Document:

atoc8kex104091014.htm

EXECUTIVE EMPLOYMENT AGREEMENT

 

(President,)

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of September 1, 2014 (“Commencement Date”) by and between Robert Dragotta, an individual residing at 401 East Commerce Street, Bridgeton, NJ  08302  (the “Executive”) and Atomic World Media, Inc, a company (the “Company”), with an executive address at

 

Introduction

 

The Company was organized for the purpose of developing, marketing, operating and otherwise engaging in the business of a digital signage and mobile network. It is an out of home digital media network providing entertainment and advertising including media-related products and services, to commercial establishments (the “Business”), and/or to carry on or engage in any other business or activities as may be approved by the Board of Directors (the “Board”).  Executive has extensive experience and expertise in the Business.  The Company wishes to employ Executive, and Executive wishes to be employed by Company, as its President, subject to the terms, conditions and covenants contained herein.

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the Company and the Executive hereby agree as follows:

1.           Employment. The Company hereby employs Executive as its President, and accepts such employment, all upon the terms and conditions set forth herein (the “Employment”).

2.           Duties and Authority.  Executive shall serve as the President, of the Company, with such duties and authority as are conferred by the Board, and are as otherwise commensurate with such position. Executive shall have the power and authority necessary to fulfill and discharge his duties, subject to Board oversight and direction. Under the direction of the CEO,  Executive shall have the responsibility for operatio1ns, developing and directing the strategic advertising plans of the Company, selling advertising, including the continued advertising development of its business plan, budget and budget strategies, developing working relationships with advertising agencies,  creative input on commercials as may be requested by advertising agencies to ensure consistency with the Company’s high programming standards, as well as programming and such other duties and responsibilities as may be required from time to time by the Board consistent with Executive’s position as approved by the Board as President, and under the direction of the Chief Executive Officer. Executive will devote his full working time and attention to the Company and its Business, and will faithfully and diligently serve and endeavor to further the interests of Company

 

 

  

  

  

3.           Term.  The Term of Executive’s Employment under this Agreement will commence effective the date of receipt of the company’s current funding initiative in the amount of $2,000,000, and shall continue for 48 months unless terminated by Executive or by the Board, pursuant to Section 6 or Section 7 of this Agreement (the “Term”).

 

4.           Compensation

(a)           Base Salary. Executive shall receive a base salary (“Base Salary”), payable in accordance with Company’s customary payroll policies at such intervals as may from time to time be used by Company for paying its employees generally, but no less frequently than monthly, at an annual rate to be determined by the Board (but not less than $180,000 per annum.  Upon final completion of the company’s current funding initiative in the amount of $2,000,000 Executive shall receive for his efforts prior to this funding initiative, a $25,000 signing bonus along with a stock award of 150,000 shares of common stock subject to a 1 year cliff vesting and the base salary (“Base Salary”), payable in accordance with Company’s customary payroll policies at such intervals as may from time to time be used by Company for paying its employees generally, but no less frequently than monthly, at an annual rate to be determined by the Board (but not less than $180,000 per annum).

(b)           Bonus Compensation. The Board in its discretion may or may not establish bonus compensation or profit sharing or similar compensation arrangements, based on Executive’s performance and the overall performance of the Company, either on an "ad hoc" basis or pursuant to a bonus plan or arrangement as may be established at the Company's discretion for Executive only and/or for senior executives of the Company. If such arrangements are established by the Board for or within any given period of time, and subject to the prior written approval of the Board in each instance, Executive shall be entitled to compensation in addition to Base Salary, if any, pursuant to arrangements as may be established by the Board from time to time.

(c)           Executive agrees and acknowledges that the Base Salary and Bonus Compensation will be paid only from funds received in future raises or from positive cash-flow, as and if those funds are available.

(d)           Options or Warrants. The Board agrees to establish warrant or option rights for Executive and/or other executive officers or directors. If such rights are conferred by the Board, and subject to the prior written approval of the Board in each instance, Executive shall be entitled to options or  warrants for the Company’s membership interests pursuant to agreements as may be approved from time to time by the Board (collectively, “Warrant Agreements”). Executive acknowledges that the issuance of membership interests pursuant to any such Warrant Agreement may not be registered under any applicable federal or state securities laws, and Executive agrees not to transfer any of such membership interests except in compliance with applicable securities laws and regulations. The Warrant Agreements shall provide that, upon a Change in Control, the warrant agreement may immediately be exercised and converted into membership interests as provided therein. As used herein, “Change in Control” shall mean the occurrence of either of the following: (i) the acquisition in one or more transactions, by any person or entity of legal or beneficial ownership, direct or indirect, of more than 49% of the issued and outstanding voting securities of the Company at any time, or (ii) a change in the majority voting control of the Company, or if member(s) of the Company (who do not presently have such power) acquire the power to elect a majority of the Board. Executive represents that he is an “Accredited Investor”, as defined under federal securities laws.

 

 

  

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(e)           Benefits.  Executive will receive benefits under, any pension, profit sharing, insurance, hospitalization, medical, disability, stock purchase, stock option, stock ownership, vacation or other employee benefit plan, program or policy of the Company during the course of his Employment by the Company and which shall be afforded to him specifically by the Board, subject to the terms of such plans, programs or policies and commensurate with all other Executives of the Company.

(f)           Vacation. In addition to holidays established by the Board as Company holidays, during each year of the Employment Executive shall be entitled to 4 weeks (only two consecutive at a given time)  paid vacation time, as may reasonably be requested by Executive and reasonably approved by the Board. Executive’s vacation time will be taken on a reasonably scheduled basis consistent with Executive’s duties hereunder. Unused vacation time of no more than one week may be carried over to a subsequent year on a reasonably scheduled basis, so long as Executive’s performance is not materially and adversely affected.

 

(g)           Expenses.  Executive shall be entitled to reimbursement by the Company, in accordance with the Company's policies then applicable to its President, or, if none, then applicable to senior executives of the Company, against appropriate vouchers or other reasonable receipts, for the following authorized expenses: travel, entertainment and other standard business expenses reasonably incurred by him in the performance of his duties hereunder. Without limiting the generality of the foregoing, the Company will pay or reimburse the Executive for his business use of a cellular telephone, and for wireless computer, email and internet access devices.  All expenses shall be submitted in writing for approval to the CFO beforehand.

(h)           Withholding.  All payments required to be made by the Company hereunder to Executive shall be subject to the withholding of such amounts relating to taxes and other governmental assessments as the Company may reasonably determine it should withhold pursuant to any applicable law, rule or regulation.

5.           Work Site. Executive's duties may be discharged from any business location of the Company as approved by the CEO. Executive may travel for business purposes and work from remote locations with authorization by the CEO, and must be available by phone or e-mail each working day.

 

 

  

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6.           Death; Permanent Disability.  The Term shall terminate upon Executive’s death. If during the Term Executive fails because of illness or other incapacity to perform the services required to be performed by him hereunder for any consecutive period of more than 90 days, or for shorter periods aggregating more than 90 days in any consecutive twelve-month period (any such illness or incapacity being hereinafter referred to as "permanent disability"), then the Company in its discretion may at any time thereafter terminate the Term at a date specified after not less than 30 days' prior written notice to  Executive; provided, however, that no such termination shall be effective if prior to the date when such notice is given, the Executive's illness or incapacity shall have terminated, according to Executive’s medical records and concurred by his physician, and he shall be physically and mentally able to perform the services required hereunder and shall have taken up and be performing such duties. If the Employment hereunder shall be terminated by reason of Executive’s death or permanent disability, Executive or his estate, as the case may be, shall be entitled to receive (a) any earned and unpaid Base Salary accrued through the date of termination, (b) a pro rata portion of any annual bonus which Executive would otherwise have been entitled to receive pursuant to any bonus plan or arrangement for himself and/or senior executives of the Company (such pro rata portion to be payable at the time such annual bonus would otherwise have been payable to Executive), (c) subject to the terms thereof, any accrued reimbursements for expenses and any other benefits which may be due to Executive on the date of termination under the provisions of any employee benefit plan, program or policy, (d) the proceeds of Key-Man Life Insurance, if any, payable to Executive’s beneficiaries, and (e) any other benefits conferred by the Board.

7.           Other Termination.

(a)           For Cause. The Company may at any time during the Term, by explanation through written notice, terminate the employment of the Executive for cause, the cause to be specified in the notice.  For purposes of this Agreement, "cause" shall mean (i) any gross negligence, self dealing, including but not limited to any course of action which is determined not to be in the best interests of the company by the Board of Directors, or material willful misconduct of Executive in connection with the performance of his duties hereunder, including without limitation the intentional misappropriation of funds or property of the Company, securing or attempting to secure personally separate from his compensation, any profit in connection with any transaction entered into on behalf of the Company, or any material willful, intentional or malicious act having the effect of materially injuring the reputation, business or business relationships of the Company; (ii) engaging in any criminal enterprise involving moral turpitude, or (iii) conviction of a felony or misdemeanor involving moral turpitude or fraud.  Termination for cause shall be effective upon the giving of such notice and the Executive shall be entitled to receive any earned and unpaid Base Salary accrued through the date of termination and subject to the terms thereof, any benefits which may be due to the Executive on such date under the provisions of any employee benefit plan, program or policy plus three months health, dental and disability benefits.

(b)           Without Cause.  The Company may terminate the Term at any time, upon at least 90 days’ notice to Executive, without Cause, provided that in such event that the Company shall pay the base salary (as then in effect) for the life of the remaining employment term or six months, whichever is greater, (the “Payout Period”), in addition to (i) any additional earned and unpaid compensation or expense reimbursements accrued hereunder through the date of termination, (ii) subject to the terms thereof, any benefits which may be due to the Executive on such date under the provisions of any employee benefit plan, program or policy;  (iii) continuation of health, dental and disability coverage for the Payout Period following such termination, (iv) a pro rata portion of any annual bonus with respect to the fiscal year in which such termination occurs, (v) immediate vesting and immediate exercisability of all stock, option, warrant and similar rights that are granted or awarded to Executive by Company at any time, and (vi) other benefits conferred by the Board.

 

 

  

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(c)           By Executive Generally. Executive may also terminate the Term at any time, upon at least 90 days’ notice to the Company, with the same effects as if the Company terminated the term of this Agreement for Cause, as set forth above.

(d)           By Executive Due to Company Breach.  In the event of any material breach of this Agreement by the Company that remains uncured for 30 days after the Executive notifies the Company thereof, Executive may terminate the Term by giving 60 days’ notice to the Company, with the effects as provided herein for a termination by the Company without Cause.

(e)           Immediate Cessation of Duties. If a Termination Event occurs due to Cause or Executive’s resignation pursuant to subsection (c), the Company may direct Executive to immediately cease Executive’s activities on behalf of the Company, and within a prompt but reasonable period of no more than 10 days, to remove Executive’s personal belongings from the premises of the Company and/or to discontinue using any of the Company’s facilities, assets or properties.

 

8.           Ownership of Work Product and Ideas. During the Employment any discoveries, inventions, patents, materials, licenses and ideas related to the delivery of digital advertising content or digital retailing of goods and services, whether over the internet, on CD-ROM or otherwise, or the development of database applications for any such Industries (“Technology”), whether or not patentable or copyrightable and whether created and owned by Executive during the Employment or during any prior employment with Company or affiliates, or owned by the Company prior to or after the execution of this Agreement (“Work Product”), and all business opportunities within the Industry (“Opportunities”) introduced to Executive during the Employment, will be owned by the Company, and Executive will have no personal interest in such, except if the Board, excluding the vote of Executive (if he is a member of the Board), in its reasonable discretion, allows the Executive to participate in or have other rights to such Work Product or Opportunities during the Term or upon the termination of this Agreement. Executive will, in such connection, promptly disclose any such Work Product and Opportunities to the Company and, upon the request of the Board, will assign to the Company all rights to such Work Product and Opportunities, without additional compensation, unless otherwise decided by a majority vote of the Board.

 

  

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9.           Protection of Confidential Information

 

(a)           Definitions. Executive acknowledges that during the course of his employment, he will acquire Proprietary Information and Trade Secrets (as hereinafter defined), of the Company.  For purposes of this Agreement:

 

(i)           “Proprietary Information” shall mean all unpublished materials and information created, discovered, owned or otherwise controlled by the Company or its affiliates relating to the products of the Company or its affiliates, including, but not limited to financial information, data or statements, product  research and development, past, existing and future; product plans, designs and schematics, patents, client lists, computer date, documentation, algorithms, processes and know-how (whether or not reduced to writing and whether or not patentable or copyrightable), and business and marketing plans and strategies, pricing policies, cost and profit information, supplier identities, packaging and the like, disclosed orally, in writing, or by inspection.  Proprietary Information shall also include all other materials and information which have been clearly identified by the Company as “Proprietary Information,” “Trade Secrets” or “confidential information.”  The term “Proprietary Information” shall not include any information which is now generally known or available or which hereafter through no act or failure to act on the part of Executive becomes generally known or available; and

 

(ii)           “Trade Secrets” shall mean the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula or improvement related to the Technology which is secret and is not generally available to the public, which the Company or its affiliates both marks and treats as “Confidential,” and which gives the one who uses it an advantage over competitors who do not know of or use the Trade Secret.  A Trade Secret may include, without limitation, Proprietary Information relating to programs or products now existing or currently under design or development by the company or its affiliates.

 

(b)           Non-Disclosure. Executive agrees to hold the Proprietary Information and Trade Secrets of which Executive may acquire knowledge hereunder in the strictest confidence unless ordered to disclose same subject to legal proceeding instituted by any third party or as required in order to comply with authorized government requirements.  Executive further agrees not to disclose any Proprietary Information or Trade Secrets except to the Board of Directors of the Company, Executives, advisers, counsel and consultants of the Company and its affiliated companies, if any, on a “need to know basis” and then only to those persons who reasonably require the same for the purposes hereof and who are bound by a confidentiality agreement consistent in format and substance, with this Section and the policies of the Board of Directors of the Company.

 

 

  

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(c)           Return of Documents and Materials.  Executive agrees to use his best efforts to deliver promptly upon the termination of the Employment, and at any other time as the Company may request, all documents, technology, software, source codes, object codes, hardware (and all copies thereof), in whatever medium, relating to the business of the Company he possesses or has under his control.

10.           Non-Competition; No Solicitation.

(a)           Executive acknowledges and recognizes that the highly competitive nature of the Company’s business and that the goodwill and patronage of the Company’s customers and vendors constitute a substantial asset of the Company, having been acquired through considerable time, effort and money.  Accordingly, and subject to Executive’s covenants hereunder as to his full-time employment and best efforts on behalf of the Company, Executive agrees that during his employment with the Company, he shall not, without the written consent of the Company, directly or indirectly, either individually or as an employee, agent, partner, shareholder, consultant, option holder, guarantor or in any other capacity other than as a passive investor of less than 5% of the equity, participate in, engage in or have an active financial interest consulting or management position in any business, firm, company or other entity if it competes or is deemed or likely to compete  with the material business operation conducted by the Company or its subsidiaries or affiliates or any successor or assign thereof, nor will he solicit any other person to engage in any of the foregoing activities, nor will he solicit any employees, contractors or customers of the Company to change their relationship with the Company or to enter into a relationship or participate with a competitor of the Company.  For purposes of this Section, a Company “subsidiary” is any entity in which the Company owns, directly or indirectly, more than a 25% equity interest, and a Company “affiliate” is any entity which owns, directly or indirectly, more than 25% of the Company’s outstanding stock (a “company parent”) or of which more than 25% is owned by any company parent. The Executive acknowledges that the scope of this restriction is appropriate and necessary to protect the Company’s legitimate business interests.

(b)           Participation in the management of any business operation other than in connection with the management of a business operation which is in direct competition with the Company or its subsidiaries or affiliates or any successor or assign thereof shall not be deemed to be a breach of Section 10(a). In addition, the provisions of Section 10(a) shall not prohibit the ownership by the Executive (as the result of open market purchase) of less than 15% of any class of capital stock of any company which is regularly traded on a national securities exchange or over-the-counter on the NASDAQ System.

(c)           Executive will not at any time during his employment with the Company solicit or assist or encourage the solicitation of any employee of the Company or any of its subsidiaries or affiliates to work for Executive or for any business, firm, Company or other entity in which the Executive, directly or indirectly, in any capacity described in Section 10(a) hereof, participates or engages (or expects to participate or engage) or has (or expects to have) a financial interest or management position.

 

 

  

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(d)           Executive shall not at any time during his employment directly or indirectly compete with the Company by soliciting, inducing or influencing any of the customers of the Company to discontinue or reduce the extent of such relationship with the Company, or commence or expand any such relationship with any competitor of the Company.

(e)           If any of the covenants contained in this Section 10 are held by a court of competent jurisdiction to be unenforceable because of the duration of such provision, the activity limited by or the subject of such provision and/or the area covered thereby, then the Company and the Executive shall petition the court to make such determination so that it shall construe such restriction so as to thereafter be limited or reduced to be enforceable to the greatest extent permissible by applicable law.

11.           Survival of Restrictions. The restrictions and covenants set forth in Sections 8, 9 and 10 shall survive the termination of this Agreement and remain binding on Executive and enforceable by the Company for two years following termination; provided, however, that such restrictions and covenants with the exception of Section 9 shall terminate immediately upon termination without cause.

12.           Equitable Remedies.  Executive acknowledges that he has been employed for his unique talents and that the Company will suffer irreparable damage if any provisions of Sections 8, 9 or 10 hereof are not performed strictly in accordance with their terms or are otherwise breached. Executive hereby expressly agrees that the Company shall be entitled as a matter of right to seek injunctive or other equitable relief, in addition to all other remedies permitted by law, to prevent a breach or violation by Executive and to secure enforcement of the provisions of Sections 8, 9 or 10 hereof.  Resort to such equitable relief, however, shall not constitute a waiver or any other rights or remedies that the Company may have.

 

13.           Conflicting Agreements. Executive warrants and represents that he has disclosed to the Company any existing or proposed agreements to which Executive is a party that may adversely affect Executive’s ability to render his services to the Company hereunder.

14.           Errors and Omissions Insurance.  If approved by the Board, the Company agrees to maintain for the benefit of Executive, Directors and Officers liability insurance in amounts commensurate with the business risk associated with Executive’s duties and the Business. The Company will be responsible for the payment of any amount deductible under such policy as such deductible may apply to Executive.

15. Use of Likeness. Executive agrees to allow the Company to use his name, approved biography and likeness in connection with information that may be disseminated concerning the Company.  Executive agrees to appear and actively participate on behalf of the Company in the general promotion of the Business.

 

 

  

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16.Disclosure Regarding Preparation of Agreement and Conflicts of Interest. The parties acknowledge that counsel for the Company, Berger Singerman, P.A., prepared this Agreement on behalf of and in the course of its representation of the Company, that each party has been advised that inherent or possible conflicts of interest based on competing individual or Company interests or concerns may exist, and that each has been advised to, and has had full opportunity to, seek advice of independent counsel.

17.           No Presumption Based on Drafting. The parties acknowledge that they fully negotiated this Agreement.  The fact that the final versions or any drafts of this Agreement were prepared by a particular counsel shall create no presumption and specifically shall not cause any ambiguities to be construed against either party.

 

18.           Miscellaneous                                Provisions

 

(a)           No provision of this Agreement shall be deemed to have been waived unless such wavier is in writing signed by the waiving party.  No failure by any party to insist upon the strict performance of any provision of this Agreement, or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach, or such provision or any other provision.  No waiver of any provision of this Agreement shall be deemed a waiver of any other provision of this Agreement or wavier of such provision with respect to any subsequent breach, unless expressly provided in writing.

 

(b)           All notices required or permitted to be given under this Agreement shall be in writing.  Notices may be served by:  (1) certified or registered mail postage pre-paid with return receipt requested, or by private courier, prepaid; (2) by facsimile or other telecommunication device capable of transmitting or creating a written record, with a copy sent by U.S. mail or by personal delivery three (3) days after the initial facsimile transmission; or  (3) personally.  Mailed notices shall be deemed delivered three days after mailing, properly addressed, return receipt signed.  Couriered notices shall be deemed delivered on the date the courier warrants a delivery has occurred.  Facsimile notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office.  Personal delivery shall be effective when accomplished upon signature of receipt or appropriate proof from the deliverer.   All notices shall be given to the parties at the addresses first given above unless a party changes his or its address by giving notice to the other party as provided herein.

 

(c)           This Agreement constitutes the entire Agreement of the parties relating to the subject matter hereof.  There are no terms, conditions or obligations other than those contained in this Agreement.  This Agreement supersedes all prior communications, representations or agreements between the parties relating to the subject matter hereof.  This Agreement may not be amended except in writing executed by the parties.

 

 

  

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(d)           The invalidity or unenforceability of any particular provision of this Agreement shall not effect the other provisions hereof; all of which shall remain enforceable in accordance with their terms.  Should any of the obligations hereunder be found illegal or unenforceable, the Company and Executive shall petition the court that such obligations shall be enforceable within whatever terms a court of competent jurisdiction shall deem allowable by law.  Executive may not assign, sell, subcontract, delegate or otherwise transfer his obligations under this Agreement, without the prior written consent of the Board, and any attempted assignment or delegation shall be void and without effect.

 

(e)           This Agreement shall inure to the benefit of the successors and assigns of the Company as if such Agreement had been originally negotiated and entered into by and between Executive and such successor and/or assign of the Company.  As a condition to any merger, corporate reorganization, sale of the Company’s assets or comparable transaction, the assignee, purchaser or successor, as the case may be, shall be required to undertake in writing to perform all of the Company’s obligations hereunder and specifically to agree in writing to assume this Agreement.

 

(f)           This Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida for agreements wholly negotiated, entered into and performed within the State of Florida.

 

(g)           Executive acknowledges that the Company and its affiliated companies are new and evolving companies in the Industry, and that protection of Proprietary Information, Confidential Information, Work Product, Trade Secrets and Opportunities, provided for in this Agreement are important to future prospects for growth and business development of the Company.  Executive acknowledges that the Company may not have an adequate remedy at law in the event of any breach or threatened breach by Executive of any provision of Sections 8, 9 and 10, and that the Company may suffer irreparable damage and injury as a result. Accordingly, in the event of any such breach or threatened breach, Executive hereby consents to the Company’s application for injunctive relief against him by any court of competent jurisdiction without the posting of any bond or security therefore.

 

(h)           This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement binding on all the parties, notwithstanding that all parties are not signatories to the same counterpart.  The section headings in this Agreement are included for convenience only; they do not give full notice of the terms of any portion of this Agreement, and are not relevant to the interpretation of any provision of this Agreement.

 

(i)           All rights and obligations shall cease upon termination of this Agreement, except for the rights and obligations set forth in or arising out of Sections 8, 9 and 10, which shall survive the termination of this Agreement as provided in Section 10.

 

(j)           Any dispute arising under this Agreement that cannot be settled through negotiation, or, if the parties mutually agree, mediation, shall be settled by arbitration before and pursuant to the applicable rules of the American Arbitration Association in Fort Lauderdale, Florida.  The arbitration shall include an award of attorney’s fees and costs to the prevailing party.  The parties waive the right to seek punitive damages (but not the equivalent of statutory damages for copyright infringement) and the arbitrator shall have no authority to award such damages.  The arbitration award shall be confirmed by the entry of a judgment in an appropriate jurisdiction.  The parties waive trial by jury in all events.

 

 

  

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(k)           Facsimile signatures on this Agreement shall be deemed to be originals and to be legally binding and effective.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first written above.

 

 

	 	

EXECUTIVE

 

 

________________________________

Robert Dragotta

  

ATOMIC PAINTBALL, INC.

 

Darren Dunckel

CEO

  

By: ______________________________

 

 

 

  

11Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made effective as of February 27, 2014 (the “Effective Date”), by and between Mt. Washington Savings Bank, an Ohio stock savings and loan association (the “Bank”) and Gregory P. Niesen (the “Executive”).  The Bank and Executive are sometimes collectively referred to herein as the “parties.”  Any reference to the “Company” shall mean MW Bancorp, Inc., the holding company of the Bank.  The Company is a signatory to this Agreement for the purpose of guaranteeing the Bank’s performance hereunder.

 

WITNESSETH

 

WHEREAS, Executive is currently employed as President and Chief Executive Officer of the Bank;

 

WHEREAS, the Bank has adopted a Plan of Conversion pursuant to which the Bank will convert to an Ohio stock savings and loan association and become a wholly owned subsidiary of the Company;

WHEREAS, the Bank desires to assure itself of the continued availability of the Executive’s services as provided in this Agreement; and

WHEREAS, the Executive is willing to serve the Bank on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the terms and conditions hereinafter provided, the parties hereby agree as follows:

 

1.             POSITION AND RESPONSIBILITIES.

 

During the term of this Agreement Executive agrees to serve as President and Chief Executive Officer of the Bank, and will perform all duties and will have all powers that are generally incident to the office of the President and Chief Executive Officer.  Without limiting the generality of the foregoing, Executive will be responsible for the overall management of the Bank, and will be responsible for establishing the business objectives, policies and strategic plans of the Bank in conjunction with the Board of Directors of the Bank (the “Board”). Executive also will be responsible for providing leadership and direction to all departments or divisions of the Bank, and will be the primary contact between the Board and other officers and employees of the Bank.  As President and Chief Executive Officer, Executive will report directly to the Board.  Executive also agrees to serve, if elected, as an officer and director of any affiliate of the Bank.

 

    	  

    	 

    
 

 

2.             TERM AND DUTIES.

 

(a)           Three Year Contract; Annual Renewal.  The term of this Agreement shall commence as of the Effective Date and shall continue thereafter for a period of three (3) years.  Commencing on the first anniversary date of this Agreement (the “Anniversary Date”) and continuing on each Anniversary Date thereafter, the term of this Agreement shall renew for an additional year such that the remaining term of this Agreement is always three (3) years; provided, however, that in order for this Agreement to renew, the disinterested members of the Board must take the following actions within the time frames set forth below prior to each Anniversary Date: (i) at least thirty (30) days prior to the Anniversary Date, conduct or review a comprehensive performance evaluation of Executive for purposes of determining whether to extend this Agreement; and (ii) affirmatively approve the renewal or non-renewal of this Agreement, which decision shall be included in the minutes of the Board’s meeting.  If the decision of such disinterested members of the Board is not to renew this Agreement, then the Board shall provide Executive with a written notice of non-renewal (“Non-Renewal Notice”) prior to any Anniversary Date, such that this Agreement shall terminate at the end of twenty-four (24) months following such Anniversary Date.  Notwithstanding the foregoing, in the event that the Company or the Bank has entered into an agreement to effect a transaction which would be considered a Change in Control as defined below, then the term of this Agreement shall be extended and shall terminate thirty-six (36) months following the date on which the Change in Control occurs.

 

(b)           Termination of Agreement.  Notwithstanding anything contained in this Agreement to the contrary, either Executive or the Bank may terminate Executive’s employment with the Bank at any time during the term of this Agreement, subject to the terms and conditions of this Agreement.

 

(c)           Continued Employment Following Expiration of Term.  Nothing in this Agreement shall mandate or prohibit a continuation of Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank and Executive may mutually agree.

(d)           Duties; Membership on Other Boards.  During the term of this Agreement, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence approved by the Board, Executive shall devote substantially all of his business time, attention, skill, and efforts to the faithful performance of his duties hereunder, including activities and services related to the organization, operation and management of the Bank; provided, however, that, Executive may serve, or continue to serve, on the boards of directors of, and hold any other offices or positions in, business companies or business or civic organizations, which, in the Board’s judgment, will not present any conflict of interest with the Bank, or materially affect the performance of Executive’s duties pursuant to this Agreement.  Executive shall provide the Board of Directors annually for its approval a list of organizations for which the Executive acts as a director or officer.

 

3.             COMPENSATION, BENEFITS AND REIMBURSEMENT.

 

(a)           Base Salary.  In consideration of Executive’s performance of the duties set forth in Section 2, the Bank shall provide Executive the compensation specified in this Agreement.  The Bank shall pay Executive a salary of $161,300.00 per year (“Base Salary”).  The Base Salary shall be payable biweekly, or with such other frequency as officers of the Bank are generally paid. During the term of this Agreement, the Base Salary shall be reviewed at least annually by the Board or by a committee designated by the Board, and the Bank may increase, but not decrease (except for a decrease that is generally applicable to all employees) Executive’s Base Salary. Any increase in Base Salary shall become “Base Salary” for purposes of this Agreement.

 

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(b)           Bonus and Incentive Compensation.  Executive shall be entitled to equitable participation in incentive compensation and bonuses in any plan or arrangement of the Bank or the Company in which Executive is eligible to participate.  Nothing paid to Executive under any such plan or arrangement will be deemed to be in lieu of other compensation to which Executive is entitled under this Agreement.

 

(c)           Employee Benefits; Automobile.  The Bank shall provide Executive with employee benefit plans, arrangements and perquisites substantially equivalent to those in which Executive was participating or from which he was deriving benefit immediately prior to the commencement of the term of this Agreement, and the Bank shall not, without Executive’s prior written consent, make any changes in such plans, arrangements or perquisites that would adversely affect Executive’s rights or benefits thereunder, except as to any changes that are applicable to all participating employees.  In addition to the Base Salary provided in Section 3(a), the Bank shall provide the Executive with an automobile (whether Bank-owned or leased) suitable to the position of President and Chief Executive Officer of the Bank, which automobile shall be for Executive’s business and personal use, and the Bank will pay the cost of such automobile, including insurance, repairs and fuel.  Without limiting the generality of the foregoing provisions of this Section 3(c), Executive will be entitled to participate in and receive benefits under any employee benefit plans including, but not limited to, retirement plans, supplemental retirement plans, pension plans, profit-sharing plans, health-and-accident insurance plans, medical coverage or any other employee benefit plan or arrangement made available by the Bank and/or the Company in the future to its senior executives, including any stock benefit plans, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.

 

(d)           Paid Time Off.  Executive shall be entitled to paid vacation time each year during the term of this Agreement (measured on a fiscal or calendar year basis, in accordance with the Bank’s usual practices), as well as sick leave, holidays and other paid absences in accordance with the Bank’s policies and procedures for senior executives.  Any unused paid time off during an annual period shall be treated in accordance with the Bank’s personnel policies as in effect from time to time.

 

(e)           Expense Reimbursements.  The Bank shall also pay or reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred by Executive during the course of performing his obligations under this Agreement, including, without limitation, fees for memberships in such clubs and organizations as Executive and the Board shall mutually agree are necessary and appropriate in connection with the performance of his duties under this Agreement, upon presentation to the Bank of an itemized account of such expenses in such form as the Bank may reasonably require, provided that such payment or reimbursement shall be made as soon as practicable but in no event later than March 15 of the year following the  year in which such right to such payment or reimbursement occurred.

 

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4.             PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

 

(a)           Upon the occurrence of an Event of Termination (as herein defined) during the term of this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination’’ shall mean and include any one or more of the following:

 

(i)            the involuntary termination of Executive’s employment hereunder by the Bank for any reason other than termination governed by Section 5 (in connection with or following a Change in Control), Section 6 (due to Disability or death), Section 7 (due to Retirement), or  Section 8 (for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or

 

(ii)           Executive’s resignation from the Bank’s employ upon any of the following, unless consented to by Executive:

 

(A)           failure to appoint Executive to the position set forth in Section 1, or a material change in Executive’s function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Bank);

 

(B)           a relocation of Executive’s principal place of employment to a location that is more than 10 miles from the location of the Bank’s principal executive offices as of the date of this Agreement;

 

(C)           a material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or benefits that is generally applicable to officers or employees of the Bank);

 

(D)           a liquidation or dissolution of the Bank; or

 

(E)            a material breach of this Agreement by the Bank.

 

Upon the occurrence of any event described in clause (ii) above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation for “Good Reason” upon not less than thirty (30) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days) after the event giving rise to the right to elect, which termination by Executive shall be an Event of Termination.  The Bank shall have thirty (30) days to cure the condition giving rise to the Event of Termination, provided that the Bank may elect to waive said thirty (30) day period.

 

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(b)           Upon the occurrence of an Event of Termination, the Bank shall pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, the Base Salary and bonuses that Executive would be entitled to for the remaining unexpired term of the Agreement.  For purposes of determining the bonus(es) payable hereunder, the bonus(es) will be deemed to be (i) equal to the highest bonus paid at any time during the prior three years, and (ii) otherwise paid at such time as such bonus would have been paid absent an Event of Termination.  Such payments shall be paid in a lump sum on the 30th day following the Executive’s Separation from Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following the Event of Termination.  Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release of his claims against the Bank, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement (the “Release”), and (ii) the payments and benefits shall begin on the 30th day following the date of the Executive’s Separation from Service, provided that before that date, the Executive has signed (and not revoked) the Release and the Release is irrevocable under the time period set forth under applicable law.

 

(c)           Upon the occurrence of an Event of Termination, the Bank shall pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum cash payment reasonably estimated to be equal to the present value of the contributions that would have been made on the Executive’s behalf under the Bank’s defined contribution plans (e.g., 401(k) Plan, ESOP, and any other defined contribution plan maintained by the Bank), as if Executive had continued working for the Bank for the remaining unexpired term of the Agreement following such Event of Termination, earning the salary that would have been achieved during such period.  Such payments shall be paid in a lump sum within thirty (30) days of the Executive’s Separation from Service and shall not be reduced in the event Executive obtains other employment following the Event of Termination.

 

(d)           Upon the occurrence of an Event of Termination, the Bank shall provide, at the Bank’s expense, for the remaining unexpired term of the Agreement, nontaxable medical and dental coverage and life insurance coverage substantially comparable, as reasonably available, to the coverage maintained by the Bank for Executive prior to the Event of Termination, except to the extent such coverage may be changed in its application to all Bank employees.  Notwithstanding the foregoing, if applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the Executive is not permitted under the terms of the applicable health plans, or if providing such benefits would subject the Bank to penalties, then the Bank shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the value of such non-taxable medical and dental benefits, with such payment to be made by lump sum within ) business days of the Date of Termination, or if later, the date on which the Bank determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the foregoing reasons.

 

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(e)           For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that either no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination.  For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii).  If Executive is a Specified Employee, as defined in Code Section 409A and any payment to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.

 

5.             CHANGE IN CONTROL.

 

(a)           Any payments made to Executive pursuant to this Section 5 are in lieu of any payments that may otherwise be owed to Executive pursuant to this Agreement under Section 4, such that Executive shall either receive payments pursuant to Section 4 or pursuant to Section 5, but not pursuant to both Sections.

(b)           For purposes of this Agreement, the term “Change in Control” shall mean:

 

	
  

	
(1)

	
Merger:  The Company or the Bank merges into or consolidates with another entity, or merges another Bank or corporation into the Bank or the Company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation;

 

	
  

	
(2)

	
Acquisition of Significant Share Ownership:  A person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company’s or the Bank’s voting securities; provided, however, this clause (2) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

 

	
  

	
(3)

	
Change in Board Composition:  During any period of two consecutive years, individuals who constitute the Company’s or the Bank’s Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Company’s or the Bank’s Board of Directors; provided, however, that for purposes of this clause (c), each director who is first elected by the board (or first nominated by the board for election by the stockholders or corporators) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period; or

 

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(4)

	
Sale of Assets:  The Company or the Bank sells to a third party all or substantially all of its assets.

 

	
  

	
 
(5)           Notwithstanding anything herein to the contrary, a Change in Control shall not be deemed to have occurred in connection with a conversion of the Bank from a mutual to a stock bank and/or the Bank’s reorganization as a subsidiary of the Company.

           

(c)           Upon the occurrence of a Change in Control followed within eighteen (18) months by an Event of Termination (as defined in Section 4 hereof), Executive, shall receive as severance pay or liquidated damages, or both, a lump sum cash payment equal to three times the sum of (i) Executive’s highest annual rate of Base Salary paid to Executive at any time under this Agreement, plus (ii) the highest bonus paid to Executive with respect to the three completed fiscal years prior to the Change in Control.  Such payment shall be paid in a lump sum within ten (10) days of the Executive’s Separation from Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following the Event of Termination.

 

(d)           Upon the occurrence of a Change in Control followed within eighteen (18) months by an Event of Termination (as defined in Section 4 hereof), the Bank shall pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum cash payment reasonably estimated to be equal to the present value of the contributions that would have been made on Executive’s behalf under the Bank’s defined contribution plans (e.g., 401(k) Plan, ESOP, and any other defined contribution plan maintained by the Bank), as if Executive had continued working for the Bank for thirty-six (36) months after the effective date of such termination of employment, earning the salary that would have been achieved during such period.  Such payments shall be paid in a lump sum within ten (10) days of the Executive’s Separation from Service and shall not be reduced in the event Executive obtains other employment following the Event of Termination.  If Executive is a Specified Employee, as defined in Code Section 409A and any payment to be made under this sub-paragraph (c) or (d) of this Section 5 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.

 

(e)           Upon the occurrence of a Change in Control followed within eighteen (18) months by an Event of Termination (as defined in Section 4 hereof), the Bank (or its successor) shall provide at the Bank’s (or its successor’s) expense, nontaxable medical and dental coverage and life insurance coverage substantially comparable, as reasonably available, to the coverage maintained by the Bank for Executive prior to his termination, except to the extent such coverage may be changed in its application to all Bank employees and then the coverage provided to Executive shall be commensurate with such changed coverage.  Such coverage shall cease thirty-six (36) months following the termination of Executive’s employment.  Notwithstanding the foregoing, if applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the Executive is not permitted under the terms of the applicable health plans, or if providing such benefits would subject the Bank to penalties, then the Bank shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the value of such non-taxable medical and dental benefits, with such payment to be made by lump sum within ) business days of the Date of Termination, or if later, the date on which the Bank determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the foregoing reasons.  

 

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(f)           Notwithstanding the preceding paragraphs of this Section 5, in the event that the aggregate payments or benefits to be made or afforded to Executive in the event of a Change in Control would be deemed to include an “excess parachute payment” under Section 280G of the Internal Revenue Code or any successor thereto, then such payments or benefits shall be reduced to an amount, the value of which is one dollar ($1.00) less than an amount equal to three (3) times Executive’s “base amount,” as determined in accordance with Section 280G of the Code.  In the event a reduction is necessary, then the cash severance payable by the Bank pursuant to Section 5 shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable by the Bank under Section 5 being non-deductible to the Bank pursuant to Section 280G of the Code and subject to excise tax imposed under Section 4999 of the Code.

 

6.             TERMINATION FOR DISABILITY OR DEATH.

 

(a)           Termination of Executive’s employment based on “Disability” shall be construed to comply with Section 409A of the Internal Revenue Code and shall be deemed to have occurred if: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months; (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months, Executive is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Bank or the Company; or (iii) Executive is determined to be totally disabled by the Social Security Administration. The provisions of Sections 6(b) and (c) shall apply upon the termination of the Executive’s employment based on Disability.  Upon the determination that Executive has suffered a Disability, disability payments hereunder shall commence within thirty (30) days.

 

(b)           Executive shall be entitled to receive benefits under all short-term or long-term disability plans maintained by the Bank for its executives.  To the extent such benefits are less than Executive’s Base Salary, the Bank shall pay Executive an amount equal to the difference between such disability plan benefits and the amount of Executive’s Base Salary for the longer of  one (1) year following the termination of his employment due to Disability or the remaining term of this Agreement, which shall be payable in accordance with the regular payroll practices of the Bank.

 

(c)           The Bank shall cause to be continued life insurance coverage and non-taxable medical and dental coverage substantially comparable, as reasonably available, to the coverage maintained by the Bank for Executive prior to the termination of his employment based on Disability, except to the extent such coverage may be changed in its application to all Bank employees or not available on an individual basis to an employee terminated based on Disability.  This coverage shall cease upon the earlier of (i) the date Executive returns to the full-time employment of the Bank; (ii) Executive’s full-time employment by another employer; (iii) expiration of the remaining term of this Agreement; or (iv) Executive’s death.

 

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(d)           In the event of Executive’s death during the term of this Agreement, his estate, legal representatives or named beneficiaries (as directed by Executive in writing) shall be paid Executive’s Base Salary at the rate in effect at the time of Executive’s death in accordance with the regular payroll practices of the Bank for a period of one (1) year from the date of Executive’s death, and the Bank shall continue to provide non-taxable medical, dental and other insurance benefits normally provided for Executive’s family (in accordance with its customary co-pay percentages) for twelve (12) months after Executive’s death.  Such payments are in addition to any other life insurance benefits that Executive’s beneficiaries may be entitled to receive under any employee benefit plan maintained by the Bank for the benefit of Executive, including, but not limited to, the Bank’s tax-qualified retirement plans.

 

7.             TERMINATION UPON RETIREMENT.

 

Termination of Executive’s employment based on “Retirement” shall mean termination of Executive’s employment at any time after Executive reaches age 65 or in accordance with any retirement policy established by the Board with Executive’s consent as it applies to him.  Upon termination of Executive based on Retirement, no amounts or benefits shall be due Executive under this Agreement, and Executive shall be entitled to all benefits under any retirement plan of the Bank and other plans to which Executive is a party.

 

8.             TERMINATION FOR CAUSE.

 

(a)           The Bank may terminate Executive’s employment at any time, but any termination other than termination for “Cause,” as defined herein, shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after termination for “Cause.”  The term “Cause” as used herein, shall exist when there has been a good faith determination by the Board that there shall have occurred one or more of the following events with respect to the Executive:

 

	
  

	
(1)

	
personal dishonesty in performing Executive’s duties on behalf of the Bank;

	
  

	
(2)

	
incompetence in performing Executive’s duties on behalf of the Bank;

	
  

	
(3)

	
willful misconduct that in the judgment of the Board will likely cause economic damage to the Bank or injury to the business reputation of the Bank;

	
  

	
(4)

	
breach of fiduciary duty involving personal profit;

	
  

	
(5)

	
material breach of the Bank’s Code of Ethics;

	
  

	
(6)

	
intentional failure to perform stated duties under this Agreement after written notice thereof from the Board;

 

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(7)

	
willful violation of any law, rule or regulation (other than traffic violations or similar offenses) that reflect adversely on the reputation of the Bank, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or

	
  

	
(8)

	
material breach by Executive of any provision of this Agreement.

 

Notwithstanding the foregoing, Cause shall not be deemed to exist unless there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Executive and an opportunity for the Executive to be heard before the Board), finding that in the good faith opinion of the Board the Executive was guilty of conduct described above and specifying the particulars thereof.  Prior to holding a meeting at which the Board is to make a final determination whether Cause exists, if the Board determines in good faith at a meeting of the Board, by not less than a majority of its entire membership, that there is probable cause for it to find that the Executive was guilty of conduct constituting Cause as described above, the Board may suspend the Executive from his duties hereunder for a reasonable period of time not to exceed fourteen (14) days pending a further meeting  at which the Executive shall be given the opportunity to be heard before the Board.  Upon a finding of Cause, the Board shall deliver to the Executive a Notice of Termination, as more fully described in Section 10 below.

 

(b)           For purposes of this Section 8, no act or failure to act, on the part of Executive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Bank.  Any act, or failure to act, based upon the direction of the Board or based upon the advice of counsel for the Bank shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Bank.

 

9.             RESIGNATION FROM BOARDS OF DIRECTORS

 

In the event of Executive’s termination of employment due to an Event of Termination, Executive’s service as a director of the Bank, the Company, and any affiliate of the Bank or the Company shall immediately terminate.  This Section 9 shall constitute a resignation notice for such purposes.

10.           NOTICE.

 

(a)           Any purported termination by the Bank for Cause shall be communicated by Notice of Termination to Executive.  If, within thirty (30) days after any Notice of Termination for Cause is given, Executive notifies the Bank that a dispute exists concerning the termination, the parties shall promptly proceed to arbitration, as provided in Section 20.  Notwithstanding the pendency of any such dispute, the Bank shall discontinue paying Executive’s compensation until the dispute is finally resolved in accordance with this Agreement.  If it is determined that Executive is entitled to compensation and benefits under Section 4 or 5, the payment of such compensation and benefits by the Bank shall commence immediately following the date of resolution by arbitration, with interest due Executive on the cash amount that would have been paid pending arbitration (at the prime rate as published in The Wall Street Journal from time to time).

 

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(b)           Any other purported termination by the Bank or by Executive shall be communicated by a “Notice of Termination” (as defined in Section 10(c)) to the other party.  If, within thirty (30) days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the parties shall promptly proceed to arbitration as provided in Section 20.  Notwithstanding the pendency of any such dispute, the Bank shall continue to pay Executive his Base Salary, and other compensation and benefits in effect when the notice giving rise to the dispute was given (except as to termination of Executive for Cause); provided, however, that such payments and benefits shall not continue beyond the date that is 36 months from the date the Notice of Termination is given.  In the event the voluntary termination by Executive of his employment is disputed by the Bank, and if it is determined in arbitration that Executive is not entitled to termination benefits pursuant to this Agreement, he shall return all cash payments made to him pending resolution by arbitration, with interest thereon at the prime rate as published in The Wall Street Journal from time to time, if it is determined in arbitration that Executive’s voluntary termination of employment was not taken in good faith and not in the reasonable belief that grounds existed for his voluntary termination.  If it is determined that Executive is entitled to receive severance benefits under this Agreement, then any continuation of Base Salary and other compensation and benefits made to Executive under this Section 10 shall offset the amount of any severance benefits that are due to Executive under this Agreement.

 

(c)           For purposes of this Agreement, a “Notice of Termination” shall mean a written notice that shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

 

11.           POST-TERMINATION OBLIGATIONS.

 

(a)           One Year Non-Solicitation.  Executive hereby covenants and agrees that, for a period of one year following his termination of employment with the Bank, he shall not, without the written consent of the Bank, either directly or indirectly (i) solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of the Bank or the Company, or any of their respective subsidiaries or affiliates, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any business whatsoever that competes with the business of the Bank or the Company, or any of their direct or indirect subsidiaries or affiliates or has headquarters or offices within 25 miles of the locations in which the Bank or the Company has business operations or has filed an application for regulatory approval to establish an office, and (ii) solicit or encourage any customer or supplier to terminate or otherwise modify adversely its business relationship with the Bank.

 

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(b)           Six Month Non-Competition.  Executive hereby covenants and agrees that, for a period of six months following his termination of employment with the Bank, he shall not, without the written consent of the Bank, either directly or indirectly become an officer, employee, consultant, director, independent contractor, agent, sole proprietor, joint venturer, greater than 5% equity owner or stockholder, partner or trustee of any savings association, savings and loan association, savings and loan holding company, credit union, bank or bank holding company, insurance company or agency, any mortgage or loan broker or any other financial services entity or business that competes with the business of the Bank or its affiliates or has headquarters or offices within 10 miles of any office of the Bank.  Notwithstanding the foregoing, this non-competition restriction shall not apply if Executive’s employment is terminated following a Change in Control or if the Bank terminates the Executive for a reason other than Cause (as defined in this Agreement).

(c)             As used in this Agreement, “Confidential Information” means information belonging to the Bank which is of value to the Bank in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Bank. Confidential Information includes, without limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Bank. Confidential Information includes information developed by the Executive in the course of the Executive’s employment by the Bank, as well as other information to which the Executive may have access in connection with the Executive’s employment.  Confidential Information also includes the confidential information of others with which the Bank has a business relationship. Notwithstanding the foregoing, Confidential Information does not include information in the public domain.  The Executive understands and agrees that the Executive’s employment creates a relationship of confidence and trust between the Executive and the Bank with respect to all Confidential Information.  At all times, both during the Executive’s employment with the Bank and after its termination, the Executive will keep in confidence and trust all such Confidential Information, and will not use or disclose any such Confidential Information without the written consent of the Bank, except as may be necessary in the ordinary course of performing the Executive’s duties to the Bank.

 

(d)           Executive shall, upon reasonable notice, furnish such information and assistance to the Bank as may reasonably be required by the Bank, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between the Executive and the Bank or any of its subsidiaries or affiliates.

 

(e)           All payments and benefits to Executive under this Agreement shall be subject to Executive’s compliance with this Section 11.  The parties hereto, recognizing that irreparable injury will result to the Bank, its business and property in the event of Executive’s breach of this Section 11, agree that, in the event of any such breach by Executive, the Bank will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive and all persons acting for or with Executive. Executive represents and admits that Executive’s experience and capabilities are such that Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Bank, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.  Nothing herein will be construed as prohibiting the Bank or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of damages from Executive.

 

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12.           SOURCE OF PAYMENTS.

 

All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Bank. The Company may accede to this Agreement but only for the purposed of guaranteeing payment and provision of all amounts and benefits due hereunder to Executive.

 

13.           EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

 

This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement between the Bank or any predecessor of the Bank and Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to Executive of a kind elsewhere provided.  No provision of this Agreement shall be interpreted to mean that Executive is subject to receiving fewer benefits than those available to him without reference to this Agreement.

 

14.           NO ATTACHMENT; BINDING ON SUCCESSORS.

 

(a)           Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and of no effect.

 

(b)           This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bank and their respective successors and assigns.

 

15.           MODIFICATION AND WAIVER.

 

(a)           This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

 

(b)           No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other than that specifically waived.

 

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16.           REQUIRED PROVISIONS.

 

(a)           The Bank may terminate Executive’s employment at any time, but any termination by the Board other than termination for Cause shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after termination for Cause.

 

(b)           If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) [12 USC §1818(e)(3)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act, the Bank’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may in its discretion (i) pay Executive all or part of the compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

 

(c)           If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) [12 USC §1818(e)(4)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

 

(d)           If the Bank is in default as defined in Section 3(x)(1) [12 USC §1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank under this Agreement shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

 

(e)           All obligations under this Agreement shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, (i) by either the Office of the Comptroller of the Currency or the Board of Governors of the Federal Reserve System (collectively, the “Regulator”) or his or her designee, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) [12 USC §1823(c)] of the Federal Deposit Insurance Act; or (ii) by the Regulator or his or her designee at the time the Regulator or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Regulator to be in an unsafe or unsound condition.  Any rights of the parties that have already vested, however, shall not be affected by such action.

 

(f)           Notwithstanding anything herein contained to the contrary, any payments to Executive by the Bank or the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.

 

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17.           SEVERABILITY.

 

If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.

 

18.           HEADINGS FOR REFERENCE ONLY.

 

The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

 

19.           GOVERNING LAW.

 

This Agreement shall be governed by the laws of the State of Ohio except to the extent superseded by federal law.

 

20.           ARBITRATION.

 

Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil litigation and without any trial by jury to resolve such claims, conducted by a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the main office of the Bank, in accordance with the rules of the American Arbitration Bank’s National Rules for the Resolution of Employment Disputes (“National Rules”) then in effect.  One arbitrator shall be selected by Executive, one arbitrator shall be selected by the Bank and the third arbitrator shall be selected by the arbitrators selected by the parties.  If the arbitrators are unable to agree within fifteen (15) days upon a third arbitrator, the arbitrator shall be appointed for them from a panel of arbitrators selected in accordance with the National Rules.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

 

21.           INDEMNIFICATION.

 

(a)           Executive shall be provided with coverage under a standard directors’ and officers’ liability insurance policy, and shall be indemnified for the term of this Agreement and for a period of six years thereafter to the fullest extent permitted under applicable law against all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having been a director or officer of the Bank or any affiliate (whether or not he continues to be a director or officer at the time of incurring such expenses or liabilities), such expenses and liabilities to include, but not be limited to, judgments, court costs and attorneys’ fees and the cost of reasonable settlements (such settlements must be approved by the Board), provided, however, Executive shall not be indemnified or reimbursed for legal expenses or liabilities incurred in connection with an action, suit or proceeding arising from any illegal or fraudulent act committed by Executive.  Any such indemnification shall be made consistent with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and the regulations issued thereunder in 12 C.F.R. Part 359.

 

(b)           Any indemnification by the Bank shall be subject to compliance with any applicable regulations of the Federal Deposit Insurance Corporation.

 

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22.           NOTICE.

 

For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

	 	 
	
To the Bank:

	
Chairman of the Board

Mt. Washington Savings Bank

2110 Beechmont Avenue

Cincinnati, Ohio 45230

 

	
 

To Executive:

 

	
 

At the address last appearing on

the personnel records of the Bank

 

 

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IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be executed by their duly authorized representatives, and Executive has signed this Agreement, on the date first above written.

 

	 	
MT. WASHINGTON SAVINGS BANK

	 
	 	 	 	 
	
 

	
By: 

	 /s/ Bernard G. Buerger	 
	 	 	Chairman of the Board	 
	 	 	 	 

	 	
MW BANCORP, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Bernard G. Buerger	 
	 	 	Chairman of the Board	 
	 	 	 	 

	 	
EXECUTIVE:

	 
	
 

	
 

	 /s/ Gregory P. Niesen	 
	 	 	 	 

 

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