Document:

Exhibit 4.3

 

EXECUTION VERSION

 

CALIFORNIA RESOURCES CORPORATION LONG-TERM INCENTIVE PLAN

 

1.                                      PURPOSE

 

The purposes of this Plan are (i) to furnish a significant incentive to the employees, consultants and non-employee Directors of the Company and its Affiliates by making available to them the benefits of increased ownership of Shares, (ii) to promote the alignment of the interests of employees, consultants and non-employee Directors of the Company and its Affiliates on the one hand and stockholders on the other hand and (iii) to assist in the recruitment and retention of employees, consultants and non-employee Directors of the Company and its Affiliates.

 

2.                                      DEFINITIONS

 

“Affiliate” means any corporation, partnership, limited liability company or partnership, association, trust, or other organization which, directly or indirectly, controls, is controlled by, or is under common control with, the Company.  For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization or (ii) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise.

 

“Board” means the Board of Directors of the Company.

 

“Business Combination” means a merger, consolidation, or other reorganization, with or into, or the sale of all or substantially all of the Company’s business and/or assets as an entirety to, one or more entities that are not Affiliates.

 

“Change in Control” means the occurrence of any of the following events:

 

(a)                                 Approval by the stockholders of the Company of the dissolution or liquidation of the Company, other than in the context of a transaction that does not constitute a Change in Control under clause (b) below;

 

(b)                                 Consummation of a Business Combination, unless (1) as a result of the Business Combination, more than 50 percent of the outstanding voting power of the Successor Entity immediately after the reorganization is, or will be, owned, directly or indirectly, by persons who were holders of the Company’s voting securities immediately before the Business Combination; (2) no “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), excluding the Successor Entity or an Excluded Person, beneficially owns, directly or indirectly, more than 30 percent of the outstanding shares or the combined voting power of the outstanding voting securities of the Successor Entity, after giving effect to the Business Combination, except to the extent that such ownership existed prior to the Business Combination; and (3) at least 50 percent of the members of the board of directors of the entity resulting from the Business Combination were Directors at the time of the execution of the initial agreement or of the action of the Board approving the Business Combination;

 

(c)                                  Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any Excluded Person) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company’s then outstanding voting securities, other than as a result of (1) an acquisition directly from the Company; (2) an acquisition by the Company; or (3) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or a Successor Entity; or

 

 

(d)                                 During any period not longer than two consecutive years and beginning no earlier than the Effective Date, individuals who at the beginning of such period constituted the Board cease to constitute at least a majority thereof, unless the election, or the nomination for election by the Company’s stockholders, of each new Director was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who were Directors at the beginning of such period (including for these purposes, new members whose election or nomination was so approved), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.

 

Notwithstanding the foregoing, (i) if a Change in Control constitutes a payment event with respect to any award that provides for the deferral of compensation and is subject to the Nonqualified Deferred Compensation Rules, then the transaction or event described in subsection (a), (b), (c) or (d) above with respect to such award must also constitute a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5), and as relates to the holder of such award, to the extent required to comply with the Nonqualified Deferred Compensation Rules and (ii) in no event shall the separation of the Company from Occidental be a Change in Control.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Committee” means the committee appointed by the Board to administer the Plan, which shall be composed of not less than two members of the Board, each of whom shall be a “non-employee director” within the meaning of Rule 16b-3 and an “outside director” within the meaning of Section 162(m).   Notwithstanding the foregoing, for the period prior to the date the Company becomes a separate publicly-held corporation for purposes of Section 162(m), the “Committee” shall be the Executive Compensation Committee of the Board of Directors of Occidental Petroleum Corporation.

 

“Company” means California Resources Corporation, a Delaware corporation.

 

“Covered Employee” means an Eligible Person who is a Covered Employee as specified in Section 5.2 of this Plan.

 

“Director” means a member of the Board who is not an employee of the Company or an Affiliate.

 

“Disability” means permanent and total disability as defined in Section 22(e)(3) of the Code.

 

“Effective Date” means the date this Plan is approved by OXY USA Inc., in its capacity as the sole stockholder of the Company.

 

“Eligible Person” means any person who is an officer, employee or consultant of the Company or any Affiliate and any person who is a non-employee Director; provided, however that an ISO may be granted only to an individual who is employed by the Company or any “parent corporation” or “subsidiary corporation” (as such terms are defined in Section 424 of the Code) of the Company at the time the ISO is granted.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

“Excluded Person” means Occidental, any employee benefit plan of the Company or Occidental and any trustee or other fiduciary holding securities under a Company or Occidental employee benefit plan or any person described in and satisfying the conditions of Rule 13d-1(b)(i) of the Exchange Act; provided, however, that Occidental, employee benefit plans of Occidental and trustees and fiduciaries holding securities under an Occidental employee benefit plan shall cease to be Excluded Persons at such time as Occidental distributes the approximately 19% of the Company’s outstanding common stock held by Occidental as contemplated in that certain Separation and Distribution Agreement dated as of November 25, 2014, between the Company and Occidental.

 

“Fair Market Value” means, as of any specified date, the closing price of the a Share, if the Shares are listed on a national stock exchange registered under Section 6(a) of the Exchange Act, reported on the stock exchange composite tape on that date (or such other reporting service approved by the Committee); or, if no closing

 

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price is reported on that date, on the last preceding date on which such closing price of the Share is so reported.  If the Shares are traded over the counter at the time a determination of its fair market value is required to be made hereunder, its fair market value shall be deemed to be equal to the average between the reported high and low or closing bid and asked prices of a Share on the most recent date on which Shares were publicly traded.  In the event Shares are not publicly traded at the time a determination of its value is required to be made hereunder, the determination of its fair market value shall be made by the Committee in such manner as it deems appropriate and as is consistent with the requirements of Section 409A of the Code.

 

“ISO” means an incentive stock option qualified under Section 422 of the Code.

 

“Nonqualified Deferred Compensation Rules” means the limitations or requirements of Section 409A of the Code and the guidance and regulations promulgated thereunder.

 

“Occidental” means Occidental Petroleum Corporation, a Delaware corporation, and its Affiliates.

 

“Performance-Based Award” means any Qualifying Option or award granted pursuant to Section 5.  The Committee may grant Performance-Based Awards intended to constitute Section 162(m) Awards or Performance-Based Awards not intended to constitute Section 162(m) Awards.

 

“Performance Goal” means a preestablished targeted level or levels of any one or more Performance Objectives.

 

“Performance Objectives” means those performance objectives described in Section 5.2.

 

“Plan” means this California Resources Corporation Long-Term Incentive Plan, as amended from time to time.

 

“Qualifying Options” mean options and stock appreciation rights granted with an exercise price not less than Fair Market Value on the date of grant.  Qualifying Options are intended to be Performance-Based Awards.

 

“Rule 16b-3” means Rule 16b-3 under Section 16 of the Exchange Act.

 

“Section 162(m)” means Section 162(m) of the Code and the applicable regulations and interpretations thereunder.

 

“Section 162(m) Award” means a Performance-Based Award intended to satisfy the requirements for “performance-based compensation” within the meaning of Section 162(m).

 

“Share Limit” means the maximum number of Shares, as adjusted, that may be delivered pursuant to all awards granted under this Plan.

 

“Shares” mean the Company’s Common Stock, par value $0.01 per share.

 

“Substitute Award” means an award granted in substitution for similar awards held by individuals who become Eligible Persons as a result of a merger, consolidation, acquisition or other transaction by the Company or an Affiliate with or of another entity or the assets of another entity.

 

“Successor Entity” means the surviving or resulting entity or a parent thereof of a Business Combination.

 

3.                                      SHARES SUBJECT TO PLAN

 

3.1                               AGGREGATE SHARE LIMIT - Subject to adjustment as provided in or pursuant to this Section 3 or Section 7, (a) a total of 25,000,000 Shares shall be authorized for issuance pursuant to awards granted under this Plan and (b) the aggregate maximum number of Shares that may be issued under this Plan through ISOs shall not

 

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exceed 25,000,000 (which amount shall be included within the total Share limit set forth in clause (a) of this sentence).

 

3.2                               INDIVIDUAL LIMIT - Subject to adjustment as provided in or pursuant to this Section 3 or Section 7, the maximum number of Shares that may be subject to options, stock appreciation rights or other awards (other than cash-based awards) granted under the Plan to any one individual during the ten-year period beginning on the Effective Date may not exceed 12,500,000 Shares.  The maximum amount of compensation that may be paid under all Performance-Based Awards denominated in cash (including the Fair Market Value of any Shares paid in satisfaction of such Performance-Based Awards) granted to any one individual during any calendar year may not exceed $20,000,000 (and any payment due with respect to such a Performance-Based Award shall be paid no later than 10 years after the date of grant of such Performance-Based Award).

 

3.3                               REISSUE OF AWARDS AND SHARES - Awards payable in cash or payable in cash or Shares, including restricted shares, that are forfeited, cancelled, or for any reason do not vest under this Plan, and Shares that are subject to awards that expire or for any reason are terminated, cancelled or fail to vest shall be available for subsequent awards under this Plan.  If an award under this Plan is or may be settled only in cash, such award need not be counted against any of the share limits under this Section 3, except as may be required to preserve the status of an award as “performance-based compensation” under Section 162(m).  Shares subject to options or stock appreciation rights that are exercised shall not be available for subsequent awards.  The following transactions involving Shares will not result in additional Shares becoming available for subsequent awards under this Plan:  (i) Shares tendered in payment of an option; (ii) Shares withheld for taxes; and (iii) Shares repurchased by the Company using option proceeds.

 

3.4                               SOURCE OF SHARES DELIVERED UNDER PLAN — The Shares to be offered pursuant to the grant of an award may (a) be authorized but unissued Shares, (b) Shares held in the treasury of the Company, or (c) previously issued Shares reacquired by the Company, including shares purchased on the open market.

 

4.                                      PLAN ADMINISTRATION

 

This Plan shall be administered by the Committee.

 

4.1                               POWERS OF THE COMMITTEE - Subject to the express provisions of this Plan, the Committee shall be authorized and empowered to do all things necessary or desirable in connection with the authorization of awards and the administration of this Plan within its delegated authority, including, without limitation, the authority to:

 

(a)                                 adopt, amend and rescind rules, regulations and procedures relating to this Plan and its administration or the awards granted under this Plan and determine the forms and terms of individual awards;

 

(b)                                 determine who is an Eligible Person and to which Eligible Persons, if any, awards will be granted under this Plan;

 

(c)                                  grant awards to Eligible Persons and determine the terms and conditions of such awards, including but not limited to the number and value of Shares issuable pursuant thereto, the times (subject to Section 5.5) at which and conditions upon which awards become exercisable or vest or shall expire or terminate, and (subject to applicable law) the consideration, if any, to be paid upon receipt, exercise or vesting of awards;

 

(d)                                 determine the date of grant of an award, which may be a designated date after but not before the date of the Committee’s action;

 

(e)                                  determine whether (subject to Section 7.2), and the extent to which, adjustments are required pursuant to Section 7 hereof;

 

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(f)                                   interpret and construe this Plan and terms and conditions of any award granted hereunder (including under any award agreement) and correct any defect therein, whether before or after the date set forth in Section 5;

 

(g)                                  determine the circumstances under which, consistent with the provisions of Section 8.2, any outstanding award may be amended and make any amendments thereto that the Committee determines are necessary or appropriate; and

 

(h)                                 acquire or settle rights under options, stock appreciation rights or other awards in cash, stock of equivalent value, or other consideration.

 

All authority granted herein shall remain in effect so long as any award remains outstanding under this Plan.  The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or any Affiliate, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan.  Members of the Committee and any officer or employee of the Company or any Affiliate acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.

 

4.2                               SPECIFIC COMMITTEE RESPONSIBILITY AND DISCRETION REGARDING AWARDS - Subject to the express provisions of this Plan, the Committee, in its sole and absolute discretion, shall determine all of the terms and conditions of each award granted under this Plan, which terms and conditions may include, subject to such limitations as the Committee may from time to time impose, among other things, provisions that:

 

(a)                                 permit the recipient of such award to pay the purchase price of the Shares or other property issuable pursuant to such award, or any applicable tax withholding obligation upon such issuance or in respect of such award or Shares, in whole or in part, by any one or more of the following:

 

(i)                                     cash, cash equivalent, or electronic funds transfer,

 

(ii)                                  the delivery of previously owned shares of capital stock of the Company (including shares acquired as or pursuant to awards) or other property,

 

(iii)                               a reduction in the amount of Shares or other property otherwise issuable pursuant to such award,

 

(iv)                              a cashless exercise, or

 

(v)                                 any other legal consideration the Committee deems appropriate;

 

(b)                                 are intended to qualify such award as an ISO;

 

(c)                                  accelerate the receipt of benefits pursuant to an award or adjust the exercisability, term (subject to other limits) or vesting schedule of any or all outstanding awards, adjust the number of Shares subject to any award, adjust the price of any or all outstanding awards or otherwise change previously imposed terms and conditions, pursuant to a termination of employment or an event referenced in Section 7 (in which case the Committee’s discretion shall be exercised in a manner consistent with Section 7) or in other circumstances or upon the occurrence of other events as deemed appropriate by the Committee, by amendment of an outstanding award, by substitution of an outstanding award, by waiver or by other legally valid means (which may result, among other changes, in a greater or lesser number of shares subject to the award, a shorter or longer vesting or exercise period, or, except as provided below, an exercise or purchase price that is higher or lower than the original or prior award), in each case subject to Sections 3 and 8.2; provided, however, that in no case (other than an adjustment contemplated by Section 7.2) shall the exercise price of any option or stock appreciation right be reduced by an amendment to the award or a

 

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cancellation and re-grant of the award to effect a repricing of the award to a price below the Fair Market Value of the underlying Shares on the grant date of the original option or stock appreciation right unless specific stockholder consent is obtained;

 

(d)                                 authorize (subject to Sections 7, 8, and 10) the conversion, succession or substitution of one or more outstanding awards upon the occurrence of an event of the type described in Section 7 or in other circumstances or upon the occurrence of other events as deemed appropriate by the Committee; and

 

(e)                                  determine the value of and acquire or otherwise settle awards upon termination of employment, upon such terms as the Committee (subject to Sections 7, 8 and 10) deems appropriate.

 

4.3                               DELEGATION - Subject to Section 4.5, the Board may delegate different levels of authority to different committees with administrative and grant authority under this Plan, provided that each designated committee granting any awards hereunder shall consist exclusively of a member or members of the Board.  A majority of the members of the acting committee shall constitute a quorum.  The vote of a majority of the members present assuming the presence of a quorum or the unanimous written consent of the Committee shall constitute action by the committee.  The Committee may delegate authority to grant awards under this Plan for new employees to an officer of the Company who is also a director and may delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Company or a subsidiary or to third parties.  Notwithstanding the foregoing, no such delegation pursuant to this Section 4.3 shall be made to the extent that such delegation would result in the loss of an exemption under Rule 16b-3(d)(1) for awards granted to Eligible Persons subject to Section 16 of the Exchange Act in respect of the Company and will not cause Performance-Based Awards intended to qualify as “performance-based compensation” under Section 162(m) to fail to so qualify.

 

4.4                               BIFURCATION - Notwithstanding anything to the contrary in this Plan, the provisions of this Plan may at any time be bifurcated by the Board or the Committee in any manner so that provisions of any award agreement (or this Plan) intended or required in order to satisfy the applicable requirements of Rule 16b-3, Section 162(m) or other applicable law, to the extent permitted thereby, are applicable only to persons subject to those provisions and to those awards to those persons intended to satisfy the requirements of the applicable legal restriction.

 

4.5                               AWARDS TO NON-EMPLOYEE DIRECTORS - Notwithstanding any provision in this Plan to the contrary and without being subject to management discretion, the Board, acting through the non-employee Directors only, shall have the authority, in its sole and absolute discretion, to select non-employee Directors to receive awards other than ISOs under this Plan.  The Board, acting through the non-employee Directors only shall set the terms of any such awards in its sole and absolute discretion, and the Board, acting through the non-employee Directors only, shall be responsible for administering and construing such awards in substantially the same manner that the Committee administers and construes awards to other Eligible Persons.

 

5.                                      AWARDS

 

5.1                               TYPE AND FORM OF AWARDS - All awards shall be evidenced in writing (including electronic form), substantially in the form approved by the Committee or its delegate.  The types of awards that the Committee may grant include, but are not limited to, any of the following, on an immediate or deferred basis, either singly, or in tandem or in combination with or in substitution for, other awards of the same or another type:  (i) Shares, (ii) options (ISOs or nonqualified stock options), stock appreciation rights (including limited stock appreciation rights), restricted stock, stock units, or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the Shares, upon the passage of time, the occurrence of one or more events, or the satisfaction of Performance Goals or other conditions, or any combination thereof, (iii) any similar securities with a value derived from the value of or related to the Shares or other securities of the Company and/or returns thereon, or (iv) cash.  Share-based awards may include (without limitation) stock options, stock purchase rights, stock bonuses, stock units, stock appreciation rights, limited stock appreciation rights, phantom stock, dividend equivalents (independently or in tandem with any form of stock grant), dividend rights (independently or in tandem with any form of stock grant), Shares, any of which may be payable in Shares or cash, and may consist of one or more of such features in any combination, as determined by the Committee.

 

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5.2                               PERFORMANCE-BASED AWARDS -

 

5.2.1                     Performance Conditions - The right of a participant to exercise or receive a grant or settlement of any type of award listed in Section 5.1, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee.  The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any award subject to performance conditions, except as limited under Section 5.2.2 in the case of a Performance-Based Award intended to qualify under Section 162(m).

 

5.2.2                     Performance-Based Awards Granted to Designated Covered Employees - If the Committee determines that a Performance-Based Award to be granted to an Eligible Person who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Section 162(m), the grant, exercise and/or settlement of such Performance-Based Award may be contingent upon achievement of pre-established Performance Goals and other terms set forth in this Section 5.2.2.

 

(a)                                 Performance Goals Generally.  The Performance Goals for such Performance-Based Awards shall consist of one or more business criteria or individual performance criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 5.2.2, which level may also be expressed in terms of a specified increase or decrease in the particular criteria compared to a past period.  Performance Goals shall be objective and shall otherwise meet the requirements of Section 162(m), including the requirement that the level or levels of performance targeted by the Committee result in the achievement of Performance Goals being “substantially uncertain” at the time the Committee actually establishes the Performance Goal or Goals.  The Committee may determine that such Performance-Based Awards shall be granted, exercised and/or settled upon achievement of any one Performance Goal or that two or more of the Performance Goals must be achieved as a condition to grant, exercise and/or settlement of such Performance-Based Awards.  Performance Goals may differ for Performance-Based Awards granted to any one participant or to different participants.

 

(b)                                 Business and Individual Performance Criteria.

 

(i)                                     Business Criteria.  Means any one or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or business or geographical units of the Company (except with respect to the total stockholder return (TSR) and earnings per share (EPS) criteria): (A) accounts receivable to day sales outstanding, (B) accounts receivable to sales, services and/or other income, (C) debt, (D) debt to debt plus stockholder equity, (E) debt to earnings before interest expense and taxes (EBIT) or earnings before interest expense, taxes, depreciation and amortization (EBITDA), (F) EBIT, (G) EBITDA, (H) EPS, (I) economic value added, (J) expense reduction or improvement, (K) interest coverage, (L) inventory to sales, (M) inventory turns, (N) net income, (O) operating cash flow,(P) pre-tax margin, (Q) return on assets, (R) return on capital employed, (S) return on equity, (T) sales, (U) stock price appreciation, (V) TSR, (W) operational measures such as changes in proved reserves, production goals, drilling costs, lifting costs, exploration costs, environmental compliance, safety and accident rates, (X) mix of oil and natural gas production or reserves; (Y) finding and development costs; (Z) recycling ratios; (AA) reserve growth, (BB) additions or revisions; (CC) captured prospects; (DD) lease operating expense; (EE) captured net risked resource potential, in each case, as determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable companies.  These terms are used as applied under generally accepted accounting principles (if applicable) and in the Company’s financial reporting.  In addition, subject to any limitations under Section 162(m), such performance measures may be subject to adjustment by the Committee for changes in accounting

 

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principles, to satisfy regulatory requirements and other specified significant extraordinary items or events.

 

(ii)                                  Individual Performance Criteria.  The grant, exercise and/or settlement of Performance-Based Awards may also be contingent upon individual performance goals established by the Committee.  If required for compliance with Section 162(m), such criteria shall be approved by the stockholders of the Company.

 

(c)                                  Performance Period; Timing for Establishing Performance Goals.  Achievement of Performance Goals in respect of such Performance-Based Awards shall be measured over a performance period of up to ten years, as specified by the Committee.  Performance Goals shall be established not later than 90 days after the beginning of any performance period applicable to such Performance-Based Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m).

 

(d)                                 Performance-Based Award Pool.  The Committee may establish a Performance-Based Award pool, which shall be an unfunded pool, for purposes of measuring performance of the Company in connection with Performance-Based Awards.  The amount of such Performance-Based Award pool shall be based upon the achievement of a Performance Goal or Goals based on one or more of the criteria set forth in Section 5.2.2(b)(i) during the given performance period, as specified by the Committee in accordance with this Section 5.2.2.  The Committee may specify the amount of the Performance-Based Award pool as a percentage of any of such criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such criteria.

 

(e)                                  Settlement of Performance-Based Awards; Other Terms.  After the end of each performance period, the Committee shall certify the amount, if any, of (A) the Performance-Based Award pool, and the maximum amount of the potential Performance-Based Award payable to each Participant in the Performance-Based Award pool, or (B) the amount of the potential Performance-Based Award otherwise payable to each Participant.  Settlement of such Performance-Based Awards shall be in cash, Stock, other awards or other property, in the discretion of the Committee.  The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance-Based Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance-Based Award subject to this Section 5.2.2.  The Committee shall specify the circumstances in which such Performance-Based Awards shall be paid or forfeited in the event of termination of employment by the participant prior to the end of a performance period or settlement of Performance-Based Awards.

 

(f)                                   Written Determinations.  All determinations by the Committee as to the establishment of Performance Goals, the amount of any Performance-Based Award pool or potential individual Performance-Based Awards and as to the achievement of Performance Goals relating to and final settlement of Performance-Based Awards under this Section 5.2.2 shall be certified in writing in the case of any award intended to qualify as a Section 162(m) Award.  The Committee may not delegate any responsibility relating to such Performance-Based Awards.

 

(g)                                  Status of Performance-Based Awards under Section 162(m).  It is the intent of the Company that Performance-Based Awards under Section 5.2.2 granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Section 162(m) shall, if so designated by the Committee, constitute qualified “performance-based compensation” within the meaning of Section 162(m).  Accordingly, the terms of this Section 5.2, including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Section 162(m).  The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Eligible Person will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of a Performance-Based Award, who is likely to be a Covered Employee with respect to that fiscal year.  If any

 

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provision of this Plan or any agreement relating to such Performance-Based Awards that are designated as intended to comply with Section 162(m) does not comply or is inconsistent with the requirements of Section 162(m), such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

 

5.3                               CONSIDERATION FOR SHARES - Shares may be issued pursuant to an award for any lawful consideration as determined by the Committee, including, without limitation, services rendered by the recipient of such award, but shall not be issued for less than the minimum lawful consideration.  Awards may be payable in cash, stock or other consideration or any combination thereof, as the Committee shall designate in or (except as required by Section 5.2) by amendment to the terms and conditions governing such award.

 

5.4                               LIMITED RIGHTS - Except as otherwise expressly authorized by the Committee or this Plan or in the applicable award terms and conditions, a participant will not be entitled to any privilege of stock ownership as to any Shares not actually delivered to and held of record by the participant.  No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery.

 

5.5                               OPTION/STOCK APPRECIATION RIGHT PRICING AND TERM LIMITS - The purchase price per share of the Shares covered by any option or the base price of any stock appreciation right shall be determined by the Committee at the time of the grant, but, except in the case of a Substitute Award, shall not be less than 100 percent of the Fair Market Value of a Share on the date of grant.  No option or stock appreciation right shall be exercisable after the expiration of 10 years from the date of grant.  An award may be converted or convertible, notwithstanding the foregoing limits, into or payable in, Shares or another award that otherwise satisfies the requirements of this Plan.

 

5.6                               SPECIAL LIMITATIONS RELATING TO ISOS - An ISO may be granted only to an individual who is employed by the Company or any “parent corporation” or “subsidiary corporation” (as such terms are defined in Section 424 of the Code) of the Company at the time the ISO is granted.  To the extent that the aggregate fair market value (determined at the time the respective ISO is granted) of stock with respect to which ISOs are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of the Company and its parent and subsidiary corporations, within the meaning of Section 424 of the Code, exceeds $100,000 or such other amount as may be prescribed under Section 422 of the Code or applicable regulations or rulings from time to time, such ISOs shall be treated as options that do not constitute ISOs.  The Committee shall determine, in accordance with applicable provisions of the Code, Treasury regulations, and other administrative pronouncements, which of a participant’s ISOs will not constitute ISOs because of such limitation and shall notify the participant of such determination as soon as practicable after such determination.  No ISO shall be granted to an individual if, at the time the option is granted, such individual owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its parent or subsidiary corporation, within the meaning of Section 422(b)(6) of the Code, unless (i) at the time such option is granted, the option price is at least 110% of the Fair Market Value of a Share and (ii) such option by its terms is not exercisable after the expiration of five years from the date of grant.  Except as otherwise provided in Sections 421 or 422 of the Code, an ISO shall not be transferable otherwise than by will or the laws of descent and distribution and shall be exercisable during the participant’s lifetime only by such participant or the participant’s guardian or legal representative.

 

5.7                               TRANSFER RESTRICTIONS - Unless otherwise expressly provided in or permitted by this Section 5.7, by applicable law or by the award terms and conditions (i) all awards are nontransferable and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge; (ii) awards shall be exercised only by the holder; and (iii) amounts payable or shares issuable pursuant to an award shall be delivered only to (or for the account of) the holder.

 

5.7.1                     Exceptions by Committee Action - The Committee, in its sole discretion, may permit an award to be transferred for estate and/or tax planning purposes and on a basis consistent with the Company’s lawful issue of securities and the incentive purposes of the award and this Plan. Notwithstanding the foregoing, awards intended as ISOs or restricted stock awards for purposes of the Code shall be subject to any and all additional transfer restrictions necessary to preserve their status as ISOs or restricted shares, as the case may be, under the Code.

 

9

 

5.7.2                     Exclusions - The exercise and transfer restrictions in this Section 5.7 shall not apply to:

 

(a)                                 transfers to the Company,

 

(b)                                 the designation of a beneficiary to receive benefits in the event of the participant’s death or, if the participant has died, transfers to or exercise by the participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution,

 

(c)                                  transfers pursuant to a domestic relations order (if approved or ratified by the Committee), if (in the case of ISOs) permitted by the Code,

 

(d)                                 if the participant has suffered a Disability, permitted transfers to or exercises on behalf of the holder by his or her legal representative, or

 

(e)                                  the authorization by the Committee of “cashless exercise” procedures with third parties who finance or who otherwise facilitate the exercise of awards consistent with applicable laws and the express authorization of the Committee.

 

5.8                               TAX WITHHOLDING - The Company and any of its Affiliates are authorized to withhold from any award granted, or any payment relating to an award under this Plan, including from a distribution of Shares, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an award, and to take such other action as the Committee may deem advisable to enable the Company, its Affiliates and participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any award.  This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a participant’s tax obligations, either on a mandatory or elective basis in the discretion of the Committee.  Notwithstanding the foregoing, the Company and its Affiliates may, in their sole discretion and in satisfaction of the foregoing requirement, withhold or permit the participant to elect to have the Company or its Affiliate withhold a sufficient number of Shares that are otherwise issuable to the participant pursuant to an award (or allow the surrender of Shares by the participant to the Company or its Affiliate).  The number of Shares that may be so withheld or surrendered shall be limited to the number of Shares that have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the applicable minimum statutory withholding rates for U.S. federal, state, local or non-U.S. income and social insurance taxes and payroll taxes, as determined by the Committee.

 

5.9                               CASH AWARDS - The Committee shall have the express authority to pay awards in cash under this Plan, whether in lieu of, in addition to or as part of another award.

 

5.10                        TERMINATION OF EMPLOYMENT OR SERVICE - If an Eligible Person’s employment with or service to the Company or to any Affiliate terminates for any reason, his or her outstanding awards may thereafter be exercised (if at all) to the extent provided in the agreement evidencing such award, or as otherwise determined by the Committee.

 

6.                                     TERM OF PLAN

 

No award shall be granted under this Plan after the tenth anniversary of the Effective Date.  After that date, this Plan shall continue in effect as to then outstanding awards.  Any then outstanding award may be amended thereafter in any manner that would have been permitted earlier, except that no such amendment shall increase the number of Shares subject to, comprising or referenced in the award or reduce the exercise or base price of an option or stock appreciation right or permit cash payments in an amount that exceeds the limits of Section 3 (as adjusted pursuant to Section 7.2).

 

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7.                                      ADJUSTMENTS; CHANGE IN CONTROL

 

7.1                               CHANGE IN CONTROL; ACCELERATION AND TERMINATION OF AWARDS - Unless prior to a Change in Control, the Committee determines that, upon its occurrence, benefits under any or all awards will not accelerate or determines that only certain or limited benefits under any or all awards will be accelerated and the extent to which they will be accelerated, or establishes a different time in respect of such Change in Control for such acceleration, then upon the occurrence of a Change in Control:

 

(a)                                 each option and stock appreciation right shall become immediately exercisable,

 

(b)                                 restricted stock shall immediately vest free of restrictions,

 

(c)                                  each award under Section 5.2 shall become payable to the participant,

 

(d)                                 the number of Shares covered by each stock unit account shall be issued to the participant, and

 

(e)                                  any other rights of a participant under any other award will be accelerated to give the participant the benefit intended under any such award.

 

The Committee may override the limitations on acceleration in this Section 7.1 and may accord any Eligible Person a right to refuse any acceleration, whether pursuant to the award agreement or otherwise, in such circumstances as the Committee may approve. Any acceleration of awards shall comply with applicable legal and regulatory requirements, including the Nonqualified Deferred Compensation Rules. Without limiting the generality of the foregoing, the Committee may deem an acceleration to occur immediately prior to or up to 30 days before the applicable event and/or reinstate the original terms of an award if an event giving rise to an acceleration does not occur.

 

If any option or other right to acquire Shares under this Plan has been fully accelerated as required or permitted by this Plan but is not exercised prior to (i) a dissolution of the Company, or (ii) an event described in this Section 7.1 that the Company does not survive, or (iii) the consummation of a Change in Control approved by the Board, such option or right will terminate, subject to any provision that has been expressly made by the Committee or the Board through a plan of reorganization approved by the Board or otherwise for the survival, substitution, assumption, exchange or other settlement of such option or right.

 

7.2                               ADJUSTMENTS —

 

7.2.1                     ADJUSTMENTS GENERALLY. The following provisions will apply if any extraordinary dividend or other extraordinary distribution occurs in respect of the Shares (whether in the form of cash, Shares, other securities, or other property), or any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, repurchase, or exchange of Shares or other securities of the Company, or any similar, unusual or extraordinary corporate transaction (or event in respect of the Shares) or a sale of substantially all the assets of the Company as an entirety occurs. The Committee will, in such manner and to such extent (if any) as it deems appropriate and equitable:

 

(a)                                 proportionately adjust any or all of (i) the number and type of Shares (or other securities) that thereafter may be made the subject of awards (including the specific maxima and numbers of shares set forth elsewhere in this Plan and the individual award limitations set forth in Section 3), (ii) the number, amount and type of shares (or other securities or property) subject to any or all outstanding awards, (iii) the grant, purchase, or exercise price of any or all outstanding awards, (iv) the securities, cash or other property deliverable upon exercise of any outstanding awards, or (v) the Performance Goals or Performance Objectives appropriate to any outstanding awards, or

 

(b)                                 in the case of an extraordinary dividend or other distribution, recapitalization, reclassification, merger, reorganization, consolidation, combination, sale of assets, split-up, exchange, or spin-off, make

 

11

 

provision for a cash payment or for the substitution or exchange of any or all outstanding awards or the cash, securities or property deliverable to the holder of any or all outstanding awards based upon the distribution or consideration payable to holders of the Shares of the Company upon or in respect of such event.

 

7.2.2                     EQUITY RESTRUCTURING - If the Company recapitalizes, reclassifies its capital stock or otherwise changes its capital structure or another change or event occurs that constitutes an “equity restructuring” pursuant to Accounting Standards Codification Topic 718, Compensation — Stock Compensation, or any successor accounting standard (a “recapitalization”), (a) the Committee shall equitably adjust the number and class of Shares (or other securities or property) covered by each outstanding award and the terms and conditions, including the exercise price and performance criteria (if any), of such award to equitably reflect such recapitalization and shall adjust the number and class of Shares (or other securities or property) with respect to which awards may be granted after such recapitalization and (b) the Committee shall make a corresponding and proportionate adjustment with respect to the maximum number of Shares (or other securities) that may be delivered with respect to awards under this Plan as provided in Section 3, the individual award limitations set forth in Section 3 and the class of Shares (or other securities) available for grant under this Plan.

 

8.                                      PLAN AMENDMENT AND TERMINATION

 

8.1                               AUTHORITY OF THE BOARD - Subject to Section 8.2, the Board may amend or terminate this Plan at any time and in any manner; provided, that, any such amendments shall be subject to the approval of the Company’s stockholders if such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted (and such approval shall be obtained in accordance with the requirements of such laws, regulations and rules).

 

8.2                               RESTRICTIONS - No amendment or termination of this Plan or change in or affecting any outstanding award shall deprive in any material respect the holder, without the consent of the holder, of any of his or her rights or benefits under or with respect to the award. Adjustments contemplated by Section 7 shall not be deemed to constitute a change requiring such consent.

 

9.                                      LEGAL MATTERS

 

9.1                               COMPLIANCE AND CHOICE OF LAW; SEVERABILITY - This Plan, the granting and vesting of awards under this Plan and the issuance and delivery of Shares and/or the payment of money under this Plan or under awards granted hereunder are subject to compliance with all applicable federal and state laws, rules and regulations and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith.  This Plan, the awards, all documents evidencing awards and all other related documents shall be governed by, and construed in accordance with the laws of the state of Delaware. If any provision shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.

 

9.2                               NO RIGHT TO AN AWARD - Neither the adoption of this Plan nor any action of the Board or of the Committee shall be deemed to give any individual any right to be granted an award or any other rights hereunder except as may be evidenced by an award agreement duly executed on behalf of the Company, and then only to the extent and on the terms and conditions expressly set forth therein.

 

9.3                               NON-EXCLUSIVITY OF PLAN - Nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Committee to grant awards or authorize any other compensation, with or without reference to the Shares, under any other plan or authority.

 

9.4                               NO EMPLOYMENT RIGHTS CONFERRED - Nothing contained in this Plan (or in any other documents relating to this Plan or to any award) shall confer upon any Eligible Person or other participant any right to continue in the employ or other service of the Company or any Affiliate or constitute any contract or agreement of

 

12

 

employment or other service, nor shall interfere in any way with the right of the Company or any Affiliate to change such person’s compensation or other benefits or to terminate the employment of such person, with or without cause.

 

10.                               MISCELLANEOUS

 

10.1                        UNFUNDED PLAN - Unless otherwise determined by the Committee, this Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. This Plan shall not establish any fiduciary relationship between the Company or any Affiliate and any participant or other person. To the extent any person holds any rights by virtue of awards granted under this Plan, such rights shall be no greater than the rights of an unsecured general creditor of the Company.

 

10.2                        AWARDS NOT COMPENSATION - Unless otherwise determined by the Committee, settlements of awards received by participants under this Plan shall not be deemed a part of a participant’s regular, recurring compensation for purposes of calculating payments or benefits from any Company benefit plan, severance program or severance pay law of any country.

 

10.3                        FRACTIONAL SHARES - The Company shall not be required to issue any fractional Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash.

 

10.4                        COMPLIANCE WITH SECURITIES LAWS - Nothing herein or in any award granted hereunder shall require the Company to issue any shares with respect to any award if that issuance would, in the opinion of counsel for the Company, constitute a violation of the Securities Act of 1933, as amended, or any similar or superseding statute or statutes, any other applicable statute or regulation, or the rules of any applicable securities exchange or securities association, as then in effect.

 

10.5                        CLAWBACK - To the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Board or Committee, awards and amounts paid or payable pursuant to or with respect to awards shall be subject to the provisions of any applicable clawback policies or procedures adopted by the Company, which clawback policies or procedures may provide for forfeiture, repurchase and/or recoupment of awards and amounts paid or payable pursuant to or with respect to awards.  Notwithstanding any provision of the Plan or any award agreement to the contrary, the Company reserves the right, without the consent of any participant or beneficiary of any award, to adopt any such clawback policies and procedures, including such policies and procedures applicable to the Plan or any award agreement with retroactive effect.

 

10.6                        SECTION 409A - In the event that any award granted pursuant to this Plan provides for a deferral of compensation within the meaning of the Nonqualified Deferred Compensation Rules, it is the general intention, but not the obligation, of the Company to design such award to comply with the Nonqualified Deferred Compensation Rules and such award should be interpreted accordingly.  Notwithstanding anything in this Plan to the contrary, to the extent that the Committee determines that any award under this Plan may be subject to the Nonqualified Deferred Compensation Rules, the Committee may, without a participant’s consent, adopt such amendments to this Plan and the applicable award agreement or take any other actions (including amendments and actions with retroactive effect), that the Committee, in its sole discretion, determines are necessary or appropriate to preserve the intended tax treatment of the award, including, without limitation, actions intended to (a) exempt such award from the Nonqualified Deferred Compensation Rules, or (b) comply with the requirements of the Nonqualified Deferred Compensation Rules; provided, however, that nothing in this Section 10.6 shall create any obligation on the part of the Company or any Affiliate to adopt any such amendment or take any other such action or any liability for any failure to do so. Notwithstanding anything herein to the contrary, in no event shall the Company or any Affiliate have any obligation to indemnify or otherwise compensate any participant for any taxes or interest imposed under the Nonqualified Deferred Compensation Rules or similar provisions of state or foreign law.

 

13EXHIBIT 10.2

 

WAYNE SAVINGS BANCSHARES, INC. /WAYNE SAVINGS
COMMUNITY BANK

EMPLOYMENT AGREEMENT

 

PRESIDENT AND CEO

 

 

This Employment Agreement
(Agreement) is made and entered into as of

November 3, 2014, by and between Wayne Savings Bancshares, Inc. (the Company), a Delaware corporation, with its principal
administrative office at 151 North Market Street, Wooster, Ohio, the Company’s wholly owned subsidiary, Wayne Savings
Community Bank (the Bank) and H. Stewart Fitz Gibbon III (the Executive). The Company and the Bank are sometimes referred
to collectively herein as the Wayne Savings Entities.

 

WHEREAS, the Company
agrees to employ Executive as the President and Chief Executive Officer of the Company and the Bank, subject to the authority and
direction of the Company’s Board of Directors, and Executive agrees to accept such employment subject to the terms and conditions
set forth herein; and

 

WHEREAS, the parties
acknowledge that, by virtue of Executive’s activities on behalf of the Wayne Savings Entities, Executive will be entrusted
with and will have access to certain Confidential Information (as hereinafter defined) related to the business and operations of
the Wayne Savings Entities, which constitutes a valuable, special and unique asset of the respective entities, and which is protected
by the Bank and the Company, respectively, in order to preserve their business, trade and goodwill; and

 

WHEREAS, the parties
desire to set forth their understanding as to such Confidential Information as an integral part of the terms and conditions of
Executive’s employment hereunder.

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

 

		1.	POSITION AND RESPONSIBILITIES

During the period
of his employment hereunder, Executive agrees to serve as President and Chief Executive Officer of the Company and of the Bank
(the "Executive Position"). As President and Chief Executive Officer, Executive agrees to serve under the direction of
the Company’s Board of Directors (“Board”) and to perform the usual and customary duties of the Executive Position
and any specific duties as may be prescribed by the Board from time to time.

 

		2.	TERMS AND DUTIES

(a) The Initial
Term of Executive’s employment under this Agreement shall begin on November 3, 2014, and shall continue until December 31,
2016, unless terminated earlier in accordance with the terms herein. This Agreement, if still in effect, shall be reviewed annually
thereafter by the Board, and may be renewed for successive one (1) year terms within the Board’s sole discretion. The respective
rights and obligations under Sections 4 and 10 hereof shall survive the expiration of this Agreement (including the Initial Term
and any renewal

    	 

    	 

    

terms hereof).

 

(b) During the term of
his employment hereunder, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves
of absence, Executive shall devote substantially all his business time, attention, skill, and efforts to the faithful performance
of his duties hereunder; provided, however, that, with the approval of the Board, as evidenced by a resolution of such Board, from
time to time, 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 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. For purposes of this Section 2(b),
Board approval shall be deemed provided as to service with any such business, companies or organizations that Executive is serving
currently as provided on Schedule 2(b) hereof.

 

		3.	COMPENSATION AND REIMBURSEMENT.

 

(a)               
The compensation specified under this Agreement shall constitute the salary and benefits paid
for the duties described herein. The Executive shall be paid a salary of not less than $190,000.00 per annum, prorated for any
partial year ("Base Salary") during the Initial Term hereof. Such Base Salary shall be payable biweekly. Executive's
Base Salary shall be reviewed on or before January 1, 2016, and at least annually thereafter so long as this Agreement and any
renewals thereof are in effect. Such review shall be conducted by a Committee designated by the Board. Base Salary shall include
any amounts of compensation deferred by Executive under qualified and nonqualified plans maintained by the Bank.

 

(b)              
During the Initial Term of this Agreement, Executive may be paid a discretionary bonus in
the sole discretion of the Board, at such times, and in such amounts, not to exceed $20,000 in the aggregate, as the Board may
determine, taking into consideration the overall performance and financial condition of the Bank, as well as specific criteria
established by the Board (“Discretionary Bonus”).

 

(c)       
The Bank will provide Executive with such employee benefit plans, arrangements and perquisites
as are generally provided by the Bank to its executive employees, and as are in effect from time to time. Without limiting the
generality of the foregoing provisions of this Subsection (c), Executive will be entitled to participate in or 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 plans, medical coverage or any other employee benefit plan or arrangement made available
by the Company or the Bank in the future to their senior executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and arrangements. In addition to the Discretionary Bonus, Executive
will be entitled to incentive compensation and bonuses as provided in any plan of the Bank or the Company in which Executive is
eligible to participate (and he shall be entitled to a pro rata distribution under any incentive compensation or bonus plan as
to any year in which a termination of employment occurs, other than termination for Cause). Nothing paid to the Executive under
any such plan or arrangement will be deemed to be in lieu of other compensation to which the Executive is entitled under this Agreement.

    	2

    	 

    

 

(d)        
 The Bank shall pay or reimburse Executive for all reasonable travel and other reasonable
expenses incurred by Executive in performing his obligations under this Agreement and may provide such additional compensation
in such form and such amounts as the Board may from time to time determine.

 

		4.	PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

(a)The
Wayne Savings Entities may terminate the Executive’s employment at any time during the Term with or without Cause. Upon the
occurrence of an Event of Termination (as herein defined) during the Executive's Initial Term of employment under
this Agreement or any renewal term thereof, the provisions of this Section 4 shall apply. As used in this Agreement, an "Event
of Termination" shall mean and include any one or more of the following: (i) termination by the Wayne Savings Entities of
Executive's full-time employment hereunder for any reason other than (A) termination for Cause (as defined in Section 8
hereof), (B) upon Retirement (as defined in Section 7 hereof), (C) Executive’s Disability (as set forth in Section 6 hereof)
or death; (ii) Executive's resignation from employment following (A) a material change imposed by the Wayne Savings Entities or
either of them in Executive's functions, duties, or responsibilities, which change would cause Executive's position to become one
of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1 above, to
which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement),
(B) a relocation by the Wayne Savings Entities or either of them of Executive's principal place of employment to a location more
than 30 miles outside the City of Wooster, or a material reduction in the benefits and perquisites, including Base Salary, to the
Executive from those being provided as of the effective date of this Agreement (except for any reduction that is part of
a Company-wide reduction in employee pay or benefits), (C) a liquidation or dissolution of the Bank or the Company, or (D) a material
breach of this Agreement by the Wayne Savings Entities or either of them; and (iii) the event specified in Section 4(b) hereof.
Upon the occurrence of any event described in clauses (ii) (A), (B), (C) or (D) above, Executive shall have the right to elect
to terminate his employment under this Agreement by resignation upon not less than thirty (30) days prior written notice given
within 90 days after the event giving rise to said right to elect, which termination by Executive shall be an Event of Termination.
No payments or benefits shall be due to Executive under this Agreement upon the termination of Executive's employment except as
provided in Sections 4, 5, 6 or 7 hereof.

 

(b)        
As used in this Agreement, an Event of Termination shall also mean and include involuntary
termination of the Executive by the Wayne Savings Entities or either of them without Cause, or, based upon the occurrence of one
or more of the events specified in clauses (ii) (A), (B), (C) or (D) of Section 4(a), voluntary resignation by the Executive on
the effective date of, or within 12 months after, a Change in Control. For these purposes, a Change in Control shall mean a change
in the ownership of the Company or the Bank, a change in the effective control of the Company or the Bank, or a change in the ownership
of a substantial portion of the assets of the Company or the Bank, in each case as provided under Section 409A of the Code and
the regulations thereunder. The Executive’s voluntary resignation under this Section 4(b) shall not

    	3

    	 

    

constitute an Event of Termination unless,
within 90 days after the initial existence of the condition specified in clauses (ii) (A), (B), (C) or (D) of Section 4(a), the
Executive gives notice of the existence of the condition or conditions to the Wayne Savings Entities, and unless the Wayne Savings
Entities fail to remedy the condition or conditions within 30 days after receiving such notice from the Executive. If the 90-day
notice period begins within 12 months after the Change in Control but, together with the 30-day cure period, extends past 12 months
after the Change in Control, the voluntary resignation shall nevertheless be considered any Event of Termination for purposes of
this Section 4(b).

 

(c)         
Upon the termination of Executive’s employment constituting a separation from service,
as defined in Code Section 409A, and resulting from an Event of Termination as defined in Section 4(a) or 4(b), provided that Executive
has signed and delivered to the Wayne Savings Entities a release agreement in form and substance acceptable to the Wayne Savings
Entities (“Release Agreement”) on or before the deadline set forth in the Release Agreement, which deadline shall not
be later than 60 days after the date of Executive’s termination, and further provided that Executive has not revoked the
Release Agreement within the deadline for revocation established by the Release Agreement, the Wayne Savings Entities, in accordance
with the time line set forth below, 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 (but not both), a lump sum cash amount (“Termination
Payment”) equal to, in the case of an Event of Termination as defined in Section 4(a), one (1) times the sum of, or, in the
case of an Event of Termination as defined in Section 4(b), two (2) times the sum of:

 

		(i)	The highest annual rate of Base Salary paid to Executive at any time
under this Agreement,

 

		(ii)	The greater of (x) the average annual cash bonus paid to Executive
with respect to the two completed fiscal years prior to the Event of Termination, or (y) the cash bonus paid to Executive with
respect to the fiscal year ended prior to the Event of Termination, and 

 

		(iii)	The value of the employer matching contributions made on Executive’s
behalf in the Wayne Savings 401(k) Retirement Plan, or any successor thereto, and the value of the employer contribution or allocation
made on Executive’s behalf in the Wayne Savings Community Bank Restated Employee Stock Ownership Plan, or any successor thereto,
in the calendar year preceding the year in which the Event of Termination occurs. 

 

If Executive is not a specified
employee as defined in Section 409A of the Internal Revenue Code and the rules promulgated thereunder (“Specified Employee”),
the Termination Payment shall be made no later than ninety (90) days following the termination of Executive’s employment;
provided, however, if the 90-day period following the date of the termination of Executive’s Employment ends in the year
after the year in which the termination of employment occurs, the Termination Payment shall be made on the 90th day
and shall not be made in the year in which the termination of employment occurs. Executive will not be permitted to specify the
year in which the Termination Payment will be made.

 

    	4

    	 

    

If Executive is a Specified
Employee, the Termination Payment shall be made on the first day of the seventh month following the termination of Executive’s
employment. The Termination Payment shall not be reduced in the event Executive obtains other employment following termination
of employment.

 

Despite anything to the
contrary in this Agreement, the Executive shall not be entitled to any severance benefits under Section 4 of this Agreement on
account of employment termination unless the Executive's employment termination constitutes a separation from service, as that
term is defined in Code Section 409A and the rules, regulations, and guidance of general application issued thereunder by the Department
of the Treasury.

(d)        
Upon the termination of Executive’s employment constituting a separation from service,
as defined in Code Section 409A, and resulting from an Event of Termination as defined in Section 4(a) or 4(b), if Executive elects
continuation coverage pursuant to section 4980B(f) of the Internal Revenue Code (“COBRA”), and, additionally, if, subsequent
to the expiration of COBRA coverage, Executive purchases an individual policy with coverage substantially comparable to the coverage
maintained by the Bank for all employees (hereinafter, individually or collectively, “Continuation Coverage”), provided
that Executive has timely signed and delivered the Release Agreement to the Company as specified in Section 4(c) above, and has
not thereafter revoked the Release Agreement, and further provided that neither the Bank nor any of its affiliates will incur any
penalty or additional tax for failing to comply with any applicable law, Executive shall be reimbursed in an amount equal to the
monthly premium paid by Executive for such Continuation Coverage, less any applicable tax withholdings (“Continuation Coverage
Reimbursement Payments”) for a period not to exceed twelve (12) months following the termination of Executive’s employment
in the case of an Event of Termination as defined in Section 4(a), or twenty-four (24) months in the case of an Event of Termination
as defined in Section 4(b) .

 

If Executive is not a Specified
Employee (as defined in Section 4(c) above), the monthly Continuation Coverage Reimbursement Payments shall commence no later than
ninety (90) days following the termination of Executive’s employment; provided, however, if the 90-day period following the
termination of Executive’s employment ends in the year after the year in which Executive’s employment termination occurs,
the monthly Continuation Coverage Reimbursement Payments shall commence on the 90th day and shall not be made in the
year in which employment termination occurs. Executive will not be permitted to specify the year in which the monthly Continuation
Coverage Reimbursement Payments will commence.

 

If Executive is a Specified
Employee, the Bank shall commence the monthly Continuation Coverage Reimbursement Payments on the first day of the seventh month
following the termination of Executive’s employment.

 

Regardless of when the
monthly Continuation Coverage Reimbursement Payments commence, the first such payment shall include the amount that the Executive
would have received to the date of such commencement if the Continuation Coverage Reimbursement Payments had commenced immediately
following the termination of Executive’s employment.

 

    	5

    	 

    

Notwithstanding the foregoing,
if the reimbursement of Executive’s Continuation Coverage payments hereunder would trigger the 20% tax and interest penalties
under Section 409A of the Code, then the Continuation Coverage Reimbursement Payments shall not be provided, and in lieu thereof,
Executive shall be paid a lump sum cash amount equal to the cost if the monthly Continuation Coverage Reimbursement Payments were
made, provided that doing so will not cause the Wayne Savings Entities or any of their affiliates to incur any penalty or additional
tax for failure to comply with any applicable law.

 

		5.	RESERVED.

 

		6.	DISABILITY.

(a)                 
Short-Term. In the event of Executive’s failure to substantially perform his duties hereunder on a full-time
basis for a period of not more than one hundred eighty (180) days due to incapacity resulting from physical or mental illness,
the Wayne Savings Entities will continue to pay Executive’s Base Salary during the period of such incapacity, but only in
the amounts and to the extent that disability benefits payable to the Executive under Wayne Savings Entities -sponsored insurance
policies are less than Executive’s Base Salary.

 

(b)Long-Term.
If Executive is incapacitated for a period of one hundred eighty (180) consecutive days so that he cannot perform his duties hereunder
on a full-time basis, Executive’s employment will terminate upon the expiration of such one hundred eighty (180) day period,
and Executive shall be entitled to receive all benefits payable as a result of the termination under the terms of the Wayne Savings
Entities’ employee benefit plans.

 

		7.	TERMINATION UPON RETIREMENT.

 

"Retirement"
shall mean Executive’s voluntary termination of employment for the stated purpose of retirement, at the normal and customary
retirement age, or in accordance with any retirement policy established with Executive's consent with respect to him. Upon termination
of Executive’s employment due to Retirement, no amounts or benefits shall be due Executive under this Agreement and the Executive
shall be entitled to all benefits under any retirement plan of the Wayne Savings Entities and other plans to which Executive is
a party.

 

		8.	TERMINATION FOR CAUSE.

The term
"Termination for Cause" shall mean termination because of the Executive's personal dishonesty, incompetence, willful
misconduct, any breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, gross negligence
in the performance of duties, willful violation of any law, rule, or regulation (other than minor traffic violations or similar
offenses) or final cease-and-desist order, commission of an act of moral turpitude, engagement in activities or conduct injurious
to the reputation of the Wayne Savings Entities or either of them, material breach of any provision of this Agreement, or continued
failure and/or refusal to correct any performance deficiencies within fifteen (15) days following receipt by the Executive of written
notice from the Board of such deficiencies. Notwithstanding the

    	6

    	 

    

foregoing, Executive shall
not be deemed to have been Terminated for Cause unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the members of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to Executive and an opportunity for him, together with counsel, to be heard before
the Board), finding that in the good faith opinion of the Board, Executive was guilty of conduct justifying Termination for Cause
as defined herein, and specifying the particulars thereof in detail. The Executive shall not have the right to receive compensation
or other benefits for any period after Termination for Cause (other than any vested stock options, vested restricted stock or vested
benefits under any tax qualified or non-qualified employee benefit plan). Any non-vested stock options or restricted stock granted
to Executive under any stock option plan or restricted stock plan of the Company or any subsidiary or affiliate thereof, shall
become null and void effective upon Executive's receipt of Notice of Termination for Cause pursuant to Section 9 hereof, and any
non-vested stock options shall not be exercisable by Executive at any time subsequent to such Termination for Cause, (unless it
is determined in arbitration that grounds for termination of Executive for Cause did not exist, in which event all terms of the
options or restricted stock as of the date of termination shall apply, and any time periods for exercising such options shall commence
from the date of resolution in arbitration).

 

		9.	NOTICE.

 

(a) Any purported termination
for Cause shall be communicated by Notice of Termination to the Executive. For purposes of this Agreement, a "Notice of Termination"
shall mean a written notice which 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. If, within thirty (30) days after any Notice of Termination for Cause is given, the Executive notifies
the Bank or the Company that a dispute exists concerning the termination, the parties shall promptly proceed to arbitration, if
applicable under Section 19 of this Agreement. Notwithstanding the pendency of any such dispute, the Bank and the Company may discontinue
to pay Executive 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 of this Agreement, the payment of such compensation
and benefits by the Bank and Company 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).

 

(b) Any other purported
termination by the Wayne Savings Entities or by Executive shall be communicated by a Notice of Termination to the other party.
For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in detail the facts and circumstances claimed to provide
a basis for termination of employment under the provision so indicated. "Date of Termination" shall mean the date of
the Notice of Termination. 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 if applicable, as provided in Section 19 of this Agreement. Notwithstanding the pendency of any such dispute, the Wayne
Savings Entities shall

    	7

    	 

    

continue to pay the 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). In the event of the voluntary termination by the Executive of his employment, which is disputed by the Wayne
Savings Entities, and if it is determined in arbitration, if applicable, or otherwise by a court of competent jurisdiction that
Executive is not entitled to termination benefits pursuant to this Agreement, he shall return all cash payments made to him pending
resolution, with interest thereon at the prime rate as published in the Wall Street Journal from time to time if it is determined
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.

 

		10.	POST-TERMINATION OBLIGATIONS.

 

(a)All payments and
benefits to Executive under this Agreement shall be subject to Executive's compliance with paragraph (b) of this Section 10 during
the Initial Term of this Agreement or any renewal term thereof, and for one (1) full year after the expiration or termination hereof.

 

(b)Executive shall,
upon reasonable notice, furnish such information and assistance to the Wayne Savings Entities as may reasonably be required by
the Wayne Savings Entities in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become,
a party.

 

(c) Executive recognizes
and acknowledges that the knowledge of the business activities and plans for business activities of the Wayne Savings Entities
and affiliates thereof, as they may exist from time to time, is a valuable, special and unique asset of the business of the Wayne
Savings Entities. Executive will not, during or after the term of his employment, use or disclose to any person, firm, corporation,
or other entity for any reason or purpose whatsoever (except for such disclosure as may be required to be provided to the
Federal Deposit Insurance Corporation (the "FDIC"), or other federal banking agency with jurisdiction over the Bank or
Executive), any knowledge of the past, present, planned or considered business activities of the Wayne Savings Entities or affiliates
thereof or any Confidential Information. For purposes of this Agreement, Confidential Information shall mean all information or
knowledge belonging to, used by, or which is in the possession of the Wayne Savings Entities relating to the Wayne Savings Entities’
business, business plans, strategies, pricing, sales methods, customers (including, without limitation, the names, addresses or
telephone numbers of such customers), technology, programs, finances, costs, employees (including, without limitation, the names,
addresses or telephone numbers of any employees), employee compensation rates or policies, marketing plans, development plans,
computer programs, computer systems, inventions, developments, trade secrets, know how or confidences of the Wayne Savings Entities
or the Wayne Savings Entities’ business, without regard to whether any of such Confidential Information may be deemed confidential
or material to any third party, and the Wayne Savings Entities and the Executive hereby stipulate to the confidentiality and materiality
of all such Confidential Information. The Executive acknowledges that all of the Confidential Information is and shall continue
to be the exclusive proprietary property of the Wayne Savings Entities, whether or not prepared in whole or in part by the Executive
and whether or not disclosed to or entrusted to the custody of the Executive. The Executive agrees that upon the termination of
the Executive's

    	8

    	 

    

employment with the Wayne Savings Entities
for any reason, the Executive will return promptly to the Wayne Savings Entities all memoranda, notes, records, reports, manuals,
pricing lists, prints and other documents (and all copies thereof) relating to the Wayne Savings Entities’ business which
he may then possess or have within the Executive's control, regardless of whether any such documents constitute Confidential Information.
The Executive further agrees that he shall forward to the Wayne Savings Entities all Confidential Information which at any time
(including after the period of his employment with the Wayne Savings Entities) should come into the Executive's possession or the
possession of any other person, firm or entity with which the Executive is affiliated in any capacity. Notwithstanding the foregoing,
Executive may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Wayne Savings Entities, and Executive may disclose any information
regarding the Bank or the Company which is otherwise publicly available.

 

(d)Executive agrees
that, while he is employed by the Wayne Savings Entities and for a period of twenty-four months after the termination or cessation
of such employment for any reason, Executive shall not:

		(i)	Engage or participate, directly or indirectly, either as principal,
agent, employee, employer, consultant, director, shareholder (except as the holder of not more than two percent of the stock of
any publicly traded corporation) or in any other individual or representative capacity whatsoever, in the operation, management
or ownership of any state or federally chartered financial institution engaged in a business in direct competition with the business
of the Wayne Savings Entities (or any business proposed to be conducted by the Wayne Savings Entities at the time of such termination
of employment) within any of the counties within the State of Ohio, or any counties contiguous thereto, in which the Bank is operating
a branch at the time of such termination of Executive’s employment; or 
	 	 	 

		(ii)	Directly or indirectly, alone or in conjunction with or on behalf
of any other person, solicit, divert, take away or endeavor to take away from the Bank any person who was or is a customer or account
of the Bank as of the date of Executive’s termination of employment with the Wayne Savings Entities or at any time during
the six (6) months prior to the date thereof; provided, however, that nothing herein shall prohibit Executive from ceasing to be,
or causing Executive’s immediate family members to cease to be, customers of the Bank.

 

(e) Executive
agrees that he shall not at any time (whether during or for a period of one (1) year after the Executive's termination of employment
with the Wayne Savings Entities), without the prior written consent of the Wayne Savings Entities, either directly or indirectly
(i) solicit (or attempt to solicit), induce (or attempt to induce), cause or facilitate any employee, director, agent, consultant,
independent contractor, representative or associate of the Wayne Savings Entities to terminate his, her or its relationship with
the Wayne Savings Entities, or (ii) solicit (or attempt to solicit), induce (or attempt to induce), cause or facilitate any supplier
of services or products to the Wayne Savings Entities to terminate or change his, her or its relationship with the Wayne Savings

    	9

    	 

    

Entities, or otherwise interfere with
any relationship between the Wayne Savings Entities and any of the Wayne Savings Entities’ suppliers of products or services.

(f)Executive
agrees not to in any way slander or injure the business reputation or goodwill of the Wayne Savings Entities through any contact
with customers, vendors, suppliers, employees or agents of the Wayne Savings Entities, or in any other way.

(g)Executive
agrees that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, and all similar
or related information which relates to the Wayne Savings Entities’ actual or anticipated business, research and development
or existing or future products or services and which are conceived, developed or made by the Executive while employed by the Wayne
Savings Entities (all of the foregoing being referred to herein as “Work Product”) belong to the Wayne Savings Entities.
The Executive shall perform all actions reasonably requested by the Wayne Savings Entities (whether during or after the employment
period) to establish and confirm such ownership of Work Product (including, without limitation, assignments, consents, powers of
attorney and other instruments).

(h)Executive
acknowledges that the restrictions contained in this Section 10 are reasonable and necessary to protect the legitimate interests
of the Wayne Savings Entities. If the event of a breach or threatened breach by the Executive of any of the provisions of Section
10 hereof, the Wayne Savings Entities, or either of them, shall have the right to specifically enforce this Agreement by means
of an injunction, it being acknowledged by the Executive and agreed upon by the parties that any such breach will cause irreparable
injury to the Wayne Savings Entities for which money damage alone will not provide an adequate remedy. The rights and remedies
enumerated above shall be in addition to, and not in lieu of, any other rights and remedies available to the Wayne Savings Entities
at law or in equity.

(i)In the
event any of the covenants contained in Section 10 or any portion thereof, shall be found by a court of competent jurisdiction
to be invalid or unenforceable as against public policy or for any other reason, such court shall exercise its discretion to reform
such covenant to the end that the Executive shall be subject to covenants that are reasonable under the circumstances and are enforceable
by the Wayne Savings Entities. In any event, if any provision of this Agreement is found unenforceable for any reason, such provision
shall remain in force and effect to the maximum extent allowable and all unaffected provisions shall remain fully valid and enforceable.

(j)In the
event of a violation of this Section 10, the applicable time periods provided in Section 10(d) and (e) shall be tolled during the
time of such violation. No waiver of the provisions of this Section 10 shall be effective unless made in writing and signed by
the Chairman of the Board of Directors on behalf of the Board.

		11.	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, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive and, if such amounts and benefits due from the Bank
are not timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by the Company.

    	10

    	 

    

		12.	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 Wayne Savings
Entities or either of them or any predecessors and Executive, except that this Agreement shall not affect or operate to reduce
any benefit or compensation inuring to the 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.
Notwithstanding the foregoing, this Agreement supersedes the November 30, 2006 Amended and Restated Employment Agreement, as amended,
between the Bank and the Executive, which agreement is void and of no further force or effect.

 

		13.	NO ATTACHMENT.

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 affect any such action shall be null, void, and of no effect.

This Agreement
shall be binding upon, and inure to the benefit of, Executive and the Wayne Savings Entities and their respective successors and
assigns.

 

		14.	MODIFICATION AND WAIVER.

(a)                 
This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. In addition,
notwithstanding anything in this Agreement to the contrary, the Wayne Savings Entities may amend in good faith any terms of this
Agreement, including retroactively, in order to comply with Section 409A of the Code.

 

(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.

 

		15.	REQUIRED REGULATORY PROVISIONS.

 

(a)               
The Board may terminate the Executive’s employment at any time, but any termination by the Board of Directors, other
than Termination for Cause, shall not prejudice Executive's right to compensation or other benefits under this Agreement. Executive
shall not have the right to receive compensation or other benefits for any period after Termination for Cause as defined in Section
8 hereinabove.

 

(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)

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(12 U.S.C. §§ 1818(e)(3)) or 8(g)
(12 U.S.C. § 1818(g)) of the Federal Deposit Insurance Act (the "FDI Act"), the Wayne Savings Entities’ 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 Wayne Savings Entities may in their discretion (i) pay the Executive all or part of the compensation
withheld while their contract obligations were suspended and (ii) reinstate (in whole or in part) any of the 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) (12 U.S.C. §§ 1818(e)) or 8(g) (12 U.S.C. § 1818(g)) of the FDI Act, all obligations of
the Wayne Savings Entities under this contract 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) (12 U.S.C. § 1813(x)(1)) of the FDI Act, all obligations of the
Wayne Savings Entities under this contract shall terminate as of the date of default, but this paragraph shall not affect any vested
rights of the contracting parties.

 

(e)                

All obligations
of the Wayne Savings Entities under this contract shall be terminated, except to the extent determined that continuation of the
contract is necessary for the continued operation of the Bank, by the Director or other designated official, at the time the FDIC
or any other federal or state entity enters into an agreement to provide assistance to or on behalf of the Bank or approves a supervisory
merger to resolve problems related to the operations of the Bank or when the Bank is determined by the FDIC or other applicable
regulatory authority 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)                

FDIC Part 359
Limitations. Despite any contrary provision in this Agreement, any payments made to Executive under this Agreement, or otherwise,
shall be subject to compliance with 12 U.S.C. 1828 and FDIC Regulations 12 CFR Part 359, Golden Parachute Indemnification Payments,
and any other regulations or guidance promulgated thereunder.

 

		16.	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.

 

		17.	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.

 

		18.	GOVERNING LAW.

This Agreement
shall be governed by the laws of the State of Ohio but only to the extent not

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superseded by federal law.

 

		19.	ARBITRATION.

Any dispute or
controversy arising under or in connection with this Agreement and not involving a Change in Control shall be settled exclusively
by arbitration, conducted before a panel of three arbitrators sitting in a location selected by the employee within the Cleveland
metropolitan area, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction; provided, however, that Executive shall be entitled to seek specific
performance of his right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under
or in connection with this Agreement.

 

		20.	PAYMENT OF LEGAL FEES.

(a)                

All reasonable
legal fees paid or incurred by Executive pursuant to any dispute or question of interpretation relating to this Agreement other
than as a result of a Change in Control shall be paid or reimbursed by the Wayne Savings Entities, provided that the dispute or
interpretation has been settled by Executive and the Wayne Savings Entities or judicially resolved in the Executive's favor.

(b)                

The Wayne
Savings Entities are aware that, after a Change in Control, management could cause or attempt to cause the Wayne Savings Entities
to refuse to comply with their obligations under this Agreement, or could institute or cause or attempt to cause the Wayne Savings
Entities to institute litigation seeking to have this Agreement declared unenforceable, or could take or attempt to take other
action to deny Executive the benefits intended under this Agreement. The Wayne Savings Entities desire that the Executive not be
required to incur the expenses associated with the enforcement of rights under this Agreement in the event of a Change in Control,
whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits
intended to be granted to the Executive hereunder, and further desire that the Executive not be forced to negotiate settlement
of rights under this Agreement under threat of incurring expenses. Accordingly, if, after a Change in Control occurs, Executive
reasonably believes that the Wayne Savings Entities or either of them (x) have failed to comply with any obligations under
this Agreement, or (y) they, or any other person, have taken any action to declare this Agreement void or unenforceable,
or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended
to be provided to the Executive hereunder, the Wayne Savings Entities irrevocably authorize the Executive from time to time to
retains counsel of the Executive’s choice at the Wayne Savings Entities’ expense as provided in this Section 20, to
represent the Executive in the initiation or defense of any litigation or other legal action in any jurisdiction, whether by or
against the Wayne Savings Entities or any director, officer, stockholder, or other person affiliated with the Wayne Savings Entities.
The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed
to the Executive by the Wayne Savings Entities on a regular, periodic basis upon presentation by the Executive of a statement or
statements prepared by counsel in accordance with counsel’s customary practices, up to a maximum aggregate amount of $500,000.00,
whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate

    	13

    	 

    

proceedings. The Wayne Savings Entities’
obligation to pay the Executive’s legal fees under this Section 20 operates separately from and in addition to any legal
fee reimbursement obligation the Wayne Savings Entities may have with the Executive under any separate severance or other agreement.
Despite any contrary provision of this Agreement, however, the Wayne Savings Entities shall not be required to reimburse the Executive’s
legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [as U.S.C. 1828(k)] or Rule 359.3 of
the Federal Deposit Insurance Corporation [12 CFR 359.3].

 

		21.	INDEMNIFICATION.

The Wayne Savings
Entities shall provide Executive (including his heirs, executors and administrators) with coverage under a standard directors'
and officers' liability insurance policy at the expense of the Wayne Savings Entities, and shall indemnify Executive (and his heirs,
executors and administrators) to the fullest extent permitted by 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 the Company (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 of Directors of the Bank or the Company,
as appropriate), provided, however, neither the Bank nor Company shall be required to indemnify or reimburse the Executive for
legal expenses or liabilities incurred in connection with an action, suit or proceeding arising from any illegal or fraudulent
act committed by the Executive.

 

		22.	SUCCESSOR TO THE WAYNE SAVINGS ENTITIES.

 

The Wayne Savings Entities
shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Company, expressly and unconditionally to assume and agree to perform
the Wayne Savings Entities’ obligations under this Agreement, in the same manner and to the same extent that the Wayne Savings
Entities would be required to perform if no such succession or assignment had taken place.

 

		23.	COMPLIANCE WITH INTERNAL
REVENUE CODE SECTION 409A.

 

The Wayne Savings Entities
and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with section 409A of
the Internal Revenue Code of 1986 and all other applicable laws. If, when Executive’s employment terminates, Executive is
a Specified Employee, as defined in section 409A of the Internal Revenue Code of 1986, and if any payments under this Agreement,
including but not limited to Sections 4, 5, and 6, will result in additional tax or interest to Executive because of Section 409A,
then despite any provision of this Agreement to the contrary Executive shall not be entitled to the payments until the earliest
of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than
the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date that does not result
in additional tax or interest to Executive under section 409A. As promptly as possible after the end of the period during which
payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single
lump sum. No interpretation of this Agreement which does not satisfy the requirements of Section 409A shall be

    	14

    	 

    

applied; instead, such provision shall be applied
in a manner consistent with those requirements despite any contrary provision of this Agreement. If any provision of this Agreement
would subject Executive to additional tax or interest under Section 409A, the Bank shall reform the provision, maintaining to the
maximum extent practicable the original intent of the applicable provision if it can do so without incurring any additional compensation
expense, tax or penalties as a result of the reformed provision. References in this Agreement to Section 409A of the Internal Revenue
Code of 1986 include rules, regulations, and guidance of general application issued by the Department of the Treasury under Internal
Revenue Code Section 409A.

 

 

 

Signature
Page Follows

 

 

 

 

 

 

 

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SIGNATURES

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

	ATTEST:	WAYNE SAVINGS BANCSHARES, INC.
	 	 	 
	 	 	 
	/s/ Brittany N. Hartzler	 	By: 	/s/ Peggy J. Schmitz
	Secretary	 	     Peggy J. Schmitz, Chair
	 	 	     Board of Directors
	 	 	 
	 	 	 
	 	WAYNE SAVINGS COMMUNITY BANK
	 	 	 
	 	 	 
	/s/ Brittany N. Hartzler	 	By:	/s/ Rod C. Steiger
	Secretary	 	     Rod C. Steiger, Chair
	 	 	     Board of Directors
	 	 	 
	 	 	 
	WITNESS:	EXECUTIVE:
	 	 	 
	 	 	 
	/s/ Brittany N. Hartzler	 	 	/s/ H. Stewart Fitz Gibbon III
	 	 	     H. Stewart Fitz Gibbon III

    	16

    	 

    

Schedule 2(b)

Approved Boards, Offices and Positions as of November 3,
2014:

CSBS working group

Wooster Area Chamber of Commerce

Buckeye Council, BSA

BSA Troop 61

St. James Episcopal Church,
Assistant Treasurer

CAMO Finance Committee

Wooster Transit

 

 

 

 

    	17

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