Document:

thrm-ex101_6.htm

EXHIBIT 10.1

September 18, 2017

Mr. Phillip Eyler

 

Dear Phil:

On behalf of the Board of Directors of Gentherm Incorporated (the “Company”), we are pleased to extend you an offer of employment to join the Company as President and Chief Executive Officer. We are confident that your contribution to our mission and growth will be exceptional. In light of the fact that you will be resigning your current employment in reliance on this offer, this offer is irrevocable by the Company if timely accepted. As discussed, the terms of your offer are summarized below:

1.Position. Your title will be President & Chief Executive Officer. As such, you will be responsible for, among other things, directing and leading the Company and its executive management team and otherwise performing such duties and responsibilities as are customarily assigned to individuals serving in similar positions of other public companies. Without limitation, this includes ultimate responsibility for the strategic direction, performance and execution of the Company’s plans and strategies. You will report directly to the Board of Directors (the “Board”) of the Company. Your principal place of business will be at the Company’s offices in Northville, Michigan; however, as the Company is a global business with facilities worldwide, you will be expected to travel to other Company locations on a regular basis. We are anxious to have you begin with the Company as soon as possible, but we recognize you have other commitments that must first be resolved. However, this offer assumes that you will begin full time work in your new position no later than December 31, 2017. The actual date of your first day of work with the Company is referred to in this letter as the “Start Date.” Effective as of your Start Date, the Board has agreed to appoint you as a Director of the Company and simultaneously increasing the number of Directors on the Board to nine.

2.Salary Compensation. Your initial base annual salary will be $750,000, payable in accordance with the Company’s payroll policies as from time to time in effect (“Base Salary”). Your Base Salary will be reviewed annually by the Board and may be increased by the Board in its discretion. Your Base Salary will not be subject to reduction without your prior written consent, except that if the Board reduces the salary of all senior executives of the Company (for example, in the event of a significant downturn impacting the Company) your Base Salary will be reduced by the same percentage as the percentage reduction in salary of such senior executives.

3.Signing Bonus and Make Whole Bonuses. 

(a)Signing Bonus. As part of the first regular payroll after the Start Date, the Company will pay you a one-time signing bonus of $250,000 (the “Signing Bonus”).

(b)Make Whole Bonuses. In recognition of certain guaranteed bonuses from your current employer that you are foregoing by accepting this offer, the Company will pay you the following:

(i)First Make Whole Bonus. No earlier than January 1, 2018 and no later than March 31, 2018, the Company will pay you a bonus of $1,000,000 (the “First Make Whole Bonus”).

 

 

(ii)Second Make Whole Bonus. No earlier than January 1, 2019 and no later than March 31, 2019, the Company will pay you a bonus of $1,000,000 (the “Second Make Whole Bonus”).

(c)Clawback. If you terminate your employment with the Company without Good Reason (as defined in Section 7 below) or if the Company terminates your employment for Cause (as defined in Section 7 below) prior to the first anniversary of your Start Date, you will be required to repay (net of withheld and deducted payroll taxes) the Signing Bonus and the First Make Whole Bonus (if it has been paid to you) to the Company immediately upon your termination.

4.Cash Bonus. You will be entitled to an annual cash bonus (your “Cash Bonus”) based on your performance and the performance of the Company. The Company, in its discretion, pays its executives annual cash bonuses in two installments: the first installment is based on a combination of individual and Company performance for the first half of each calendar year and is paid in August of that year; the second installment is based on a combination of individual and Company performance for the full calendar year, is reduced by the amount of bonus already paid for the first half of that year, and is paid in March of the following year. No annual Cash Bonus is guaranteed. The other terms and conditions of the annual Cash Bonus are set forth in the Gentherm Incorporated Executive Bonus Plan adopted effective as of January 1, 2017 (the “Bonus Plan”), a copy of which is attached. Your target Cash Bonus is 100% of your Base Salary. There is no maximum amount payable to you as annual Cash Bonus as the Board has full discretion to increase your annual Cash Bonus as it deems appropriate. For the Cash Bonus period that begins on your first day of employment with the Company and ends on December 31, 2017, you will be entitled to a prorated Cash Bonus corresponding to the number of days you worked during such period as compared to the total number of working days in the year 2017 and such prorated Cash Bonus will be payable during March of 2018. 

5.Equity Grants. On the Start Date, the Company will grant you the following equity awards, each subject to the terms and conditions of the Gentherm Incorporated 2013 Equity Incentive Plan and each contingent upon your execution of the attached form of Award Agreement evidencing such award:

30,000 shares of Gentherm Common Stock (the “Start Date Restricted Common Stock”) that will vest in three equal annual installments on the first, second and third anniversaries of your Start Date; and

212,500 options to purchase Gentherm Common Stock (the “Start Date Options”) that will vest in four equal annual installments on the first, second, third and fourth anniversaries of your Start Date (the exercise price of the Start Date Options will be the closing price of the Company’s Common Stock on the last business day before your Start Date, in accordance with the Gentherm Incorporated 2013 Equity Incentive Plan).

The Board has historically granted additional shares of restricted Common Stock and options to purchase common stock to the executive officers of the Company at the beginning of each year. The above grants of Restricted Common Stock and Options are intended to be the substitute for any such grants that might otherwise be awarded to you at the beginning of 2018. While there is no guaranty that the Board will continue this practice, you would certainly be expected to participate in such awards starting in 2019, if and when granted by the Board. Current targeted annual restricted stock awards and option awards for your position are 25,000 and 100,000 per year; however, for clarity, such amounts are not guaranteed and may increase or decrease as determined by the Board.

6.Vacation, Benefits, Expenses, Perquisites.

(a)You will be entitled to all legal holidays recognized by the Company, and 20 days of paid vacation per annum. Any unused vacation will be subject to Company policy as from time to time in effect. Vacation days for the first fiscal year of your employment will be prorated. You will 

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also be entitled to sick leave in accordance with the Company’s sick leave policy as from time to time in effect.

(b)You will be entitled to participation in any health, dental, vision, life, disability, and other insurance plans that may be established and maintained by the Company from time to time for its employees of your level, all as determined by the Board in its discretion. You will also be entitled to participate in any employee benefit programs that the Board may establish for Company employees generally, including but not limited to 401(k) Plans and related matching. The Company will provide Director’s and Officer’s insurance and tail coverage for your benefit. After your start date and before your first-year anniversary, we will discuss and mutually agree upon a deferred compensation plan, retirement plan, or other similar benefit for you consistent with market practices.

(c)The Company will reimburse you for all usual and ordinary business expenses incurred by you in the scope of your employment hereunder in accordance with the Company’s expense reimbursement policy as from time to time in effect. All air travel you complete on behalf of the Company will be booked in First Class (domestic) or Business Class (international), if available, and you will be entitled to use a car service to/from the airport.

(d)The Company will provide you with a Company-owned automobile, which must contain Company-manufactured content, to use full time, and pay for all operating and insurance expenses for the automobile. You will be taxed on the value of your personal usage of such automobile.

(e)The Company will provide you with a Company-owned mobile phone, laptop computer and tablet, and country club membership fees and dues; provided, however, that you will be responsible for your personal use charges at such country club and you will be taxed on the value of your personal use portion of the country club fees and dues paid by the Company. 

7.Severance Pay.

(a)If your employment is terminated by the Company or successor (or if the Company revokes this offer after you sign and return it) without “Cause” (as defined below) or by you for “Good Reason” (as defined below) other than in connection with a Change in Control (as described below), and subject to the notice and release requirements described below, the Company will pay: (i) the Make Whole Bonuses (to the extent not already paid) listed in paragraph 3(b) together with your Base Salary for a period of 12 months, payable in a lump sum; (ii) the employee portion of your COBRA continuation coverage (to the extent that you elect coverage) for a period of 12 months or, if earlier, until you become entitled to participate in another employer’s health plan; (iii) a prorated Cash Bonus for the period that includes the last date of your employment, payable on the normal bonus payment date that would apply had your employment not terminated at no less than the prorated target bonus amount (but higher if your individual performance and the Company’s performance would require a higher payment under the terms of the Bonus Plan); (iv) a lump sum cash payment equal to your target annual Cash Bonus for one year payable within 60 days after your employment termination date; and (v) outplacement services for one year, up to a maximum outplacement cost of $50,000. In addition to the foregoing, all unvested equity awards (including all forms of options and stock) granted to you by the Company that are scheduled to vest within 12 months following the termination of your employment will automatically vest on the date of your termination; provided, however, that all Start Date Restricted Common Stock and Start Date Options would automatically vest on the date of your termination regardless of when such Start Date Restricted Common Stock and Start Date Options were scheduled to vest.

(b)If your employment is terminated by the Company or successor without “Cause” (as defined below) or by you for “Good Reason” (as defined below) during the window period starting with the signing of an agreement to engage in a Change in Control (as defined below) until 12 months after the Change in Control (as defined below), and subject to the notice and release requirements described below, the Company will cause to be paid to you: (i) in a lump sum within 30 days after your termination date, the Make Whole Bonuses (to the extent not already paid) listed in paragraph 3(b) 

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together with your then current Base Salary for a period of 24 months; (ii) the employee portion of your COBRA continuation coverage (to the extent that you elect coverage) for a period of 24 months or, if earlier, until you become entitled to participate in another employer’s health plan; (iii) a prorated Cash Bonus for the period that includes the last date of your employment, payable within 30 days after your termination date at no less than the prorated target bonus amount (but higher if your individual performance and the Company’s performance would require a higher payment under the terms of the Bonus Plan); (iv) a lump sum cash payment within 30 days after your termination date equal to your target annual Cash Bonus for two years; and (v) outplacement services for one year, up to a maximum outplacement cost of $50,000. In addition to the foregoing, all unvested equity awards (including all forms of options and stock) granted to you by the Company, regardless of when such unvested equity awards were scheduled to vest, will automatically vest on the date of your termination. The severance pay provided under this Section 7(b) will supersede, and not be in duplication of, the severance pay provided under Section 7(a).

(c)“Cause” means only your: (i) material or persistent breach of this letter agreement; (ii) engaging in any act that constitutes serious misconduct, theft, fraud, material misrepresentation, serious dereliction of fiduciary obligations or duty of loyalty to the Company; (iii) conviction of a felony, or a plea of guilty or nolo contendere to a felony charge or commission of any criminal act involving moral turpitude which in the reasonable opinion of the Board brings you, the Board, or the Company into disrepute; (iv) willful misconduct in the performance of your material duties under this letter agreement; (v) willful, unauthorized disclosure of material confidential information belonging to the Company, or entrusted to the Company by a client, customer, or other third party; (vi) repeatedly being under the influence of drugs or alcohol (other than prescription medicine or other medically related drugs to the extent that they are taken in accordance with their directions) during the performance of your duties under this letter agreement, or, while under the influence of such drugs or alcohol, engaging in grossly inappropriate conduct during the performance of your duties under this letter agreement; (vii) repeated failure to comply with the lawful directions of the Board that are not inconsistent with the terms of this letter agreement; (viii) any material failure to comply with the Company's material written policies or rules that are not inconsistent with this letter agreement; (ix) material omission, misrepresentation, or falsification of any material information during your interview, background check, or employment negotiations that the Company relied upon in hiring you which first becomes known to the Company after the date of this letter agreement; or (x) your personal engagement in conduct that a judicial or arbitral tribunal finds violated applicable state or federal laws governing the workplace that could reasonably be expected to bring the Company into disrepute. In order for the Company to terminate your employment for Cause under any of clauses (i), (iv), (vi), (vii) or (viii) in the preceding sentence, the Company must provide you with written notice of its intention to terminate employment for Cause and describing the acts or omissions upon which such termination for Cause is based, and you will be provided a 30-day period from the date of such notice within which to cure or correct such acts or omissions if they are reasonably susceptible of cure or correction.

(d)“Good Reason” means the occurrence of any of the following without your consent:

(i)a material breach of this letter agreement by the Company;

	
 
	
(ii)
	
a material diminution in your then-current compensation or benefits, authority, duties, or responsibilities; 

	
 
	
(iii)
	
a requirement that you report to a corporate officer or employee instead of the Board; or

	
 
	
(iv)
	
any successor’s failure to explicitly assume the Company’s duties and obligations under the terms of this letter agreement.

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Notwithstanding the above, no “Good Reason” exists unless (I) you notify the Company in writing within 30 days after the existence of any condition listed above, and the Company fails to cure the condition within 30 days after receiving notice, and (II) you terminate employment by no later than 180 days after the providing the notice. Your waiver of any event constituting Good Reason shall not constitute a waiver of any subsequent event.

(e)A “Change in Control” means the earliest to occur of any of the following events, each of which must also constitute a “change in control event” (within the meaning of Treas. Reg. section 1.409A-3(i)(5)):

	
 
	
(i)
	
Any one Person or more than one Person Acting as a Group (each as defined below) acquires, or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group, beneficial ownership of more than a majority of the total fair market value or total voting power of the then-outstanding securities of the Company;

	
 
	
(ii)
	
Any one Person or more than one Person Acting as a Group (each as defined below) acquires, or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group, the assets of the Company that have a total gross fair market value (as determined by the Board) of more than 50% of the total gross fair market value of all of the assets of, as applicable, the Company immediately prior to the initiation of the acquisition; or

	
 
	
(iii)
	
A majority of the members of the board of directors of the Company is replaced during any 12-month period by directors whose appointment or election is not endorsed or approved by a majority of the members of the board who were members of the board prior to the initiation of the replacement.

For purposes of this Section 7(e), a “Person” means any individual, entity or group within the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or (C) any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company. Persons will be considered to be “Acting as a Group” (or a “Group”) if they are a “group” as defined under Section 13 of the Exchange Act. If a Person owns equity interests in both entities that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be Acting as a Group with other shareholders only with respect to the ownership in that entity before the transaction giving rise to the change and not with respect to the ownership interest in the other entity. Persons will not be considered to be Acting as a Group solely because they purchase assets of the same entity at the same time or purchase or own stock of the same entity at the same time, or as a result of the same public offering.

 (f)Your right to receive severance pay under this Section 7 is conditioned upon (i) your signing and delivering to the Company, and there becoming irrevocable, within 45 days after your employment termination date, a general release of claims, in form and substance reasonably acceptable to the Company, by which you release the Company from any claim arising from your employment by, or termination of employment with, the Company, in consideration for the payment; and (ii) your compliance with Sections 9, 10, and 11 of this letter agreement. The release shall preserve your entitlement to your compensation and benefits under this letter agreement, your vested savings and retirement benefits, as well as indemnification and defense in accordance with the Company’s bylaws, personnel policies, insurance policies, and applicable law. The Company will make no payment unless the general release becomes effective on or before the 45th day following your employment termination date. 

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Provided that you satisfy the foregoing release requirement, any severance payment under this Section 7 that otherwise would be due before then will be paid to you in a lump sum on the first regular Company payroll date following the 45th day after your employment termination date, and any severance payments due after such date under Section 7 will be paid to you at the time set forth in the foregoing provisions of this Section 7.

(g)On termination of your employment (for whatever reason) you will be entitled to receive the pro rata portion of your Base Salary through the date of your termination, together with such compensation or benefits to which you may be entitled by law or under the terms of the Company’s compensation and benefit plans in effect including, without limitation, amounts owed to you for unpaid vacation leave accrued during the course of your employment with the Company pursuant to Company policy as from time to time in effect. There shall be no setoffs or mitigation requirements for any amounts the Company may owe under this letter agreement, except that the Company may setoff against amounts owed to you any clawbacks that are due and payable from you under Sections 3(c) or 13.

8.At Will Employment.

(a)This letter agreement describes the compensation and benefits that you are entitled to receive for so long as you remain employed by the Company, but is not a contract or guarantee of employment for any particular period of time. At all times you will remain an employee at will, and you and the Company are free to terminate your employment at any time for any reason. This employment at will policy does not affect the Company’s obligations under this letter agreement. 

(b)Should your employment with the Company be terminated by the Company for Cause, by you without Good Reason, or as a result of your death or permanent disability or other physical or mental incapacity, you will be entitled to receive only the prorated portion of your Base Salary through the date of your termination of employment, together with such other compensation or benefits to which you may be entitled by law, the terms of this letter agreement, or under the terms of the Company’s compensation and benefit plans then in effect.

(c)Upon termination of your employment for any reason, you will, if requested by the Board, resign from any directorships effective immediately or at such later date as the Board may request. If you fail to provide such resignation, you irrevocably appoint the Chairman of the Board as your attorney with the irrevocable right to sign any document on your behalf for the purposes of, or to give effect to, your resignation under this clause.

9.Noncompetition.

(a)You will not, without the prior written consent of the Company, during your employment either directly or indirectly in any capacity (including without limitation as principal, agent, partner, employee, shareholder, unit holder, joint venturer, director, trustee, beneficiary, manager, consultant, or advisor) carry on, advise, provide services to or be engaged, concerned or interested in or associated with any Competitive Business (as defined below), or be engaged or interested in any public or private work or duties which in the reasonable opinion of the Board or the Company, may hinder or otherwise interfere with the performance of your duties.

(b)You will not at any time in the 12 months after the termination of your employment (for whatever reason) without the written consent of the Company:

	
 
	
(i)
	
on a worldwide basis, directly or indirectly in any capacity (whether as principal, agent, partner, employee, shareholder, unit holder, joint venturer, director, trustee, beneficiary, manager, consultant, or advisor) carry on, advise, provide services to or be engaged, concerned or interested in or associated with any Competitive Business (as defined below); or

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(ii)
	
counsel, procure, or otherwise assist any person to do any of the acts referred to in Section 9(b)(i).

Given that the business of the Company is and is expected to continue to be conducted on a worldwide basis, and you will be actively involved with and intimately familiar with the business of the Company on a worldwide basis, you acknowledge and agree that more narrow geographical limitations of any nature on this noncompetition covenant (and the nonsolicitation covenant below) are therefore not appropriate and would not adequately protect the Company.

Nothing in this Section 9(b) prohibits you (whether directly or through nominees) of holding shares listed on a recognized stock exchange, provided you do not hold more than 2% of the issued capital of a company.

(c)“Competitive Business” means any business or activity which is involved in the research, development, sale, distribution and/or marketing of any of the products that are manufactured, sold or distributed, or currently subject to active R&D projects with the intent to manufacture, sell or distribute within 3 years by the Company or any of its subsidiaries during your employment.

10.Nonsolicitation. During your employment with the Company and for 12 months after your termination of employment (for whatever reason), you will not, directly or indirectly, on your own behalf or on behalf of any third party, without the express written consent of the Company:

(a)canvass, solicit, target, induce or entice or endeavor to solicit, target, induce or entice away from the Company, or attempt to divert, reduce or take away, the business or patronage (with respect to products or services of the kind or type developed, produced, marketed, furnished or sold by the Company) of any of the clients, customers, vendors, suppliers or accounts, or prospective clients, customers, suppliers, vendors or accounts of the Company;

(b)target, recruit, solicit, hire away, or otherwise interfere with the employment relationship of, or endeavor to entice away, any employee of the Company, or otherwise induce any such employee to cease their relationship with the Company, excluding employees responding to a general solicitation not targeted in any manner to violate this Section 10; or

(c)counsel, procure or otherwise assist any person to do any of the acts referred to in Section 10(a) or (b).

11.Nondisparagement. You will not, while employed by the Company or at any time after your termination of employment, directly, or through any other personal entity, make any public or private statements that are disparaging of the Company, their respective businesses or employees, officers, directors, or shareholders. The Company agrees that, after your termination of employment with the Company for any reason, it will refrain from making any public statements that disparage you. The Company’s obligations under this Section 11 extend only to the then-current officers and members of the Board, and only for so long as those individuals are officers or directors of the Company. Nothing herein will be deemed to prevent you or the Company from complying with their respective legal obligations or responding to a subpoena or other court order.

12.Proprietary Information. Both during and after your employment with the Company, you will treat all proprietary or other confidential information as strictly confidential. Further, you agree to sign and comply with the terms and conditions of the enclosed Confidential Information and Invention Assignment Agreement, which is incorporated by reference into this letter agreement. This offer is contingent upon your signing that agreement.

13.Injunctive Relief; Severance Clawback; Incentive Clawback. You recognize and acknowledge that it would be difficult to ascertain the damages arising from a breach or threatened breach of the covenants set forth in Sections 9 (noncompetition), 10 (nonsolicitation), 11 (nondisparagement), 

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and 12 (proprietary information) and that any such breach or threatened breach could result in irreparable harm to the Company. You therefore agree that, notwithstanding anything in this letter agreement to the contrary, including but not limited to the forfeiture and clawback provision below, the Company will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, without prior notice to you and without the posting of a bond or other guarantee, to enforce this letter agreement. You hereby waive any and all defenses you may have on the ground of lack of jurisdiction (but not venue) or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any other rights and remedies at law or in equity that the Company may have. The provisions of this Section 13 will survive termination of this letter agreement and/or your employment with the Company. The existence of a claim or cause of action of any kind by you against the Company will not constitute a defense to the enforcement by the Company of the rights provided in this Section 13 and will not be a defense to any injunction proceeding. In addition, notwithstanding anything herein to the contrary, if there is a judicial or arbitral finding that you have engaged in any activity that contravenes any covenant set forth in Section 9, 10, 11 or 12 , you will forfeit any amount payable under Section 7 (severance pay), and you agree to repay such amounts to the Company; provided, however, that you may retain $1,000 of the monies paid to you as consideration for the release you signed in Section 7 above (the requirement to forfeit and/or repay monies does not affect the release which will remain in full force and effect). You further acknowledge that incentive cash compensation that is paid to you, and incentive equity grants that you receive, are subject to the Gentherm Incorporated Compensation Clawback Policy, a copy of which has been provided to you previously.

14.Blue Pencil; Severability. If any provision of this letter agreement is construed by a court of competent jurisdiction to be invalid or unenforceable, that construction does not affect the remainder of this agreement, which is to be given full force and effect without regard to the invalid or unenforceable provision. Any invalid or unenforceable provision is to be reformed to the maximum time, geographic and/or business limitations permitted by applicable laws, so as to be valid and enforceable.

15.Waivers. No delay or omission by either party’s waiver or consent on any one occasion is effective only for that occasion and is not be construed as a bar or waiver of any right on any other occasion.

16.Statute of Limitations. The parties agree that they will have a maximum of one hundred eighty (180) days to bring any claims for money damages related to this letter agreement. 

17.Federal Employment Law. Please note that Federal law requires you to provide the Company with documentation of your identity and eligibility to work in the United States. In addition, the Company verifies the validity of social security numbers. Accordingly, this offer is further conditioned upon your providing the required documentation to the Company within three business days after your Start Date.

18.Prior Employers. By accepting this offer of employment, you are representing that you are not party to any agreement with any prior employer that prevents your working for the Company or that would prevent you from performing your assigned duties for the Company.

19.Tax Withholding; Deductions; Method of Payment. The Company may withhold from any amounts payable under this letter agreement (including the Signing Bonus and Make Whole Bonuses) such federal, state, local or foreign income and employment taxes as will be required to be withheld under applicable law as determined by the Company. The Company may also withhold from any payroll amounts payable under this letter agreement all lawful deductions (including those approved by you, such as medical plan premium deductions, and those required by law, such as lawful wage garnishments or similar deductions). Any references herein to cash payments may include payments by check, direct deposit or otherwise as determined by the Company.

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20.Section 409A Compliance. The following rules relate to section 409A of the Internal Revenue Code of 1986 and any regulations and Treasury guidance promulgated thereunder (“Section 409A”), which govern deferred compensation:

(a)This letter agreement is intended to comply with, or otherwise be exempt from, Section 409A.

(b)The Company will undertake to administer, interpret, and construe this letter agreement in a manner that does not result in the imposition on you of any additional tax, penalty, or interest under Section 409A.

(c)The Company and you agree to execute any and all amendments to this letter agreement permitted under applicable law, as mutually agreed in good faith, as may be necessary to ensure that this letter agreement complies with Section 409A.

(d)The preceding provisions, however, will not be construed as a guarantee by the Company of any particular tax effect to you under this letter agreement. The Company will not be liable to you on account of any payment made under this letter agreement being subject to any additional tax, penalty, or interest under Section 409A, nor for reporting in good faith any payment made under this letter agreement as an amount includible in gross income under Section 409A.

(e)For purposes of Section 409A, the right to a series of installment payments under this letter agreement will be treated as a right to a series of separate payments.

(f)With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, you, as specified under this letter agreement, such reimbursement of expenses or provision of in-kind benefits will be subject to the following conditions: (i) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year will not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in section 105(b) of the Internal Revenue Code; (ii) the reimbursement of an eligible expense will be made no later than the end of the year after the year in which such expense was incurred; and (iii) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit.

(g)“Termination of employment,” or words of similar import, as used in this letter agreement means, for purposes of any payments under this letter agreement that are payments of deferred compensation subject to Section 409A, your “separation from service” as defined in Section 409A.

(h)If a payment obligation under this letter agreement arises on account of your separation from service while you are a “specified employee” (as defined under Section 409A and determined in good faith by the Board), any payment of “deferred compensation” (as defined under Treasury regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury regulation sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six months after such separation from service will accrue without interest and will be paid within 15 days after the end of the six-month period beginning on the date of such separation from service or, if earlier, within 15 days after the appointment of the personal representative or executor of your estate following your death.

(i)In the case of any amount payable during a particular period of time (such as within 30 days after your termination of employment), the Company shall determine when during that period payment will be made.

21.Successors, Binding Agreement. This letter agreement will not be assignable by you. This letter agreement may be assigned by the Company to any person that is a successor in interest to all or substantially all of the business operations of the Company. This letter agreement will be binding upon, and inure to the benefit of, the parties hereto and their respective successors, heirs and permitted assigns.

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22.Governing Law. This letter agreement will be governed in all respects, including as to validity, interpretation and effect, by the laws of the State of Michigan, without regard to its conflict of laws principles.

23.Entire Agreement, Amendments. This letter agreement, including the proprietary information, confidentiality, and inventions assignment agreement incorporated herein by reference, sets forth the entire agreement between you and the Company regarding your employment with the Company and supersedes all prior agreements or other understandings, whether written or oral, express or implied, between the parties to the extent that such agreements or understandings contain provisions addressed herein. This letter agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives; any such amendment or modification must explicitly reference this letter agreement. The terms of this letter agreement shall control over the inconsistent terms of any other plan, agreement, or policy.

24.Expiration of Offer Letter. The offer in this letter agreement will expire, if not accepted by you by returning a signed copy to the Company before such date, on September 30, 2017.

25.Sections 280G and 4999 of the Code. If any payment or benefit (including payments and benefits pursuant to this letter agreement) you are entitled to receive in connection with a Change in Control from the Company or otherwise (the “Payment”) (i) constitutes a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) is subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall increase the amount of the Payment (such increase, the “Tax Gross-Up”) to an amount which, after reduction for all taxes (including the Excise Tax) imposed on both the Payment and the Tax Gross-Up, exactly equals the amount of the Payment after reduction for all taxes imposed on the Payment other than the Excise Tax. Any Tax Gross-Up will be paid to you no later than the last day of the calendar year next following the calendar year in which the Excise Tax is due.

 

This is a great opportunity for both you and the Company, and we look forward to having you as a member on our team.

					
	
 
	
 
	
 
	
 
	
 

	
 
	
Sincerely,

 

GENTHERM INCORPORATED

 
	
 

	
 
	
By: 
	
/s/ Francois Castaing
	
 

	
 
	
 
	
Francois Castaing, Chairman of the Board
	
 

Agreed to and accepted by:

/s/ Phillip Eyler

Phillip Eyler

Dated: September 18, 2017

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Attachments:

Gentherm Incorporated Executive Bonus Plan adopted effective as of January 1, 2017

[Filed as Exhibit 10.2 to Form 8-K on December 16, 2016]

 

Form of Award Agreements

[Filed as Exhibits 10.1 and 10.3 to Form 8-K on June 27, 2013]WAYNE SAVINGS COMMUNITY BANK

EMPLOYMENT AGREEMENT

 

 

This Employment
Agreement ("Agreement") is made and entered into as of August 29, 2017 by and between Wayne Savings Community
Bank (the "Bank"), an Ohio commercial bank, with its principal administrative office at 151 North Market
Street, Wooster, Ohio and James R. VanSickle, II (the "Executive"). Any reference to "Company"
herein shall mean Wayne Savings Bancshares, Inc., the parent stock holding company of the Bank or any successor thereto.

 

WHEREAS, the Bank
agrees to employ Executive as its President and Chief Executive Officer, subject to the authority and direction of the Bank’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 Bank, Executive will be entrusted with and will have
access to certain Confidential Information (as hereinafter defined) related to the business and operations of the Bank and Company
which constitutes a valuable, special and unique asset of the Bank and/or the Company, 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 for the Bank (the "Executive Position").
As President and Chief Executive Officer, Executive agrees to serve under the direction of the Bank’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 August 29, 2017, and shall continue until December
31, 2019, 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 Executive’s obligations and the Bank’s rights under Section 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.

 

(c)The Executive hereby
consents to serve as a director of the Company and the Bank. The Executive hereby consents to being named as a director of the
Company in documents filed by the Company with the Securities and Exchange Commission. The Executive shall be deemed to have resigned
as a director of the Company and the Bank effective immediately after termination of the Executive’s employment under Section
4 of this Agreement, regardless of whether the Executive submits a formal, written resignation as director.

 

3.            COMPENSATION
AND REIMBURSEMENT.

 

(a)       The
compensation specified under this Agreement shall constitute the salary and benefits paid for the duties described herein. The
Bank shall pay Executive a salary of not less than $200,000 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, 2019, 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)       In
addition, Executive shall be eligible for an annual performance bonus of up to 35% of his annual salary based upon achieving specified
goals set by the Board with Executive’s input (“Performance Bonus”).

 

(c)       The
Bank will provide Executive with not less than four weeks of paid vacation annually, and such other 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 Bank in the future to its 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. Following the completion of the Initial Term
hereof, Executive will be entitled to incentive compensation and bonuses as provided in any plan of the Bank in which Executive
is determined by the Board to be 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.

 

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(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. To the extent required to comply with Section 409A, any reimbursement of expenses pursuant to this
Agreement, that will not be excluded from Executive’s income when received is subject to the following requirements: (i)
the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided in any other calendar year; (ii) the reimbursement of the eligible expense must be made on or
before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to
reimbursement is not subject to liquidation or exchange for another benefit.

 

4.             PAYMENTS
TO EXECUTIVE UPON AN EVENT OF TERMINATION.

 

(a)       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) the termination by the Bank or the Company of
Executive's full-time employment hereunder for any reason other than (A) termination for Cause (as defined in Section 7 hereof),
(B) upon Retirement (as defined in Section 6 hereof), or (C) for Disability (as set forth in Section 5 hereof); (ii) Executive's
resignation from the Bank's employ following (A) a material change in Executive's function, duties, or responsibilities, which
change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and 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 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 an employee-wide
reduction in pay or benefits), (C) a liquidation or dissolution of the Bank or the Company, or (D) material breach of this Agreement
by the Bank; 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 a reasonable period of time (not to exceed, except
in case of a continuing breach, ninety (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, or 6 hereof.

 

(b)       As
used in this Agreement, an Event of Termination shall also mean and include Executive's involuntary termination without Cause or
voluntary resignation for “Good Reason” (as the term “Good Reason” is defined by Treasury Regulation 1.409A-1(n)(2))
from the Bank's employ on the effective date of, or within 12 months following, a Change in Control during the Initial Term of
this Agreement or any renewal term hereof. For these purposes,
a Change in Control shall mean a change in the ownership of the Bank or the Company, a change in the effective control of the Bank
or the Company or a change in the ownership of a substantial portion of the assets of the Bank or the Company, in each case as
provided under Treasury Regulation 1.409A-3(i)(5).

 

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(c)       Upon
the termination of Executive’s employment constituting a separation from service, as defined in Treasury Regulation 1.409A-1(h),
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 Bank a release agreement in form and substance acceptable to the Bank (“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 Bank, 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), three (3) times
the sum of:

 

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

 

		(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.

 

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.

 

If Executive is a Specified
Employee, the Bank shall pay Executive the Termination Payment 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 Treasury Regulation 1.409A-1(h).

 

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(d)       Upon
the termination of Executive’s employment constituting a separation from service, as defined in Treasury Regulation 1.409A-1(h),
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 Bank 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, the Bank shall reimburse Executive 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). In the case of an Event of Termination as defined in Section 4(b),
the payment period shall not exceed thirty-six (36) months.

 

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.

 

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,
the Bank shall pay to the Executive a lump sum cash amount equal to the cost to the Bank if the monthly Continuation Coverage Reimbursement
Payments were made, provided that doing so will not cause the Bank or any of its affiliates to incur any penalty or additional
tax for failure to comply with any applicable law.

 

		5.	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 Bank 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 Bank-sponsored insurance policies are less than Executive’s Base Salary.

 

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(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 Bank’s
employee benefit plans.

 

		6.	TERMINATION UPON RETIREMENT.

 

Termination by the Bank
of the Executive based on "Retirement" shall mean termination of Executive in accordance with any retirement policy established
with Executive's consent with respect to him. Upon termination of Executive upon 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 Bank and other
plans to which Executive is a party.

 

		7.	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 Bank, 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 President or the Board of such
deficiencies. Notwithstanding the 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 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 8 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).

 

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		8.	NOTICE.

 

(a)       Any
purported termination by the Bank 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. lf, 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. 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 Bank 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 as
provided in Section 18 of this Agreement. Notwithstanding the pendency of any such dispute, the Bank shall 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 Bank, and if it is determined in arbitration that Executive is not entitled to termination benefits pursuant
to this Agreement, he shall return all cash payments made to him pending resolution by arbitration, with interest thereon at the
prime rate as published in the Wall Street Journal from time to time if it is determined in arbitration that Executive's
voluntary termination of employment was not taken in good faith and not in the reasonable belief that grounds existed for his voluntary
termination.

 

		9.	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
9 during the term of this Agreement 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 Bank as may reasonably be required by the Bank in
connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

 

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(c)       Executive
recognizes and acknowledges that the knowledge of the business activities and plans for business activities of the Bank and affiliates
thereof, as they may exist from time to time, is a valuable, special and unique asset of the business of the Bank. 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 Bank 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 Bank relating to the Bank’s 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 Bank or the Bank’s business, without regard to whether any of such Confidential Information may be deemed confidential
or material to any third party, and the Bank 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 Bank, 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 employment with
the Bank for any reason, the Executive will return promptly to the Bank all memoranda, notes, records, reports, manuals, pricing
lists, prints and other documents (and all copies thereof) relating to the Bank’s business which he may then possess or have
with the Executive's control, regardless of whether any such documents constitute Confidential Information. The Executive further
agrees that he shall forward to the Bank all Confidential Information which at any time (including after the period of his employment
with the Bank) 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 Bank, 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 Bank 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 Bank (or any business proposed
to be conducted by the Bank 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

 

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		(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 Bank 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 twenty-four (24) months after the Executive's termination
of employment with the Bank), without the prior written consent of the Bank, 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 Bank to terminate his, her or its relationship with the Bank, or (ii) solicit (or attempt to
solicit), induce (or attempt to induce), cause or facilitate any supplier of services or products to the Bank to terminate or change
his, her or its relationship with the Bank, or otherwise interfere with any relationship between the Bank and any of the Bank’s
suppliers of products or services.

(f)       Executive
agrees not to in any way slander or injure the business reputation or goodwill of the Bank through any contact with customers,
vendors, suppliers, employees or agents of the Bank, 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 Bank’s 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 Bank (all of the
foregoing being referred to herein as “Work Product”) belong to the Bank. The Executive shall perform all actions reasonably
requested by the Bank (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 9 are reasonable and necessary to protect the legitimate interests
of the Bank. If the event of a breach or threatened breach by the Executive of any of the provisions of Section 9 hereof, the Bank
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 Bank 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 Bank at law or in equity.

(i)       In
the event any of the covenants contained in Section 9 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 Bank. 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.

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(j)       In
the event of a violation of this Section 9, the applicable time periods provided in Section 9(d) and (e) shall be tolled during
the time of such violation. No waiver of the provisions of this Section 9 shall be effective unless made in writing and signed
by the Chairman of the Bank’s Board of Directors on behalf of the Board.

 

		10.	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.

 

		11.	EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

 

This Agreement
contains the entire understanding between the parties hereto and supersedes any prior employment agreement between the Bank or
any predecessor of the Bank and Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to 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.

 

		12.	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 Bank and their respective successors and assigns.

 

		13.	MODIFICATION AND WAIVER.

 

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

 

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

 

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		14.	REQUIRED REGULATORY PROVISIONS.

 

(a)       The
Bank’s Board of Directors may terminate the Executive’s employment at any time, but any termination by the Bank’s
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 7 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) (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 Bank's obligations under this contract shall be suspended as of the date of service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion (i) pay 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 Bank 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 Bank 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 Bank 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.

 

		15.	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.

 

    11

     

    

		16.	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.

 

		17.	GOVERNING LAW.

 

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

 

	18. 	ARBITRATION.

 

Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators 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.

 

		19.	PAYMENT OF LEGAL FEES.

 

All reasonable legal fees
paid or incurred by Executive pursuant to any dispute or question of interpretation relating to this Agreement shall be paid or
reimbursed by the Bank, provided that the dispute or interpretation has been settled by Executive and the Bank or judicially resolved
in the Executive's favor.

 

		20.	SUCCESSOR TO THE BANK.

 

The Bank 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 Bank's
obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such
succession or assignment had taken place.

 

		21.	COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 409A.

 

If any compensation or
benefits provided by this Agreement may result in the application of Section 409A of the Code, the Bank shall, in consultation
with the Executive, modify the Agreement in the least restrictive manner necessary in order to exclude such compensation from the
definition of “deferred compensation” within the meaning of such Section 409A of the Code or in order to comply with
the provisions of Section 409A of the Code, other applicable provision(s) of the Code and/or any rules, regulations or other regulatory
guidance issued under such statutory provisions and without any diminution in the value of the payments to the Executive. Any payments
that qualify for the “short-term” deferral exception under Treasury Regulation Section 1.409A-l(b)(4), the “separation
pay” exception under Treasury Regulation Section 1.409A-l(b)(9)(iii) or any other exception under Section 409A of the Code
will be paid under the applicable exceptions to the greatest extent possible. Each payment under this Agreement shall be treated
as a separate payment for purposes of Section 409A of the Code. Anything in this Agreement to the contrary notwithstanding, if
at the time of the Executive’s separation from service within the meaning of Section 409A of the Code, the Executive is considered
a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that the Executive
becomes entitled to under this Agreement is considered deferred compensation subject to interest, penalties and additional tax
imposed pursuant to Section 409A of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be payable prior to the date that is the earlier of (i) six months and one day the Executive’s separation from
service or (ii) the Executive's death.

    12

     

    

 

The Bank 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. No interpretation of this Agreement which does not satisfy the requirements of Section
409A shall be 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]

    13

     

    

SIGNATURES

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

 

	 	 	 	 
	ATTEST:	 	WAYNE SAVINGS COMMUNITY BANK
	 	 	 	 
	 	 	 	 
	 	 	 	 
	/s/ Tara R. Snyder	 	By:	/s/Peggy J. Schmitz
	Secretary	 	 	Peggy J. Schmitz, Chair
	 	 	 	Board of Directors
	 	 	 	 
	 	 	 	 
	WITNESS:	 	:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	/s/ David L. Lehman	 	/s/ James R. VanSickle, II
	 	 	 	James R. VanSickle, II

 

 

 

 

	CONSENT OF GUARANTOR (PURSUANT

 TO SECTION TEN HEREOF)	 
	 	 
	WAYNE SAVINGS BANCSHARES, INC.	 
	 	 	 
	By:	/s/ Peggy J. Schmitz 	 
	 	Peggy J. Schmitz	 
	 	Chair	 
	 	Board of Directors	 

 

 

    14

     

    

 

Schedule 2(b)

 

Approved service and board memberships outside
the Bank and the Company:

 

 

 

 

 

 

 

 

    15

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