, employees in general, standard operating procedures, business operations, etc.

       

      3. Use of Vacation: Your Annual Paid Vacation Allowance may be used at any time, subject to the Company's policies regarding vacations. Vacation days will not carry over from one year to the next, and
          no compensation will be paid for unused vacation (except as may be required by law upon separation from employment).

       

      4. Separation from Employment: You will, upon separation from employment with the Company and its subsidiaries for any reason (such as termination, resignation. death or disability) (each, a "Separation"), receive such salary and other benefits as have accrued as of the date and time of Separation, and as may otherwise be required by law, as well as such Salary,
          bonuses and benefits as may be due and owing under this Agreement. Notwithstanding the forgoing, in the event that the Company determines in good faith that your Separation is not considered a "separation from service" under Treasury Regulation §
          1.409A-1(h) because (a) you have not separated but have changed status to a part time employee, consultant or independent contractor performing more than 20% of the average level of bona fide services (whether as an employee, consultant or
          independent contractor) you performed over the immediately preceding 36-month period, or (b) you are continuing employment with another entity that is considered a single entity with the Company ("Employer Group") under Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended (the "Code"), any Severance Benefits to which you may be entitled under other provisions of this Agreement shall begin
          immediately when your status changes such that the Company determines that you have "separated from service" under Treasury Regulation § 1.409A-I (h). For this purpose, service performed as an employee or as an independent contractor is counted,
          except that service as a member of the board of directors of a member of the Employer Group is not counted unless termination benefits under this Agreement are aggregated for purposes of Section 409A of the Code with benefits under any other
          Employer Group plan or agreement in which you also participate as a director.

       

        

      
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      Notwithstanding any provisions of this Agreement to the contrary, if you are a "specified employee" (within the meaning of Section 409A of the
        Code and determined pursuant to procedures adopted by the Company) at the time of your separation from service and if any portion of the payments or benefits to be received by you upon separation from service would be considered deferred
        compensation under Section 409A of the Code, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following your separation from service shall instead be paid or made available, with interest at
        the Wall Street Journal prime rate as of the date of separation from service, on the earlier of (i) the first business day of the seventh month following the date of your separation from service or (ii) your death.

       

      4.1 Resignation: You may resign at any time for any reason by providing the Company with at least two months’ notice prior to your Separation. In such event, the Company may, in the
        Board's sole discretion, choose to relieve you of your duties prior to the expiration of the notice period and pay you two months’ compensation or your notice period, whichever is shorter. If you resign (other than for Good Reason), you shall not
        be entitled to receive the Severance Benefits. If you resign for Good Reason, you shall be entitled to receive all Severance Benefits, provided that you have executed and delivered a Release and Severance Agreement in the form of Exhibit A attached hereto (as may be modified by the Company due to subsequent changes in the law), and all applicable revocation periods relating to the release expire,
        within 55 days following the date of such termination of employment.

       

      4.2 Good Reason: As used herein, the term "Good Reason" means any of the following without your consent:
        (i) a material diminution in your duties, position, authorities or responsibilities; (ii) the failure by the Company to pay or provide to you, within 30 days after receipt of a written demand therefor, any material amount of compensation or expense
        reimbursement or any benefit which is due, owing and payable pursuant to the terms hereof or of any applicable plan, program, arrangement or policy; (iii) a reduction in your Salary, other than a reduction generally applicable to similarly situated
        executives of the Company; (iv) a material reduction in your employee benefits, other than a reduction generally applicable to similarly situated executives of the Company; (v) the breach in any material respect by the Company of any of its other
        obligations or agreements set forth herein; (vi) the Company requires you to be based at any office or location more than 50 miles from the Location of Employment, or (vii) the Company gives notice that it does not wish to renew this Agreement upon
        expiration of the Term. A termination for Good Reason shall not occur unless: (x) you provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within 90 days after the first occurrence of such
        circumstances, (y) the Company fails to cure such Good Reason event(s) within 30 days following receipt of such notice to cure such circumstances in all material respects, and (z) following the Company's failure to cure during the 30 day cure
        period, you terminate employment no later than 90 days after the expiration of such period.

       

      4.3 Change of Control: As used herein, the term "Change of Control" shall mean:

       

      (a) any sale, lease, exchange, or other disposition (in one transaction or a series of related transactions) of all or
        substantially all of the assets of Turning Point. other than a transaction or series of transactions in which the transferee is controlled by the Management Group;

       

      (b) a majority of the Board shall consist of Persons who are not Continuing Directors, as the case may be; or

       

      

      
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      (c)(i) any Person or group of related Persons (other than the Management Group), for purposes of Section 13(d) of the Exchange
        Act, becomes the beneficial owner of the power, directly or indirectly, to vote or direct the voting of securities having more than fifty percent (50%) of the ordinary voting power for the election of directors of Turning Point or (ii) any Person,
        together with its Affiliates, becomes the owner, directly or indirectly, of more than sixty-six and two-thirds percent (66 2/3%) of the economic interests of Turning Point.

       

      "Affiliate" shall mean, with respect to a Person,
        any entity (i) that, directly or indirectly, is controlled by, controls or is under common control with, the Person or (ii) in which the Person has a significant equity interest.

       

      "Continuing Director" means, as of any date of
        determination, any Person who (a) was a member of the Board on the Effective Date or (b) was nominated for election or elected to the Board with the affirmative vote of a majority of the Continuing Directors who were members of such Board at the
        time of such nomination or election (other than as a result of any actual or threatened proxy contest).

       

      "Exchange Act" shall mean the Securities Exchange
        Act of 1934, as amended.

       

      "Management Group" shall mean one or more of the
        members of the senior executive management of Turning Point on the Effective Date.

       

      "Person" shall mean any individual, corporation.
        partnership, association, limited liability company, joint-stock company, trust, unincorporated organization, government, political subdivision or other entity.

       

      4.4 Death or Disability: The employment relationship will be severed, and this Agreement terminated, upon your death or disability. For purposes of this Agreement, you will be
        considered "disabled" if you are so considered under any applicable disability insurance policy maintained by the Company, or if no such disability insurance policy is in
        effect, on the date that a physician mutually agreed to by the parties determines that you are or will be unable by reason of illness, accident or other physical or mental condition to perform your duties for a continuous period of 120 days. or for
        a period of more than 120 days in any 12-month period, and that there is no objectively reasonable accommodation that would allow you to perform your duties.

       

      In the event of the termination of your employment due to death or disability, notwithstanding anything to the contrary in this
        Agreement, the Company will pay a lump sum payment to you in amount equal to the cost of COBRA coverage for continued medical coverage for you (except in the event of death) and your dependents for six months, payable on the 60th day following the
        date of such termination of employment. Moreover, you may be eligible for disability benefits under the Company's disability benefits plan in accordance with the terms of such plan, if any, in effect at such time.

       

      4.5 Termination Without Cause: The Company may terminate this Agreement and your employment hereunder without your consent, for no stated reason, or for a stated reason but without
        Cause, with or without notice. If you are terminated by the Company without Cause (as defined below), you shall be entitled to receive the Severance Benefits, provided that you have executed and delivered a Release and Severance Agreement in the
        form of Exhibit A attached hereto (as may be modified by the Company due to subsequent changes in law), and all applicable revocation periods relating to the release
        expire, within 55 days following the date of such Separation.

       

      4.6 Termination for Cause: Your employment with the Company may be terminated by the Company, and without your consent, for Cause at any time, with or without notice. You shall not be
        entitled to receive the Severance Benefits if you are terminated for, or later are determined to have failed to comply with this Agreement for, any one or more of the following reasons ("Cause"):

        

      

      
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              Your failure to render required or expected services in accordance with your Job Description or Position after being provided at least 10 days' prior written notice
                of your failure to render such services;

            

       

      	

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              You are in breach of any of the terms and conditions of this Agreement. if not cured within 10 days after written notice thereof;

            

       

      	

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              Insubordination. consisting of your continued failure to take specific action that is material to the operation of the Company and within your individual
                control and consistent with your Position, duties and responsibilities, after being provided at least 10 days' prior written notice of your failure to take for such action, provided that you have not, in good faith, objected to such action
                as either a breach of your fiduciary duties, or on legal grounds;

            

       

      	

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              Your material breach of any other agreement between you and the Employer Group if not cured within 10 days after written notice thereof, or any material violation
                of any rule, policy, procedure or other requirement of the Company;

            

       

      	

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              Your commission of an act of fraud, embezzlement or similar dishonest act against any member of the Employer Group or any customer, client or business associate of
                any member of the Employer Group;

            

       

      	

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              Your conviction for any felony or crime of dishonesty (as determined by a court of competent jurisdiction, and which is not subject to further appeal);

            

       

      	

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              Any egregious or unwarranted conduct by you that materially discredits any member of the Employer Group or is materially detrimental to the reputation or standing
                of any member of the Employer Group; or

            

       

      	

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              Willful misconduct that is demonstrably deliberate on your part, or gross negligence.

            

       

      5. Severance Benefits: The Severance Benefits payable in certain Separation circumstances as provided herein shall consist of all of the following:

      

      

      5.1 Severance Compensation: Continuation of your then current Salary (or, in the case of a Good Reason termination due to a reduction in Salary, at the Salary
        in effect immediately prior to such reduction) during the Severance Benefits Period ("Severance Pay"). Any Severance Pay will be paid to you incrementally, in accordance with the Company's regular payroll cycle, with the first such payment beginning on the 60'h day following your Separation, and the first
        such payment will include all accrued amounts during the 60-day period from your Separation date until the 60th day following your Separation date. You will also receive a severance bonus equal to the average of the annual cash bonuses
        received by you for the 24 months prior to your Separation ("Severance Bonus"). In the event of the termination of your employment by the Company without Cause or
        resignation by you for Good Reason within one year following a Change of Control, your Severance Bonus shall instead be equal to two times the average of the annual cash bonuses received by you for the 24 months prior to your Separation. Any
        Severance Bonus will be paid in two equal installments — the first installment on the later of (i) when all other Company annual bonuses, if awarded, are next paid, or, if not awarded, when such bonuses would have next been paid in April of the
        year following the year of services, and (ii) the 60th day following your Separation, and the second installment at the end of the Restricted Period. Severance Pay and Severance Bonus payment timing shall also be subject to the "specified employee"
        delay in paragraph 4 above for any portion of such amounts that are subject to Section 409A of the Code. Normal payroll taxes and deductions will be withheld from any Severance Pay and Severance Bonus payments.

       

      5.2 Health Benefits Stipend and Access: The Company will pay a lump sum payment to you in amount equal to the cost of COBRA coverage for continued medical coverage for you and your
        dependents for 12 months, payable on the 60th day following the date of your Separation, and, to the extent determined by the Company to be permitted by the applicable plans and applicable laws (without the imposition of any excise taxes
        or other penalties), allow you access to group health coverage at the COBRA premium rate payable by you on an after-tax basis, during the Severance Benefit Period, plus the period of actual COBRA coverage to begin at the end of the Severance
        Benefit Period.

       

      

      
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      5.3 Other Additional Benefits: All additional benefits and stock incentive rights (if any) will cease and expire upon Separation, unless otherwise provided in this Agreement or by the
        separate written terms of those benefits.

       

      5.4 280G Cap: Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by you (including any payment or benefit
        received in connection with a Change of Control or the termination of your employment related to such a Change of Control, whether pursuant to the terms of this Agreement or any other plan, program. arrangement or agreement) (all such payments and
        benefits, together, the "Total Payments") would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision
        thereto (the "Excise Tax"), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan,
        program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total
        Payments will only be reduced if the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income and employment taxes on such reduced Total Payments and after taking into
        account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to the net amount of such Total Payments without such reduction (but after subtracting the net amount of
        federal, state, municipal and local income and employment taxes on such Total Payments and the amount of Excise Tax to which you would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized
        deductions and personal exemptions attributable to such unreduced Total Payments).

       

      In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that
        are payable in cash that are valued at full value under Treasury Regulation § 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity
        valued at full value under Treasury Regulation § 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24), will next be reduced; (iii) payments that are
        payable in cash that are valued at less than full value under Treasury Regulation § 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less
        than full value under Treasury Regulation § 1.2800-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24), will next be reduced; and (v) all other non-cash
        benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payment and payments and
        benefits due in respect of any equity not subject to Section 409A of the Code, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A of the Code as deferred compensation.

       

      For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no
        portion of the Total Payments the receipt or enjoyment of which you shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of
        the Total Payments will be taken into account which, in the opinion of a nationally recognized tax counsel ("Tax Counsel") selected by the Company and reasonably
        acceptable to you and the accounting firm which was, immediately prior to the change in control, the Company's independent auditor (the "Auditor"), does not constitute a
        "parachute payment" within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 2800(6)(4) (A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the
        opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the "base amount" (as set forth in Section 2800(b)(3) of the Code) that is allocable
        to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d) (3) and (4) of
        the Code.

       

      

      
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      At the time that payments are made under this Agreement, the Company will provide you with a written statement setting forth the manner in which
        such payments were calculated and the basis for such calculations, including but not limited to, any opinions or other advice the Company received from Tax Counsel, the Auditor, or other advisors or consultants (and any such opinions or advice
        which are in writing will be attached to the statement). If you object to the Company's calculations, the Company will pay to you such portion of the Total Payments (up to 100% thereof) as you determine is necessary to result in the proper
        application of this subsection. All determinations required by this subsection (or requested by either you or the Company in connection with this subsection) will be at the expense of the Company. The fact that your right to payments or benefits
        may be reduced by reason of the limitations contained in this subsection will not of itself limit or otherwise affect any other rights you have under this Agreement.

       

      If you receive reduced payments and benefits by reason of this subsection and it is established pursuant to a determination of a court of
        competent jurisdiction which is not subject to review or as to which the time to appeal has expired, or pursuant to an Internal Revenue Service proceeding, that you could have received a greater amount without resulting in any Excise Tax, then the
        Company shall thereafter pay you the aggregate additional amount which could have been paid without resulting in any Excise Tax as soon as reasonably practicable.

       

      5.5 Resignations: Following
        the termination of your employment for any reason. if and to the extent requested by the Board, you hereby agree to resign from all fiduciary positions (including as trustee) and all other offices and positions you hold as of the date of such
        termination; provided, however, that if you fail to tender your resignation after the Board has made such request. then you will be deemed to have resigned from such offices and positions.

       

      6.        Indemnification: The Company shall, to the fullest extent to which it is empowered to do so by applicable law, defend, indemnify and hold you harmless from and against all claims, demands,
          lawsuits, liabilities, losses, damages, penalties, fines, costs and expense (including, but not limited to, reasonable related attorneys' fees) arising from any actual, threatened, pending or completed action. suit or proceeding, whether civil,
          criminal, administrative, investigative or otherwise, to which you are or are threatened to be made a party by reason of your services as an officer and/or director of the Company.

       

      7.        Non-Disclosure; Non-Use: You agree not to disclose, give, sell or otherwise divulge the "Confidential
              Information" (as defined in the Code of Conduct and Ethics) to any other person or entity at any time without the Company's prior written consent. You further agree not to (i) use any of the Confidential Information for your own
          account for or for the account of any other person or entity or (ii) use or retain, without the Company's prior written consent, any figures, calculations, letters, papers, drawings, computer printouts, computer discs or tapes, or copies thereof
          or other Confidential Information of any type or description pertaining to the Company, except in furtherance of the Company's interests.

       

      You further agree that, upon your Separation, that you will (i) return physical copies of the Company's information and Confidential Information
        in your possession. under your control or removed from the Company's premises by you or under your direction, (ii) destroy all electronic copies of the Company's information and Confidential Information in your possession, under your control or
        which was copied or removed from the Company's premises or equipment by you or under your direction and (iii) return all Company property in your possession or under your control, including without limitation the following: Company computers,
        mobile devices, cellular telephones, Company automobiles and keys and access cards to Company property.

       

      In the event that you are legally compelled by regulatory or legal process to disclose the Confidential Information, the foregoing confidentiality
        obligations shall not apply to you with respect to such information, provided that you have given the Company prompt prior written notice of such compulsion, cooperate with the Company in connection with any of its efforts to prevent or limit the
        scope of such disclosure and, following completion of such efforts, you only disclose such information as required under such regulatory or legal process then applicable to you.

       

      Nothing in this paragraph 7, or in the remainder of this Agreement, shall prohibit you from filing a charge with any government agency. including
        the U.S. Equal Employment Opportunity Commission or any similar state or local fair employment practices agency, or from talking to or cooperating in any government investigation by the U.S. Equal Employment Opportunity Commission, any similar
        state or local fair employment practices agency, or the Securities and Exchange Commission, and no notice to the Company is required under these circumstances.

       

      

      
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      8.         Non-Competition: You acknowledge and agree that, during the course of employment with the Company, you may: (i) receive significant training in, and generate and use, the Company's good will and experience; (ii) be exposed to confidential aspects of the Company's business and have access to and became familiar with
          Confidential Information, and (iii) perform services for the Company that are special, unique, extraordinary and intellectual in character—none of which is commonly known or readily accessible to the public and any of which place or placed you in
          a position of confidence and trust with the customers, potential customers, vendors, employees of the Company and other persons, the loss of which cannot adequately be compensated by damages in an action at law.

       

      You acknowledge and agree that the Company desires to enter into this Agreement to, in part, protect the Company's vital
        interest in maintaining its Confidential Information, protect the Company's investment in your training and development, protect the Company's business and good will, and avoid Competition (as defined below) with you or any other person or entity
        with which you are employed or affiliated for a time certain following your Separation. For purposes of this Agreement, "Competition”- means engaging in,
        aiding, assisting, owning, or controlling (whether as a shareholder, principal, partner, employee, trustee, officer, director agent, independent contractor, or otherwise) any interest greater than two percent (2%) in any firm, corporation,
        business, or other entity which is (or with any other person(s) who are) engaged in competition with the Company in any line of business which, at the time of your Separation (or within three months following your Separation), comprised fifteen
        percent (15%) or more of the Company's gross sales revenues.

       

      For purposes of this Agreement, the "Restricted Area"
        shall be the entire United States of America.

       

      You agree that, during the Restricted Period, you will not, directly or indirectly, alone or with others, engage in Competition
        with the Company, its successors or assigns or any purchaser of all or substantially all of Company's assets within your Restricted Area.

       

      You acknowledge having carefully read and considered the non-competition provisions of this Agreement and, having done so,
        agree that the covenants and restrictions contained herein are, taken as a whole, fair and reasonable in their duration, geographic scope and scope of restricted activities, do not unduly restrict your ability to obtain or maintain a livelihood and
        are necessary to protect the Company's good will, trade secrets, Confidential Information and business interests. You expressly agree not to raise any issue disputing the reasonableness of the: (i) geographic scope. (ii) type of employment or line
        of business or (iii) duration of any such covenants in any proceeding to enforce such covenants and restrictions.

       

      9.  No Solicitation, No Interference and No Hire Covenants: You agree that, during the Restricted Period, you will not, directly or indirectly: (i) solicit or encourage any employee or other service
          provider of the Company or its subsidiaries to leave such employment or service; (ii) interfere with the relationship between the Company and any of its employees or service providers; or (iii) hire any person who, within the six (6) month period
          preceding such hiring, was employed by, or providing services to the Company or its subsidiaries.

       

      10. Mutual Nondisparagement: You agree that following the termination of your employment for any reason, you shall not publicly make any negative, disparaging, detrimental or derogatory remarks or
          statements (written, oral, telephonic, electronic, or by any other method) about the Company or its subsidiaries or any of their respective owners, partners, managers, directors, officers, employees or agents, including, without limitation, any
          remarks or statements that could be reasonably expected to adversely affect in a material manner (i) the conduct of the Company's or its subsidiaries' businesses or (ii) the business reputation or relationships of the Company or its subsidiaries
          and/or any of their past or present officers, directors, agents, employees, attorneys, successors and assigns, in each case, except to the extent required by law or legal process. Similarly, following termination of your employment for any
          reason, neither the Company's officers in their official capacity, nor the members of the Board, shall make any such statements about you.

       

        

      
        8

        
          

        

      

      Nothing in this paragraph 10, or in the remainder of this Agreement, shall prohibit you from filing a charge with a government agency, including
        the U.S. Equal Employment Opportunity Commission or any similar state or local fair employment practices agency, or from talking to or cooperating in any investigation by with the U.S. Equal Employment Opportunity Commission, any similar state or
        local fair employment practices agency, or the Securities and Exchange Commission, and no notice to the Company is required under these circumstances.

       

      11. Intellectual Property: You agree that all patentable inventions, discoveries, and trade secrets, whether or not patented, and whether or not reduced to practice, and all copyright interests that
          are or have been conceived or developed during your employment with the Company, either alone or jointly with others, if on the Company's time, using the Company's facilities, specifically relating to the Company, or to the Company's business are
          done as "works made for hire" for the Company, and you hereby assign to the Company all right, title, and interest in all such intellectual property. You agree that the Company shall be the sole owner of all domestic and foreign patents,
          trademarks, trade names, service marks, domain names and other rights pertaining thereto related to such intellectual property, and further agree to execute all documents consistent therewith that the Company reasonably determines to be necessary
          or convenient for use in applying for, prosecuting. perfecting, or enforcing patents or other intellectual property rights, including the execution of any assignments, patent applications, or other documents that the Company may reasonably
          request. Upon your failure to do so within 10 business days following the Company's written request, you hereby irrevocably appoint the Company as your true and lawful attorney-in-fact with full power of delegation and substitution to execute,
          deliver, file and record, and on your behalf and in the Company's name, such documents consistent with this Agreement. This provision is intended to apply only to the extent permitted by applicable law.

       

      12. Arbitration: Any dispute, claim or controversy arising out of or relating to this Agreement. including without limitation any dispute, claim or controversy concerning validity, enforceability,
          breach or termination hereof), shall be finally settled through arbitration under the rules of the American Arbitration Association for arbitration of employment disputes, such arbitration to be conducted in Jefferson County, Kentucky. Each party
          will be entitled to present evidence and argument to the arbitrator(s). The arbitrator(s) will have the right only to interpret and apply the provisions of this Agreement and may not change any of its provisions, except as expressly provided
          herein. The arbitrator(s) will permit reasonable pre-hearing discovery of facts, to the extent necessary to establish a claim or a defense to a claim, subject to supervision by the arbitrator(s). In addition, the Company shall propose a
          reasonable set of rules to guide any such arbitration proceedings. Such rules shall be designed to lead to a prompt and just result without undue delay or expense but will not be unduly prejudicial to either party. The determination of the
          arbitrator(s) will be conclusive and binding upon the parties and judgment upon the same may be entered in any court having jurisdiction thereof. The arbitrator(s) will give written notice to the parties stating the arbitrator's determination,
          and will furnish to each party a signed copy of such determination. The expenses of arbitration will be borne by the Company, unless the arbitrator(s) determine that you have materially failed to succeed in any claim, in which case the
          arbitrator(s) may equitably determine, consistent with the application of state or federal law, to apportion some of the fees and expenses to you, not to exceed the maximum permitted by law. Each party shall bear its own costs and expenses of
          counsel, unless the arbitrator(s) determine that the Company has material liability to you hereunder, in which event the arbitrator(s) may equitably determine that your reasonable counsel fees shall be paid by the Company. Any arbitration
          hereunder shall be governed by and construed in accordance with the substantive laws of the Commonwealth of Kentucky and, where applicable, federal law, without giving effect to the conflict of laws principles of such State.

       

      13. Section 409A of the Code: To the extent that Section 409A of the Code is applicable to any provisions of this Agreement, it is the intent of the parties that such provisions comply with Section
          409A of the Code and related regulations, and this Agreement shall be so construed.

       

      Any reimbursements by the Company to you of any eligible expenses under this Agreement that are not excludable from your income for Federal income
        tax purposes (the "Taxable Reimbursements") shall be made by no later than the earlier of the date on which they would be paid under the Company's normal policies and the
        last day of the calendar year following the year in which the expense was incurred. The amount of any Taxable Reimbursements, and the value of any in-kind benefits to be provided to you, during any calendar year shall not affect the expenses
        eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year (except for any life-term or other aggregate limitation applicable to medical expenses). The right to Taxable Reimbursement, or in-kind benefits, shall not
        be subject to liquidation or exchange for another benefit.

       

      

      
        9

        
          

        

      

      14. Choice of Law: This Agreement shall in all respects be interpreted, enforced and governed by the laws of the Commonwealth of Kentucky, without giving effect to conflict of laws principles of such
          State. The language of all parts of this Agreement shall in all cases be interpreted as a whole, according to its fair meaning, and not strictly for or against any of the parties.

       

      15. Choice of Forum: Subject to paragraph 12 above, you consent to the exclusive jurisdiction of courts located in the Commonwealth of Kentucky.

       

      16. Equitable Remedies: Notwithstanding any other provisions of this Agreement to the contrary, the Company will not be required to seek or participate in arbitration regarding any actual or threatened
          breach by you of the Non-Disclosure, Non-Competition, No Solicitation, No Interference and No Hire covenants contained in this Agreement or any other covenant under this Agreement for which equitable relief may be sought. You agree that the
          Company will suffer irreparable harm for any such breach or threatened breach and that the Company may not be adequately compensated by damages, and that, in addition to all other remedies, the Company shall be entitled to injunctive relief and
          specific performance and to pursue such remedies in a court of competent jurisdiction in the Commonwealth of Kentucky and no arbitrator may make any ruling inconsistent with the findings or rulings of such court. You agree to waive any argument
          of lack of personal jurisdiction or forum non-convenience with respect to the pursuit of such injunctive relief and specific performance arising out of or relating to this Agreement.

      

      

      17. Remedies Cumulative: You agree that nothing herein stated shall be construed as prohibiting the Company from pursuing any and all other remedies that may be available to the Company at law, in
          equity, by contract or otherwise in connection with such violation or threatened violation, including without limitation the recovery of monetary damages from you, all of which shall be cumulative to the fullest extent permissible under
          applicable laws.

       

      18. Insurance and Corporate Document Protections: Nothing in this Agreement shall be deemed to preclude you from receiving any of the benefits or protections, including without limitation
          representation, available to you following any Separation under (a) any officers and directors insurance policy maintained by the Company which provides coverage during your employment by the Company as an officer or director of the Company or
          (b) the Company's bylaws, Certificate of Incorporation or under applicable law. Any such benefits and protections shall or shall not be provided solely in accordance with the terms and conditions of any such policies, documents and applicable
          law. The Company covenants to maintain, even after your Separation, its officers and directors insurance policy as in effect as of your Separation from the Company or another officers and directors policy that provides equivalent or greater
          benefits and protections to you.

       

      19. Entire Agreement: Other than agreements concerning equity incentive programs and the Code of Conduct and Ethics, this Agreement constitutes and sets forth the entire agreement between you and the
          Company with respect to the subject matter contained herein and supersedes any and all prior and contemporaneous oral or written agreements or understandings between the parties, including, without limitation, the Prior Agreement. You acknowledge
          and agree that no representation, promise, inducement or statement of intention has been made by the Company that is not expressly set forth in this Agreement. No party hereto shall be bound by, or liable for, any alleged representation, promise,
          inducement or statement of intention not expressly set forth in this Agreement. This Agreement cannot be amended, modified or supplemented in any respect, except by a subsequent written agreement signed by all parties hereto.

       

        

      
        10

        
          

        

      

      20. Binding Effect: This Agreement shall be binding upon and inure to the benefit of you and your heirs and the Company and its legal representatives. parent, successors and assigns.

       

      21. No Waiver: No action or inaction by either party shall be taken as a waiver of its right to insist that the other party abide by the obligations under this Agreement. unless such waiver is in
          writing, expressly waives such rights and is signed by legal counsel for the party making such waiver.

       

      22. Severability: The parties hereby agree that (a) the provisions of this Agreement will be severable in the event that for any reason whatsoever any of the provisions hereof are invalid, void or
          otherwise unenforceable. (b) any such invalid, void or otherwise unenforceable provisions will be replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and
          enforceable, and (c) the remaining provisions will remain valid and enforceable to the fullest extent permitted by applicable law.

       

      23. Survival: Any provision contained in this Agreement. which by its nature or terms survives the Term or the Restricted Period (including but not limited to of the Non-Disclosure, Non-Competition, No
          Solicitation, No Interference and No Hire covenants), shall survive the Term and the Restricted Period and continue to be binding.

       

      I trust that this adequately outlines the Company's offer and our discussions. if,
        however, you have any questions or concerns, please do not hesitate to call me.

      

      

      
        11

        
          

        

      

      We are pleased to offer you this position and look forward to a long and mutually rewarding employment relationship.

       

      Sincerely,

       

      	
              /s/ Larry Wexler

            	 
	
              Larry Wexler

            	 

       

      I agree to the terms and conditions of the employment offer set forth above. 

       

      	
              /s/ Luis Reformina

            	 	
              3/23/2021

            	 
	
              Your Signature

            	 	
              Date

            	 

       

      

      
        12

        
          

        

      

      EXHIBIT A

      

      

      FORM OF

      

      

      RELEASE AND SEVERANCE AGREMENT

       

      This Release and Severance Agreement (this "Release")
        is entered into by and between 1                    1 ("Employee") and Turning Point Brands, Inc. ("Turning Point" and, collectively with its parent(s), subsidiary(ies). and all other related companies, the "Company"). Employee and Turning
        Point are referred to herein as the "Parties." 

       

      RECITALS

       

      	A.	
              Employee and Turning Point are parties to an Employment Letter, dated as of [                ,2021] (the "Employment Agreement"), which provides for severance after termination in certain circumstances, conditioned upon Employee first signing a general release of claims following termination of
                Employee's employment, which release becomes irrevocable in accordance with its terms.

            

       

      	B.	
              This Release is the contemplated release of claims under the Employment Agreement, and Employee has had notice of this Release since the Employment Agreement was
                executed, it being annexed thereto (the "Presentation Date").

            

       

      	C.	
              Employee's employment with the Company [ended] [will end] on I                    1 (the "Separation Date").

            

       

      	D.	
              The Parties desire to settle any and all other claims, if any, that Employee may have against the Company or any of its current or former employees that are
                releasable by law.

            

       

      AGREEMENT

       

      NOW, THEREFORE, in consideration for
        the covenants and mutual promises contained in the Employment Agreement, the Parties agree as follows:

       

      PART I

       

      For and in consideration of the promises made herein by Employee in Part II and Part III of this Release, and his performance
        thereof, the sufficiency of which, either separately or combined, is hereby acknowledged, Turning Point agrees as follows:

       

      1.1          Severance Benefits to Employee. In exchange for Employee signing this Release, complying with its terms,
          and not revoking this Release, the Company will pay to Employee the "Severance Benefits" (as defined in the Employment Agreement), as and when therein required, if, and
          only if, Employee signs this Release and returns it to the Company: and (2) the seven (7) day revocation period in Part II, Section 2.4 below has expired on or before the 55th day
              after Separation Date, provided that Employee has not exercised his right to revoke this Release in accordance with Part II, Section 2.4 below.

       

      1.2          Separate and Adequate Age Claim Consideration. The Parties expressly agree and acknowledge that a portion of the Severance Benefits in
          Section I .1 above represents separate and adequate consideration, to which Employee is not otherwise entitled, in exchange for Employee's Age Claim Waiver, set out below in Part II. Turning Point's present promise to provide this consideration
          is exchanged for Employee's present release of any Age Claims at the time of the execution of this Release.

       

      PART II

       

      For and in consideration of the promises made herein by Turning Point in Part I of this Release, and its performance thereof,
        the sufficiency of which is hereby acknowledged, Employee agrees as follows:

       

      

      
        13

        
          

        

      

      2.1       General Release and Waiver of All Claims and Potential Claims. Employee hereby releases all claims and potential claims, known and unknown, against the Company that
          are releasable by law. More specifically, for and on behalf of himself and his family, dependents, heirs, executors, administrators and assigns, Employee hereby irrevocably and unconditionally releases the Company and its respective predecessors,
          successors, and all their past, present or future assigns, parents, subsidiaries, affiliates, insurers, attorneys, divisions, subdivisions and affiliated entities, together with their respective current and former officers, directors,
          shareholders, fiduciaries, administrators, trustees, agents, servants, employees, attorneys, insurers and/or representatives, and their respective predecessors, successors and assigns, heirs, executors, administrators, and any and all other
          affiliated persons, firms, plans or corporations which may have an interest by or through them (collectively "Releasees“), both jointly and individually, from any and
          all claims, actions, arbitrations, and lawsuits, of any nature whatsoever, known or unknown to Employee, accrued or unaccrued, which he ever had, now has or may have had against Releasees since the beginning of time through the date of execution
          of this Release. This general release and waiver of claims includes, but is not limited to, any and all claims, demands, causes of action, suits, debts, complaints, liabilities, obligations, promises, agreements, controversies, damages and
          expenses that are releasable by law (including, without limitation, attorneys fees and costs actually incurred or to be incurred) of any nature or description whatsoever, in law or equity, whether known or unknown, in connection with or arising
          out of his employment with the Company and/or termination of said employment. Claims being released include, without limitation, any and all employment-related claims that are releasable by law arising under federal, state or local statutes,
          ordinances, resolutions, regulations or constitutional provisions prohibiting discrimination in employment on the basis of sex, race, religion, national origin, age, disability and/or veterans' status, including, but not limited to, claims
          arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981, 1981a, 1983 and 1985, the Civil Rights Act of the State in which Employee resides and works. the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, el seq., the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Pregnancy Discrimination Act, the Federal Rehabilitation Act of 1973, Executive Order
          11246, the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 el seq., the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq., the Family and Medical Leave Act, 29 U.S.C. §§ 2601, et seq., the
          Genetic Information Non-Discrimination Act, 42 U.S.C. §§ 2000ff el seq, the minimum wage act, wage payment law and wage discrimination statutes and
          workers compensation statures and similar state laws of the state in which Employee has provided services, in all instances as amended. This general release and waiver of claims also includes, but is not limited to, any and all claims for unpaid
          benefits or entitlements asserted under any plan. policy, benefits offering or program (except as otherwise required by law), any and all contract or tort claims, including, without limitation, claims of wrongful discharge, assault. battery,
          intentional infliction of emotional distress, negligence, and/or defamation against Releasees.

       

      Nothing in this Section 2.1, Section 2.2, or any other provision in the remainder of this Release shall be construed to prevent
        Employee from making a claim for indemnity under law or governance documents providing for indemnity or insurance against claims for acts or omissions in his capacity acting as an officer or director of the Company. Furthermore, nothing in this
        Section 2.1, Section 2.2, or any other provision in the remainder of this Release shall be construed to prohibit Employee from talking to, cooperating in any investigation by, and/or filing a charge with, the U.S. Equal Employment Opportunity
        Commission (the "EEOC"), any other similar state or local fair employment practices administrative agency, or the Securities and Exchange Commission (the "SEC"). However, by signing this Release, Employee hereby waives the right to recover from
        Releasees any relief from any charge or claim pursued or otherwise prosecuted by him, or by persons or entities like the EEOC acting by or through him, including, without limitation, the right to attorneys' fees, costs, and any other relief,
        whether legal or equitable, sought in such charge, claim, or other proceeding.

       

      2.2          Age Claim Waiver. Employee further agrees that his full general release includes a waiver of his rights, if any, to assert or allege
          discrimination based upon age pursuant to the Age Discrimination in Employment Act or any and all other federal, state or local laws or regulations prohibiting discrimination on the basis of age (collectively, "Age Claim Waiver").

       

      2.3           Adequate Consideration Period/Consult an Attorney. Employee acknowledges that he is hereby instructed that he may and should consult an
          attorney of his own choosing regarding the terms of this Release, and specifically including the Age Claim Waiver, and that he has been given at least [twenty-one
            (21)] [forty-five (45)] days to consider the terms of this Release and whether to sign this Release, although Employee may choose to sign this Release prior to the expiration of this [twenty-one (21)] [forty-five (45)] day period. The Parties agree that if Employee fails to execute this Release prior to the expiration of the [twenty-one (21)] [forty-five (45)] day period or prior to the deadline set forth in Section 1.1 hereof, this Release will be null and void.

       

        

      
        14

        
          

        

      

      2.4           Seven (7) Day Revocation Period. Employee further agrees that he is hereby instructed by the Company that, following his signing of this
          Release, Employee shall have up to seven (7) days to withdraw, rescind or revoke this Release by providing written notice to [          ], but that, in the event
            Employee exercises his right to withdraw or rescind this Release, all terms of this Release, including, without limitation, Turning Point’s duty to provide the Severance Benefits provided in Part I, Section 1.1, above, shall be void and of no
            effect.

       

      2.5         Permanent Waiver of Re-employment. In order to effect the degree of separation contemplated by the Parties, Employee
          acknowledges his present intent to permanently remove himself from the labor pool of Releasees as of the Separation Date and forever thereafter. In order to accomplish this present permanent removal from Releasees' labor pool, Employee agrees
          that he will not seek and will not accept hiring, rehiring, placement, or reinstatement with Releasees, either as an employee, an independent contractor, a temporary worker, or in any other capacity.

       

      PART III

      Other Agreements

       

      3.1           Additional Covenants by Employee. Employee represents, warrants and covenants that, as of the date he signs this Release, (1) he is unaware of any wages (as
          that term is defined by applicable state law) that are owed to him by the Company and that have not been paid; (2) he is unaware of any request for leave under the Family and Medical Leave Act that was denied; (3) he has no known work-related
          injury, disability, or illness, and has not requested any accommodation under the Americans With Disabilities Act or similar state law that has not been satisfied; and (4) he is unaware of any document, circumstance, occurrence, or any conduct on
          behalf of the Company or any of its agents. employees, officers or directors, or any Releasee, which evidence, contain, or constitute a violation of any law, standard, or regulation, including but not limited to federal or state securities laws,
          upon which representations the Company expressly relies in entering into this Release.

       

      3.2           Knowing and Voluntary Agreement. Employee agrees and acknowledges that he has been advised to consult an attorney regarding the terms of this Release and that
          he has carefully reviewed, studied and thought over the terms of this Release. Employee further acknowledges and agrees that he knowingly and voluntarily entered into and signed this Release after deliberate consideration and review of all of its
          terms and provisions, that he was not coerced, pressured or forced in any way by the Company, any Releasee or anyone else to accept the terms of this Release, and that the decision to accept the terms of this Release was entirely his own.

       

      3.3          No Wrongdoing By the Parties. The Parties further agree that they have entered this Release to resolve any and all claims, if any, Employee may have against
          the Company or any other Releasee, and that this Release does not constitute an admission of, or is to be used as evidence of, any liability, violation or wrongdoing of any kind.

       

      3.4          Choice of Law; Interpretation; Captions. The Parties understand and agree that this Release shall in all respects be interpreted, enforced and governed under
          the laws of the Commonwealth of Kentucky and the language of this Release shall in all cases be interpreted as a whole, according to its fair meaning and not strictly for or against either of the Parties, regardless of which is the drafter of
          this Release. Captions and headings used herein are for convenience of reference only.

       

      3.5           Exclusive Jurisdiction; Venue. The Parties understand and agree that the federal and/or state courts located in the Commonwealth of Kentucky shall have
          exclusive jurisdiction with regard to any litigation relating to this Release and that venue shall be proper only in the Commonwealth of Kentucky and any federal court whose judicial district encompasses the Commonwealth of Kentucky, and that any
          objection to this jurisdiction or venue is specifically waived.

       

      3.6           Entire Agreement. The Parties agree that this Release sets forth the entire agreement between the Parties on the subject matter herein and fully supersedes any
          and all other prior agreements or understandings between them, except for the terms in the Employment agreement referred to herein and any agreements between
            Employee and the Company regarding non-disclosure of confidential information, intellectual property, non-solicitation of customers, employees or contractors, non-competition, and/or other restrictive covenant obligations, which
          agreements, if any, shall remain in full force and effect according to their terms. This includes, without limitation, Employee's continuing obligations under Sections 7-11 of the Employment Agreement. This Release may be amended or superseded
          only by a subsequent writing, executed by the Party against whom enforcement is sought.

       

        

      
        15

        
          

        

      

      3.7           Agreement to Indemnify. The Parties agree that should Employee seek to overturn. set aside, or legally challenge any release of claims, promise or covenant
          made by him under this Release, by judicial action or otherwise. the Company and/or Releasees shall be entitled to recover from Employee its costs of defending and enforcing the terms of this Release and/or any other claim brought by or against
          the Company or Releasees, including, without limitation, reasonable attorneys' fees. The Parties acknowledge and agree that each Releasee is an intended third-party beneficiary of this Release and may enforce the terms of this Release
          accordingly.

       

        

      
        [signature page follows]

         

        

         

      
        16

        
          

        

      

      

      I, [_____________________], UNDERSTAND AND AGREE THAT THIS RELEASE CONSTITUTES A FULL AND FINAL RELEASE OF ALL CLAIMS THAT ARE RELEASEABLE BY LAW.

       

      

      

      	 	 
	 	
              [Insert Name]

            
	 	
              Date:

            	 

      

      

      	
              STATE OF

            	 	 
	 	 	
              ) SS:

            
	
              COUNTY OF

            	 	 

       

      Subscribed and sworn to before me by_______________________________this _________day of           ,
          202_.

      

      

      	 	 
	 	
              Notary Public:

            
	 	 
	 	
              My Commission expires:

            	 
	 	 
	 	
              -- and --

            
	 	 
	 	
              TURNING POINT BRANDS, INC.

            
	 	 

      	 	
              By:

            	 
	 	
              Title:

            	 
	 	
              Date:

            	 

      

      

      	
              STATE OF

            	 	 
	 	

            	
              ) SS:

            
	
              COUNTY OF

            	 	 

      

      

      Subscribed and sworn to before me by________________on behalf of Turning Point Brands, Inc., this_________day of ________, 20_.

       

      	 	
              Notary Public:

            	 

      	 	
              My Commission expires:

            	 

       

    

     

    

    17ex_236281.htm

 

Exhibit 10.8

 

 

CHANGE IN CONTROL AGREEMENT

 

THIS CHANGE IN CONTROL AGREEMENT (the “Agreement”) is entered by and between Parkway Acquisition Corp., a Virginia corporation (“Parkway”), and Beth R. Worrell (“Employee”).

 

W I T N E S S E T H :

 

WHEREAS, Employee is employed in the senior management position of Chief Risk Officer for Parkway and/or its wholly owned subsidiary, the Skyline National Bank (“Bank”). For purposes of this Agreement, Parkway, the Bank, along with any future Successor (defined below), as a result of a future Change in Control Event shall be referred to herein as the “Employer”.

 

WHEREAS, Parkway desires for the Employee to be eligible for severance benefits in the event that a Change of Control Event occurs during the term set forth in Sections 4(A) and 10 of this Agreement, and desires to secure reasonable protections for its legitimate business interests through certain loyalty obligations.

 

WHEREAS, the Employee desires to continue employment with Parkway and the Bank and to obtain the benefits provided by this Agreement, and Employee finds the loyalty obligations requested to be reasonable, and understands that these obligations will continue even if the severance benefits are not paid or become payable under Section 4.

 

WHEREAS, a prior Change in Control Agreement was entered into between the parties on November 22, 2017, but the Employee’s right to receive severance benefits under the earlier agreement terminated.

 

WHEREAS, the Board of Directors of Parkway has authorized and approved the need for and appropriateness of making this new Agreement with the Employee.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, and for other good and valuable considerations, the receipt and sufficiency of which hereby are acknowledged, Parkway and Employee hereby agree as follows:

 

1.            Effective Date of Agreement. This Agreement is effective as of June 1, 2019 (the “Effective Date”) and shall remain in effect until terminated as provided herein.

 

2.            Employment. Employee’s employment with Employer has been and will remain an “at will” relationship. This Agreement does not in any way alter the “at will” nature of the relationship, nor does it constitute an agreement by Employer to employ Employee for any particular period of time or in any particular capacity. Nothing in this Agreement is intended or should be interpreted to confer upon Employee the right to continued employment by Employer or to interfere with or restrict in any way the right of Employer to discharge Employee or terminate Employee’s employment at any time or for any reason whatsoever, with or without Cause (defined below), and without any obligation or liability to Employee, except as herein provided, it being the intent of the parties to provide for payment of the severance benefits specified herein only in the event of the termination of Employee’s employment under the circumstances described in Section 3.

 

 

 

 

 

3.            Definitions. For purposes of this Agreement:

 

	 	
			(A)        Cause. “Cause” means the termination of Employee’s employment by the Employer as a result of a finding by a majority vote of the Board (excluding Employee if she is a Board member) that any of the following have occurred: (i) Employee has engaged in or has directed others to engage in an act or omission, or series of actions, deemed to be fraudulent, dishonest or unlawful; (ii) any knowing and material breach of this Agreement by Employee; (iii) any knowing and material violation by Employee of corporate policies and procedures that result in damage to the business or reputation of the Employer, including, without limitation, the Bank’s Professional Code of Conduct, Code of Ethics and Conflict of Interest Policy and policies prohibiting discrimination, harassment and/or retaliation; (iv) Employee has engaged in, or has directed others to engage in, a criminal act (other than a minor traffic offense) or other willful misconduct determined to be substantially detrimental to the best interests of the Employer; (v) knowing breach of fiduciary duty by Employee; (vi) Employee fails to follow the directions of the CEO or Board, is grossly neglectful of Employee’s duties or continues to fail to perform assigned duties, which are not cured within twenty-one (21) days after the CEO or Board provides written notice of the issue; (vii) Employee engages in conduct which violates any material law, rule or standard of regulatory agencies governing the Employer, including but not limited to the Virginia Bureau of Financial Institutions, the Office of the Comptroller of the Currency, the U.S. Financial Stability Oversight Council, U.S. Treasury Department, Bureau of Consumer Financial Protection, and the Securities and Exchange Commission; or (viii) demonstrated incompetence of Employee.

			

 

	 	
			(B)          A “Change of Control Event” shall have occurred at such time as:

			

 

(i)        any person or entity, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, a wholly-owned subsidiary thereof, or any employee benefit plan of the Parkway or any of its subsidiaries becomes the beneficial owner of Parkway securities having fifty percent (50%) or more of the combined voting power of the then outstanding securities of Parkway that may be cast for the election of directors of Parkway (other than as a result of the issuance of securities initiated by Parkway in the ordinary course of business); or

 

 

(ii)        as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the holders of all Parkway’s securities entitled to vote generally in the election of directors of the Parkway immediately prior to such transaction constitute, following such transaction, less than a majority of the combined voting power of the then-outstanding securities of the Parkway or any of their respective successor corporations or entities entitled to vote generally in the election of the directors of Parkway or such other corporation or entity after such transactions; or

 

 

(iii)       such other change of ownership or control event as defined in Treasury Regulation §1.409A-3(i)(5) or any subsequent, applicable Treasury Regulation.

 

2

 

 

	 	
			(C)        Competing Financial Services Organization. “Competing Financial Services Organization” means an entity unaffiliated with the Employer that is engaged in the commercial, retail or mortgage banking or lending business, wealth management business, investment advisory business, or trust service business that provides services and products that are the same as or competitive with the services that products offered by the Employer immediately prior to the Termination Date or were approved by the Employer to be offered within ninety (90) days of the Termination Date.

			

 

	 	
			(D)        Competitive Service or Product. “Competitive Service or Product” means those services or products offered by a Competing Financial Services Organization that are the same as or competitive with those services or products offered by the Employer at the Termination Date or which have been approved by the Employer to be offered within ninety (90) days of the Termination Date.

			

 

	 	
			(E)        Confidential Information. “Confidential Information” means all non-public information, technical or financial data, materials, computer records or data, trade secrets and/or know-how regarding Employer or its internal operations, policies that is treated as confidential, that is not generally known by persons who are not employed by the Employer or are not a member of the Boards of Directors of Parkway, the Bank, or the Successor and that is not otherwise available to the public by lawful and proper means. Confidential Information also includes all information regarding shareholders of Parkway, or a Successor, all information received from customers of the Bank, and any affiliates, or Successors as well as the nature of the products and the terms of the services provided to those customers. All such non-public information is considered Confidential Information regardless of the manner which such information is conveyed or stored (orally, written, electronically or digitally) as well as information or materials designated or treated as confidential by a federal or state regulatory or enforcement agency Confidential Information includes, but is not limited to, strategic plans and forecasts; product or service plans or research; customer records and lists; marketing research, plans and/or forecasts; compilations and databases of customers, business or marketing information that are developed by or for the Employer; budget and/or financial information; customer contact, account and mailing information; pricing, costs or profitability analysis; sales and marketing techniques and programs; incentive compensation plans; account information (including loan terms, expiration or renewal dates, fee schedules and commissions); software, access codes, passwords, databases and source codes; inventions; processes, formulas, designs, drawings or engineering information; hardware configuration, and all other financial or other business information or systems of the Employer, as well as the following non-public and sensitive information regarding the employees of the Employer: Social Security numbers, date of birth, names of family members, home addresses and email addresses, telephone numbers, health-related information and compensation information. This definition applies to information generated by Employee or others who work for the Employer, as well as information received from a customer or another third party. The above list is not exhaustive, and Confidential Information also includes other information that is identified, marked or treated as confidential or proprietary, or that would appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used. For purposes of this definition, the term “not available to the public” shall include all information or material in the public domain by virtue of improper disclosure by Employee or by another with her permission. Notwithstanding the foregoing, information shall not be considered Confidential Information if (i) such information is already known to others not bound by a duty of confidentiality with respect thereto, (ii) such information is or becomes publicly available through no fault of Employee, or (iii) the furnishing or use of such information is compelled by or in connection with legal or administrative proceedings.

			

 

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			(F)        Customer. “Customer” means a Person or Entity that has an account with, loan from, an investment or deposit with the Employer, or that has received or used other financial or investment products or services from the Employer at any time within the twelve (12) months immediately prior to the Termination Date.

			

 

	 	
			(G)        Determination of Long Term Incapacity. “Determination of Long Term Incapacity” shall mean a good faith determination by Employer that, as a result of mental or physical illness or injury Employee has failed to perform Employee’s assigned duties with Employer on a full time basis for a period exceeding six (6) consecutive months.

			

 

	 	
			(H)        Employer. “Employer” means any or all of the following: Parkway Acquisition Corp., it’s subsidiary Skyline National Bank and all of Parkway or the Bank’s other existing or future affiliates or subsidiaries, as well as any Successor (see Section 3(L) below.

			

 

	 	
			(I)         Good Reason. “Good Reason,” subject to compliance with the provisions of Section 4(F), shall mean the existence of one or more of the following conditions, in the good faith judgment of Employee, which arises in connection with or within twelve (12) months after the effective time of a Change in Control Event absent the express consent of Employee:

			

 

(i)         a reduction in Employee’s base compensation below the sum of 90% of the Employee’s Base Salary as of the date of this Agreement;

 

(ii)        a material reduction in the Employee’s position such that the Employee is no longer considered an officer-level employee of either a bank or bank holding company; or

 

(iii)       a change in the geographic location at which Employee must perform services over 120 miles from the location at which Employee was serving immediately prior to the Change in Control Event.

 

	 	
			To avoid any confusion under this Section 3(I)(ii), the Employee, who currently holds a senior executive position with either or both Parkway and the Bank has no right to insist on the same position at the same level with the Employer after a Change in Control Event. Employee will have no right to claim a Good Cause termination under Section 3(I)(ii), if Employee is retained after the Change in Control Event but is demoted and given a lower-level officer position (e.g., CFO to Controller, or CLO to Regional Market Manager) so long as the base salary for the new position remains at or above the guaranteed amount in Section 3(I)(i). If however, in connection with the change in position and status, the Employer also imposes either a reduction in the Employee’s guaranteed base salary or requires a material geographic relocation, then Good Cause may be declared to exist under Sections 14(I)(i) and/or (iii).

			

 

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			(J)         Other than Good Reason. “Other than Good Reason” shall mean any voluntary termination by Employee which is not for Good Reason.

			

 

	 	
			(K)        Person/Entity. “Person” shall mean any Entity or individual, and the heirs, executors, administrators, legal representatives, successors, and assigns of such “Person” where the context so permits. The term “Entity” shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative or association or any foreign trust or foreign business organization.

			

 

	 	
			(L)        Successor. “Successor” shall mean any person or entity (corporate or otherwise) into which, after a Change in Control Event, Parkway, the Bank and/or their subsidiaries and affiliates (or their successors or assigns) shall be merged or consolidated or to which all or substantially all of the assets (including, but not limited to, a sale of substantially all of Parkway, the Bank or the Bank's loan assets) shall be transferred in any manner as provided in Section 3(B) or which by agreement assumes the Employer’s obligations under this Agreement, or which in connection with and after a Change in Control Event becomes (by agreement, operation of law or otherwise) the employer of Employee.

			

 

	 	
			(M)       Retirement. “Retirement” shall mean Employee’s retirement from employment with the Employer on or after reaching age 65.

			

 

	 	
			(N)        Termination Date. “Termination Date” means the effective date as of which Employee’s employment with Employer is terminated or is deemed terminated.

			

 

4.            Severance Benefits in Certain Events. If at the effective time of a “Change in Control Event” (as defined above) or any time within twelve (12) months immediately following a Change in Control Event, (i) the Employer terminates Employee’s employment without “Cause” (as defined above) or, (ii) the Employee terminates employment for “Good Reason” (as defined below), then in the event of either (i) or (ii), and subject to each of the following: (x) the limitations set forth herein and in Section 9 below, (y) compliance with the various loyalty obligations set forth in Sections 11 to 14, and (z) the Employee’s execution of a comprehensive Waiver and Release prepared by Employer that waives and releases all claims relating to or arising from Employee’s employment and the termination of that employment, the Employer shall pay or cause to be paid the following severance benefits: (a) an amount equal to two times the Employee’s annualized base salary using the greater of (i) Employee’s annualized base salary for the calendar year preceding the year in which the Termination Date occurs of (ii) the annualized base salary for the calendar year in which the Termination Date occurs, and (b) if the Employee elects COBRA continuation coverage under the Employer’s health plan, then the Employer will pay on the Employee’s behalf the premiums required for employee-only COBRA coverage for up to a maximum of eighteen (18) months.

 

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			(A)       Employee shall not be entitled to any severance benefits under this Agreement if no Change in Control Event occurs on or before May 31, 2020, as the Employer’s obligation to pay severance under this Agreement terminates no later than May 31, 2020 as specified in Section 10 below, unless the Employer extends the term by an amendment to this Agreement. Moreover, to avoid any confusion, Employee will not be entitled to any severance benefits under this Agreement, even if the Employer terminates the Employee without Cause (subject only to the protection provided by Section 4(C) below) or the Employee terminates employment for Good Reason during the term of this Agreement if no Change of Control Event has occurred at the time of termination of employment.

			

 

	 	
			(B)        If at any time, even if a covered Change in Control Event occurs during the term of this Agreement, (i) the Employer terminates Employee’s employment for “Cause,” (ii) Employee voluntarily terminates Employee’s employment with Employer for Other than Good Reason, or (iii) Employee’s employment terminates or is terminated due to Employee’s death, Retirement or pursuant to a Determination of Long Term Incapacity, then in any of these situations, the Employee shall have no right to severance benefits under this Agreement.

			

 

	 	
			(C)        If however, Employee’s employment is terminated by Employer without Cause prior to the effective time of a Change in Control Event, but following the date on which Parkway’s Board of Directors has taken action to approve an agreement, including any definitive agreement or an agreement in principle, relating to a Change in Control Event and that event occurs within six (6) months of the Employee’s termination from employment with Employer, then for purposes of this Agreement, Employee shall be deemed to be employed by the Employer as of the effective date of that Change of Control Event (should it occur), and such termination of employment shall be deemed to occur at the effective time of the Change in Control Event, and in this event, the Employee will be entitled to severance benefits under Section 4 of this Agreement.

			

 

	 	
			(D)        The base salary amount payable under this Section 4 shall be payable over twenty-four (24) months in equal installments that coincide with the Employer’s regular paydays and the COBRA premium payments shall each be paid beginning on the first regular pay period of Employer after the Waiver and Release becomes binding. These payments are subject to all applicable tax withholdings, and the Employee’s compliance with the loyalty obligations set forth in Section 11 below.

			

 

	 	
			(E)        Further, in order for the Employee to exercise the right to terminate for Good Reason, and to be eligible for severance benefits under this Agreement, Employee must first give the Employer written notice of the condition believe to constitute Good Reason and must provide the Employer at least thirty (30) days to remedy such condition, and if the Employer fails to remedy the condition, the Termination Date shall be on the thirty-first (31st) day after the notice is given.

			

 

5.            Possible Reduction in Payment and Benefits. If the payments and benefits payable to Employee pursuant to this Agreement, either alone or together with other payments and benefits which Employee has the right to receive from Employer, would constitute a “parachute payment” under Section 280G of the Internal Revenue Code (“Code”), the payments and benefits payable by Employer pursuant to this Agreement shall be reduced, in the manner determined by Employee, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits payable by the Employer under this Agreement being non-deductible to the Employer pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code. The determination of any reduction in the payments and benefits to be made pursuant to this Section 4 shall be based upon the opinion of the Employer’s independent public accountants and the fee for such calculation shall be borne by the Employer. Such accountants shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the Termination Date, and may use such actuaries such as accountants deemed necessary or advisable for the purpose.

 

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6.            Compliance with Code Section 409A. It is intended that this Agreement comply with the provisions of Section 409A of the Code and the regulations and guidance of general applicability issued thereunder (referred to herein as “Section 409A”) so as to not subject the Employee to the payment of additional interest and taxes under Section 409A. In furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent Section 409A would result in the Employee being subject to the payment of an excise tax or any other additional income taxes or interest under Section 409A, the parties agree to amend this Agreement to avoid the application of such taxes and interest. The parties further intend the installment payments contemplated or required by this Agreement to be treated as a series of separate payments for 409A purposes.

 

	 	
			(A)       Notwithstanding any provision in this Agreement to the contrary, as needed to comply with Section 409A, if the Employee is a “specified employee” (within the meaning of Section 409A), payments due under this Agreement shall be subject to a six (6) month delay such that amounts otherwise payable during the six (6) month period following the Employee’s separation from service (as defined in Treasury Reg. §1.409A-1(h)) shall be accumulated and paid in a lump-sum catch-up payment as of the first day of the seventh month following the Employee’s separation from service (or, if earlier, the date of the Employee’s death). To the extent that the Employee is required to pay for the cost of any benefits to keep them in full force and effect during the six (6) month delay period, the Employee shall also be reimbursed for such out-of-pocket expenses as of the same date provided above.

			

 

	 	
			(B)       This Section 6 shall not apply to the extent such payments can be considered to be separation pay that is not part of a deferred compensation arrangement under Section 409A.

			

 

7.            Legal Fees and Costs and Interest. If the Employee files suit to enforce rights or receive benefits under this Agreement, and substantially prevails, then the court shall award the Employee a dollar amount sufficient to cover the Employee’s reasonable attorney fees and expenses incurred in the litigation. If however, the Employer prevails in such action, then the Employee shall be liable to reimburse the Employer for its attorney fees and costs, but not to exceed a total amount of $50,000. In the event that Employee is entitled to any payment under Section 4 or Section 7 hereof and such payment is not made within ten (10) days after it was due or is determined to have been due, it shall bear interest at the rate of three (3%) percent per annum from the date it was due until paid.

 

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8.            Documents. All documents, record, tapes and other media of any kind or description relating to the business of Employer or any of its subsidiaries and affiliates (the “Documents”), whether or not prepared by Employee, are and shall be the sole and exclusive property of Employer. The Documents (and any copies) shall be returned to Employer upon Employee’s termination of employment for any reason or at such earlier time or times as Employer may specify. Employee and Employee’s legal counsel shall, upon reasonable notice and during normal business hours, have access to all records of Employer, related to determining whether and when a Change in Control Event has occurred and the commencement of consideration thereof.

 

9.            Regulatory Requirements & Limitations. Notwithstanding anything contained in this Agreement to the contrary, it is understood and agreed that Employer shall not be required to make any payment or take any action under this Agreement if:

 

	 	
			(A)        Employer is declared by any Regulatory Agency or Authority to be insolvent, in default or operating in an unsafe or unsound manner, or if

			

 

	 	
			(B)        in the opinion of counsel to Employer such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to Employer, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or formal statements of policy, whether now existing or hereafter promulgated, of any Regulatory Agency or Authority, or (iii) otherwise is prohibited by any Regulatory Agency or Authority.

			

 

10.          Termination of Right to Severance. The Employee’s right to severance benefits under Section 4 of this Agreement shall terminate automatically and the Employer’s obligation to pay severance shall become null and void upon the earlier of (a) May 31, 2020, unless the circumstances described Section 4(C) occur or this Agreement is amended to extend the time period as permitted under Section 19, or (b) the termination of the Employee’s employment for any reason other than a termination that triggers the Employer’s obligation to provide severance benefits under Section 4. Following any such termination of severance rights under this Agreement, Employee shall have no further rights or entitlement to severance benefits under this Agreement, except as provided in Section 4(C). However, while the right to severance benefits shall terminate, the remaining provisions of this Agreement shall survive and shall continue to apply in full force and effect at all times during the remainder of the Employee’s employment with the Employer and thereafter as set forth below.

 

11.          Loyalty Obligations. Employee acknowledges and agrees that by virtue of the senior position held and her detailed involvement with the business and affairs of the Employer, Employee will develop substantial expertise and knowledge with respect to all aspects of the Employer’s business, affairs and operations and will have access to all significant aspects of the business, plans and operations of Employer, including the Confidential Information (defined in Section 3(E)). As such, Employee acknowledges that she owes a fiduciary duty of loyalty to the Employer to act in its best interests at all times, and Employee agrees that the provisions of this Section 11, as well as Sections 12 to 14 below (collectively the “Loyalty Obligations”) are reasonable and necessary in order to protect the best interests of the Employer and survive any termination of the right to receive severance benefits under Section 4 above.

 

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			(A)        Confidential Information. At all times, even after termination of employment (regardless of the circumstances), but subject to the limitations of Section 11(E), Employee shall hold in strictest confidence, and shall not use or disclose any of the Confidential Information (defined in Section 13(E)) to any Person or Entity, except to fulfill her employment obligations and while acting for the benefit and best interest of Employer, unless expressly authorized to do so by the President and CEO of Employer. This duty to protect, and not use or disclose Confidential Information shall remain in full force and effect until such time as the information becomes available to the public by lawful and proper means, and without a breach of duty of confidentiality by the Employee or another.

			

 

(i)        Third Party Information. Employee also recognizes that Parkway, the Bank and their affiliates have received, and in the future will receive, information from third parties that the third party considers to be confidential or proprietary information and which is, or may be, subject to a duty on the part of Parkway, the Bank or their affiliates not to disclose to others and to restrict its use only for certain limited purposes. Employee agrees to hold all such confidential or proprietary information from third parties in the strictest confidence and not to disclose it to any Person or Entity to use it except as necessary in carrying out Employee’s work for the Employer consistent with the obligations of Employer to such third party.

 

(ii)        Security and Access. At all times, Employee agrees to (a) comply with and enforce the security policies and procedures which seek to protect and safeguard the data, equipment, systems and all other facilities, IT resources and communication technologies of the Employer, Bank or its Affiliates (“Facilities and IT Resources”), and (b) not access or use any of the Facilities and IT Resources in any manner after termination of employment (regardless of the circumstances). Employee further agrees to promptly notify the Employer, Bank or Affiliates, as applicable, in the event he/she learns of a violation of any security policies or procedures by others, or of any other misappropriation or unauthorized access, use, or tampering with any of the Facilities and IT Resources by others.

 

(B)         Conflicting Employment. During employment by Employer, unless otherwise specifically approved by the Board after full disclosure in writing, (i) Employee shall not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Employer is now involved or becomes involved during Employee’s employment; and (ii) Employee shall not engage in any other activities that conflict with the business of the Employer or that materially interfere with her ability to devote the time necessary to fulfill her obligations to the Employer.

 

(C)         Notification of New Employer. In the event that Employee leaves the employ of the Employer and begins employment elsewhere, Employee agrees the Employer may send notice to Employee’s new employer (whether Employee is employed as an employee, consultant, independent contractor, director, partner, officer, advisor or manager) informing the new employer about Employee’s loyalty obligations and restrictions contained in this Agreement.

 

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(D)        Post-Employment Duty of Cooperation. By virtue of Employee’s employment, Employee will know information, including but not limited to Confidential Information, that is or may be material to and necessary for the Employer to appropriately and successfully conclude matters that involve third parties. As a result, following termination of employment (regardless of the circumstances)) Employee agrees to assist, and cooperate fully with, the Employer upon reasonable request, and to do so voluntarily (without legal compulsion) when such matters arise. This duty of cooperation is intended to allow the Employer to meet its legal obligations and satisfactorily conclude matters in a manner that achieves the best result possible for the Employer.

 

(i)         The matters on which cooperation may be requested include, but is not limited to, the actual or contemplated defense, prosecution, or investigation of claims involving the Employer or any of its subsidiaries or affiliate, by a third party (including employees who may assert claims) as well as responding to any other civil, criminal, administrative or investigative action, suit, proceeding, or inquiry, whether formal or informal, by a federal, state, or law enforcement or regulatory department, agency or authority, where the matter arises from or is related to events, acts, or omissions involving or pertaining to the operations, activities, employees or customers of the Employer that occurred during the period of Employee’s employment by the Employer (“Third Party Claims”).

 

(ii)        The Employee’s duty to cooperate includes, without limitation, Employee making herself reasonably available upon reasonable notice, without subpoena, to meet with the Employer and/or their counsel to provide complete, truthful and accurate information in interviews, depositions, and trial testimony as well as other related support activity. If the Employee provides cooperation under this Section 11(D) during a period in which the Employer is paying severance pay to the Employee, then the Employer will only reimburse the Employee for all out-of-pocket travel expenses reasonably incurred at the Employer’s request.

 

(iii)      If the cooperation provided occurs when no severance pay or benefits is due the Employee, then in addition to reimbursing the Employee for out-of-pocket travel expenses, the Employer will also reimburse Employee for her time expended on the Employer’s behalf at a rate of $300/day, or a pro-rata portion thereof. The Employer will make reasonable efforts to accommodate the scheduling needs of Employee so as to avoid, to the maximum extent possible, interference with the Employee’s then current duties and responsibilities.

 

(E)         Limitations/Permitted Disclosures. Nothing in this Section 11 or any other provision of this Agreement shall be construed to prevent, interfere with, limit or restrict the Employee from making disclosures, reports or complaints as authorized, permitted or required by federal or state law, including without limitation pursuant to the provisions of the Sarbanes-Oxley Act or Dodd-Frank Wall Street Reform Act and Consumer Protection Act or by regulations, rules or orders issued by federal or state regulatory agencies, including without limitations, Virginia Bureau of Financial Institution, Office of Comptroller of the Currency, U.S. Treasury, Bureau of Financial Protection or Securities and Exchange Commission, provided the disclosure does not exceed the extent of disclosure required by such law, regulation, rules or order.

 

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Further, nothing in this Agreement shall prevent, limit, impede or interfere (nor shall it be construed to prevent, limit, impede or interfere) with (i) Employee’s obligation to provide full, complete and truthful testimony when so required in response to a subpoena or order from a court or government agency; (ii) Employee’s right to report (including pursuant to whistleblower laws) possible violations of federal, state or local law or other improper actions/omissions to government agencies, to file a charge or complaint of discrimination, harassment or retaliation with government agencies, or to participate or cooperate in any investigation conducted by any government agency; or (iii) the Employee’s right to make confidential disclosures of information (including trade secrets) to a government agency, or to an attorney who is advising the Employee, for the purpose of reporting or as part of an investigation into a suspected violation of law, nor shall it prohibit the Employee from filing a lawsuit, complaint or other document that contains a trade secret, so long as the information containing the trade secret is filed under seal and is not otherwise disclosed except pursuant to court order. Employee further understands that her rights when making such protected disclosures are more fully spelled out in 18 U.S.C. § 1833, as amended, include immunity from criminal and civil liability from making protected disclosures of trade secrets under the Defend Trade Secrets Act of 2016. Finally, nothing in this Agreement authorizes the Employer to terminate Employee’s employment or otherwise retaliate against Employee for engaging in any of the foregoing activities.

 

(F)         Notice of Third Party Request/Order. Unless prohibited by law, regulation or order from doing so, the Employee shall provide written notice of the receipt of a third party request or order to disclose Confidential Information to the designated senior officers of the Parkway or its Successor within two (2) business days of receiving this request or order, but in any event sufficiently in advance of making any disclosure so as to permit the Employer to contest the disclosure or seek confidentiality protections.

 

12.          Non-Solicitation Restriction. During employment with the Employer and for the twelve (12) month period that immediately follows the Termination Date (regardless of the circumstances), or such time period as the Employer is obligated to pay severance benefits under this Agreement (whichever is longer) (“Restricted Period”), Employee shall not unfairly compete with the Employer by attempting to disrupt business relationships that the Employer has with either: (i) a Customer (see Section 3(F)) with whom Employee either had communications within the twelve (12) months prior to the Termination Date, or as to which Employee received Confidential Information during that same twelve (12) month period.

 

In this regard, Employee shall refrain during the Restricted Period from engaging in any of the following activities, whether Employee alone, or as an officer, director, stockholder, partner, member, investor, employee, consultant or agent for or on behalf of any other person or legal entity:

 

(i)           Attempting to disrupt or interfere with the business relationship with a Customer (as limited above) by directly or indirectly requesting, suggesting, encouraging or advising that Customer to withdraw, curtail, limit, cancel, terminate or not renew all or any portion of the Customer’s business with the Employer.

 

(ii)         Solicit the business of a Customer (as limited above) by communicating directly with that Customer (regardless of who initiates the communication and in what form it occurs) when as part of the communication Employee discusses or offers a Competitive Service or Product.

 

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13.          Non-Compete Restriction. At all times during employment with the Employer and immediately following the Termination Date (regardless of the circumstances) and throughout the Restricted Period (defined above), Employee shall not accept employment with or provide services to or on behalf of any Competing Financial Services Organization if (i) the position or the services to be performed by Employee involve the same or substantially similar duties and responsibilities as those performed by Employee on behalf of the Employer during Employee’s last twelve (12) months of employment with the Employer, or (ii) Employee is providing consulting, advisory or contract services (whether as a director, officer, independent contractor, member, owner or shareholder) related to the design, development, marketing or delivery of Competitive Services or Products that are intended to be directly competitive with offerings by the Employer.

 

(A)       Clarification. This restrictive covenant applies only if (a) the Competing Financial Services Organization operates, or is seeking to open, one or more branch facilities, within a sixty (60) mile radius of Floyd, Virginia or within a twenty (20) mile radius of any branch or office operated by the Employer (“Restricted Territory”) where its Competitive Services and/or Products are offered to the public, and (b) Employee will be performing services for the Competing Financial Services Organization in the Restricted Territory, or will be supervising or providing assistance to others who will be offering or providing Competitive Services or Products in the Restricted Territory on behalf of the Competing Financial Services Organization.

 

(B)         Limitation. Nothing in this Section 13 shall prevent Employee from owning stock in a publicly traded company that offers Competitive Services or Products in the areas serviced by Employer, provided Employee’s ownership constitutes less than five percent (5%) of the outstanding shares of the publicly traded company.

 

14.          Anti-Piracy Restriction. At all times during employment with the Employer, and immediately after the Termination Date (regardless of the circumstances) throughout the Restricted Period (defined above), Employee shall refrain from inducing, soliciting or encouraging a Key Employee (defined herein) of the Employer to quit employment with the intent, hope or purpose of having the Key Employee join a Competing Financial Services Organization in a similar capacity, if that competitive organization has customer service facilities located within the Restricted Territory (defined above). As used in this Section 14, “Key Employee” means anyone who holds a position of Vice President or higher with the Employer or any individuals who have reported to, or worked directly with, the Employee within the last six (6) months of Employee’s employment with the Employer.

 

15.          Enforcement. Employee acknowledges that each of the restrictive covenants set forth above in Section 11 through 14 is a stand-alone restriction and can be separately enforced as each is reasonable and necessary in order to protect the legitimate business interests of the Employer. A violation of any one of the covenants in Sections 11–14 will result in irreparable injury to the Employer. In the event of a breach or a threatened breach of this Agreement, in addition to all other remedies (legal or equitable), the Employer shall be entitled to specific performance of these provisions and the issuance of a restraining order and/or injunction prohibiting Employee from violating one or more of these restrictions. Nothing contained herein shall be construed as limiting or prohibiting the Employer from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of amounts paid in severance or other money damages. Should an injunction be issued, Employee waives the right to require that the court require a bond to be posted in excess of $500.00.

 

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16.          Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or subsection of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law, then such invalidity, illegality or unenforceability cannot be reformed by the court to cause it to be enforceable, then the offending provision shall be stricken from this Agreement, the remainder of this Agreement shall be construed and enforced as if the invalid, illegal or unenforceable provision had never been contained herein.

 

17.          Governing Law/Forum This agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, with the exception of its conflict of laws provisions. The parties agree that any lawsuit arising under this Agreement, relating to the Employee’s employment or its termination shall be brought and decided exclusively either in the Circuit Court for the City of Roanoke, Virginia or the U.S. District Court for the Western District of Virginia, Roanoke Division. Employee waives any objection to venue or jurisdiction in these courts regardless of where she may live when a suit is filed.

 

18.          Notices. All written notices required by this Agreement shall be deemed given when delivered personally or sent by registered or certified mail, return receipt requested, to the parties at their addresses set forth on the signature page of this Agreement. Each party may, from time to time, designate a different address to which notices should be sent by giving notice thereof in writing to the other party at least three days before the effective date of such change in address.

 

19.          Amendment. This Agreement may not be varied, altered, modified or in any way amended except by an instrument in writing executed by the parties hereto or their legal representatives. In this regard, the Employer may, in its sole discretion, elect to amend this Agreement to extend (but not reduce) the time period or term within which severance benefits may be due by changing the date from May 31, 2018 to a later date. To be effective, any such change to increase the time period or term in which severance benefits may become payable must be memorialized in writing, approved by the Board of Parkway or its Successor, and signed by President & CEO of the Employer and the Employee.

 

20.          Binding Effect. As of the Effective date, this Agreement shall be binding upon Employee and the Employer and the Successor.

 

21.          No Construction Against Any Party. If any part of this Agreement is deemed to be unclear or ambiguous, it shall be construed as if it were drafted jointly by all parties. Employee and Employer agree that neither party was in a superior bargaining position regarding the substantive terms of this Agreement.

 

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22.          Entire Agreement. This Agreement constitutes the complete, final and entire agreement of the parties with respect to the matters addressed herein and it supersedes and replaces all other prior agreements and understandings, whether written and oral, express or implied, with respect to the subject matter of this Agreement. No promises, representations or warranties have been made by any party to or for the benefit of the other with respect to such matters which are not expressly set forth herein.

 

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

 

	
			 

				
			Parkway Acquisition Corp. 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Thomas M. Jackson, Jr.

				
			 

			
	
			 

				
			 

				
			Chairman of Board of Directors 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	 	Beth R. Worrell	 
	 	 	 	 
	 	/s/ Beth R. Worrell	 
	 	Signature	 

 

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00324-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00324-of-00352.parquet"}]]