EMPLOYMENTAGREEMENT

o)  

Specified Employee.  “Specified Employee” means an employee who is a “Key Employee” if the Corporation’s stock is publicly traded on an established securities market.  An employee shall be a Specified Employee for the twelve-month period beginning on the April 1st following any calendar year in which the employee is a Key Employee.

a)  

The Corporation hereby employs the Executive as its President and Chief Operating Officer, and the Executive hereby accepts such employment and agrees to render such services to, and carry out such duties and responsibilities for, the Corporation, on the terms and conditions set forth in this Agreement.  The term of this Agreement shall be a period of two years commencing as of the date hereof (the “Commencement Date”), subject to earlier termination as provided herein.  Beginning on the day following the Commencement Date, and on each day thereafter, the term of this Agreement shall be extended for a period of one day in addition to the then-remaining term, provided that the Corporation has not given notice to the Executive in writing at least sixty (60) days prior to such day that the term of this Agreement shall not be extended further.  Reference herein to the term of this Agreement shall refer to both such initial term and any extended terms.  As part of the review by the Board of Directors of the Corporation on at least an annual basis whether to permit extensions of the term of this Agreement, the Board of Directors shall consider all relevant factors, including without limitation the Executive’s performance hereunder and the input of the Chairman of the Board of the Corporation, and shall determine whether to provide notice to the Executive that the term of this Agreement shall not be further extended.

b)  

During the term of this Agreement, the Executive shall render such executive services and carry out such duties and responsibilities consistent with his titles and as may be assigned to him from time to time by the Chairman of the Board of the Corporation.

a)  

The Executive shall devote his full time and attention and his best efforts to the performance of his duties and responsibilities under this Agreement.  During the term of this Agreement, the Executive shall not, at any time or place, either directly or indirectly, engage in any business or activity in competition with the business, affairs or interests of the Corporation or any of its subsidiaries or affiliates or be a director, officer, employee or consultant to any bank holding company, savings and loan holding company, bank, savings and loan association, credit union, thrift, savings bank, financial services provider or similar institution, wherever located.

b)  

For a period of two years from the Date of Termination relating to a termination by the Corporation of the Executive’s employment hereunder for Cause or a Disability or a termination by the Executive of his employment hereunder upon Retirement or without Good Reason, the Executive shall not, at any time or place, either directly or indirectly engage in any business or activity in competition with the business, affairs or interests of the Corporation or any of its subsidiaries or affiliates or be a director, officer, employee or consultant to any bank holding company, savings and loan holding company, bank, savings and loan association, credit union, thrift, savings bank, financial services provider or similar institution within a fifty (50) mile radius from any present or future office of either of the Employers or any of their subsidiaries or affiliates.

c)  

For purposes of this Agreement, directly or indirectly engaging in any business or activity in competition with the business, affairs or interests of the Corporation or any of its subsidiaries or affiliates includes, but is not limited to, serving or acting as an owner, partner, member, agent, beneficiary, employee, officer, director or consultant of any Person engaged in any banking, lending, financial services or other business, operation or activity in which the Corporation or any of its subsidiaries or affiliates is engaged or is actively developing or pursuing on the Date of Termination; except that nothing herein contained shall be deemed to prevent or limit the right of the Executive to invest any of his funds in the capital stock or other securities of any such Person whose stock or securities are publicly owned or are regularly traded on any national exchange so long as the Executive is not the beneficial owner of more than 1% of the outstanding capital stock or securities of such Person, nor shall anything herein contained be deemed to prevent or limit the right of the Executive to invest any of his funds in real estate.

d)  

All information relating to business of the Employers or any of their subsidiaries or affiliates including, but not limited to, that business obtained or serviced by the Executive, all customer lists, customer information, contact lists, asset, liability, loan, deposit and investment information, financial records or information, instruments, documents, papers, and other material used in connection with, and all trade secrets, estimates, projections, goals, strategies, techniques relating to, such business, shall be the exclusive property of the Employers or the subsidiary or affiliate.  The Executive shall maintain the confidentiality of all such information and material that is confidential, proprietary or not publicly available

e)  

The Executive agrees that, during his employment, and for a period of two years following the Date of Termination of the Executive’s employment hereunder for Cause, without Good Reason, upon Retirement or upon the occurrence of a Disability, the Executive:

shall not solicit any of the Employers’ past or current customers or clients for the benefit of anyone other than the Employers or their subsidiaries or affiliates;

shall not divulge the names of any of the Employers’ past or then current customers to any other Person; and

shall not, either directly or indirectly, induce or solicit any person to leave the employ of either of the Employers.

f)  

The provisions of Sections 3(b), 3(c) and 3(e) hereof shall be construed independent of any other provision of this Agreement and shall survive any termination of this Agreement.  The existence of any claim or cause of action of the Executive against the Corporation, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Corporation of Sections 3(b), 3(c) and 3(e) hereof.

g)  

The restrictions and covenants contained in this Section shall be deemed not to run during all periods of noncompliance, the intention of the parties hereto being to have such restrictions and covenants apply during the full periods specified herein.  The Corporation and the Executive understand, acknowledge and agree that the restrictions and covenants contained in this Section are reasonable in view of the Executive’s position at the Corporation, the competitive and confidential nature of the information of which the Executive has or will have knowledge and the competitive and the nature of the business in which the Corporation and its subsidiaries and affiliates are or may be engaged.

a)  

The Employers shall collectively compensate and pay the Executive for his services during the term of this Agreement at an aggregate minimum base salary of $220,000 per year (“Base Salary”), which may be increased from time to time in such amounts as may be determined by the Boards of Directors of the Employers and may not be decreased without the Executive’s express written consent.  In addition to his Base Salary, the Executive shall be entitled to receive during the term of this Agreement such bonus payments as may be determined by the Chairman of the Board of the Corporation.

b)  

During the term of this Agreement, the Executive shall be entitled to participate in and receive the benefits of any pension, retirement, profit sharing, equity based compensation, employee stock ownership or other similar plans made available to employees and executives of the Employers, to the extent commensurate with his position with the Employers, in accordance with the terms of the applicable plans and as fixed by the Boards of Directors of the Employers. The Corporation shall not make any changes in such plans which would adversely affect the Executive’s rights or benefits thereunder, unless such change is applicable to all executive officers of the Corporation and does not result in a proportionately greater adverse change in the rights of or benefits to the Executive as compared with any other executive officer of the Corporation.  Nothing paid to the Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Executive’s Base Salary.  Notwithstanding the foregoing or anything in this Agreement to the contrary, the Executive understands, acknowledges and agrees that the Employers may from time to time, in their sole discretion, amend, modify, replace, freeze, suspend or terminate any or all of the incentive compensation, pension or other retirement, profit sharing, equity based compensation, employee stock ownership, perquisite or other plans, benefits and privileges given to employees and executives of the Employers, as well as any other rules, policies or procedures applicable to executives of the Employers, but only so long as any such actions apply to all executive officers of the Corporation and do not result in a proportionately greater adverse change in the rights of or benefits to the Executive as compared with any other executive officer of the Corporation.

c)  

During the term of this Agreement, the Executive shall be entitled to paid annual vacation in accordance with the policies as established from time to time by the Boards of Directors of the Employers.  The Executive shall not be entitled to receive any additional compensation from the Employers for failure to take a vacation, nor shall the Executive be able to accumulate unused vacation time from one year to the next, except to the extent authorized by the Chairman of the Board of the Employers.

d)  

In the event the Executive’s employment is terminated due to Disability, Retirement or death, and provided the Executive is not otherwise receiving substantially similar benefits from another employer, consultant or otherwise, the Employers shall provide, at their cost and for the remaining term of this Agreement, all existing life and medical insurance coverage for the Executive (other than in the case of death) and his spouse at substantially similar levels of coverage and benefits as the Employers provide at such time for their then existing senior executives.

e)  

The Executive’s Base Salary, compensation, benefits and expenses shall be paid by and allocated between the Corporation and the Bank in the same proportion as the time and services actually expended by the Executive on behalf of each respective Employer.

f)  

During the term of this Agreement, the Employers shall provide suitable office space, desk, chairs, filing cabinets, telephones and other usual and customary office furniture, fixtures and equipment adequate for the performance of the duties and responsibilities assigned to the Executive hereunder.

g)  

During the term of this Agreement, the Employers shall provide to Executive the use of an automobile of Executive’s choice with an average annual lease cost not to exceed $12,000 per year.  The Employers agree to replace the automobile with a new one at Executive’s request no more often than once every two years.  Either of the Employers shall pay all automobile operating expenses incurred by the Executive in the performance of Executive’s duties hereunder.  Either of the Employers shall procure and maintain in force an automobile liability policy for the automobile with coverage, including Executive, in the minimum amount of $1,000,000 combined single limit on bodily injury and property damage.

h)  

During the term of this Agreement, the Employers shall provide to the Executive, at the Employer’s cost, all perquisites which all other senior executives of the Corporation are generally entitled to receive; provided, however, that the Executive understands and agrees that the Chief Executive Officer of the Corporation may receive perquisites that are different from those provided to the Executive or other senior executives of the Corporation.

Expenses.  The Employers shall reimburse the Executive or otherwise provide for or pay for all reasonable expenses incurred by the Executive in furtherance of or in connection with the business of the Employers, including, but not by way of limitation, travel expenses and all reasonable entertainment expenses (whether incurred at the Executive’s residence, while traveling or otherwise), subject to such reasonable documentation and other limitations and requirements as may be established by the Boards of Directors of the Employers.  If such expenses are paid in the first instance by the Executive, the Employers shall reimburse the Executive therefor.  Any such reimbursement of expenses provided in this Section 5 shall be made no later than December 31 of the year following the year in which the expense was incurred.

a)  

The Corporation shall have the right at any time, upon prior Notice of Termination, to terminate the Executive’s employment hereunder for any reason, including without limitation termination with or without Cause, upon a Disability or the election of the Corporation not to extend the term of this Agreement.  The Executive shall have the right at any time, upon prior Notice of Termination, to terminate his employment hereunder for any reason, including without limitation with or without Good Reason or upon Retirement.

b)  

In the event that (i) the Executive’s employment hereunder is terminated by the Corporation for Cause or upon the election of the Corporation not to extend the term of this Agreement or (ii) the Executive terminates his employment hereunder without Good Reason, the Executive shall in each such case have no right pursuant to this Agreement to any severance payments, compensation or other benefits for any period after the applicable Date of Termination.

c)  

In the event that the Executive’s employment hereunder is terminated as a result of a Disability, Retirement or the Executive’s death during the term of this Agreement, the Executive shall have no right pursuant to this Agreement to severance payments, compensation or other benefits for any period after the applicable Date of Termination, except as provided for in Section 4(d) hereof.

d)  

In the event that (i) the Executive’s employment hereunder is terminated by the Corporation without Cause or (ii) the Executive’s employment hereunder is terminated by the Executive (y) due to a material breach of this Agreement by the Corporation, which breach has not been cured within fifteen (15) days after a written notice of non-compliance has been given by the Executive to the Employers, or (z) for Good Reason, then the Corporation shall so long as the Executive does not breach this Agreement following the Date of Termination:

i)  

pay to the Executive, a cash severance amount equal to two times that portion of the Executive’s Average Annual Compensation paid by the Corporation, in two equal installments, with the first installment to be paid on the first business day of the month following the Executive’s Date of Termination and the second installment to be paid on the first anniversary of the Date of Termination; and

ii)  

maintain and provide for a period ending at the earlier of (A) the expiration of the remaining term of employment pursuant hereto prior to the Notice of Termination or (B) the date of the Executive’s employment by or affiliation with another employer, consultant or Person (provided that the Executive is entitled under the terms of such employment or affiliation to benefits substantially similar to those described in this subparagraph, at the same or lesser cost to the Executive as under the Corporation’s plans, programs and arrangements on the Date of Termination), the Executive’s continued participation in all group insurance, life insurance, health and accident insurance, disability insurance and other welfare benefit plans, programs and arrangements offered by the Corporation in which the Executive was entitled to participate immediately prior to the Date of Termination (and excluding (x) Base Salary, bonuses and other items of compensation included in Average Annual Compensation, (y) incentive compensation, pension or other retirement, profit sharing, equity based compensation, employee stock ownership or other similar plans, programs or arrangements of the Corporation, and (z) perquisites and any vehicle provided by the Corporation), provided that in the event that the Executive’s participation in any such plan, program or arrangement as provided in this subparagraph is barred, or during such period any such plan, program or arrangement is discontinued or the benefits thereunder are materially reduced, the Corporation shall arrange to provide the Executive with benefits substantially similar to those which the Executive was entitled to receive under such plans, programs and arrangements immediately prior to the Date of Termination.

e)  

If at the time of the Executive’s Separation from Service, for any reason other than death, the Executive meets the definition of a Specified Employee, payment of all amounts under subsections 6(d)(i), 6(d)(ii) and 7(a) shall be suspended for six (6) months following the Executive’s Separation from Service.  In such event, the first installment shall be paid on the first day following the end of the six-month suspension period.  The second installment shall be paid no later than January 15th of the calendar year following the year in which the first installment was paid.  If the Executive incurs a Separation from Service due to death, regardless of whether the Executive meets the definition of a Specified Employee, payment of his benefit shall not be suspended; provided, however, that the six-month suspension period shall not apply to the provision of any group insurance, life insurance, health and accident insurance or disability insurance under subsection 6(d)(ii).

f)  

Upon any termination of the Executive’s employment hereunder, the Executive covenants and agrees (i) to return promptly to the Corporation, at the Corporation’s headquarters, all confidential information or materials that are still in the Executive’s possession or control on his last day of employment with the Corporation or the location of which the Employee knows (including, but not limited to, any confidential information or materials contained on the Executive’s personal data assistant or personal or home computer), and (ii) to return promptly to the Corporation, at the Corporation’s headquarters, all vehicles, equipment, computers, credit cards, keys, access cards, passwords and other property of the Corporation that are still in the Executive’s possession or control on his last day of employment or the location of which the Employee knows, and to cease using any of the foregoing on and after his last day of employment.

a)  

If the payments and benefits pursuant to Section 6 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Employers (including, without limitation, the payments and benefits which the Executive would have the right to receive from the Bank pursuant to Section 6 of the Bank Agreement, before giving effect to any reduction in such amounts pursuant to Section 7 of the Bank Agreement), would constitute a “parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial Parachute Payment,” which includes the amounts paid pursuant to clause (i) below), then the Corporation shall pay to the Executive, a cash amount in two equal installments, with the first installment to be paid on the first business day of the month following the Date of Termination and the second installment to be paid on the first anniversary of the Date of Termination.  The cash amount shall be equal to the sum of the following:

i)  

the amount by which the payments and benefits that would have otherwise been paid by the Bank to the Executive pursuant to Section 6 of the Bank Agreement are reduced by the provisions of Section 7 of the Bank Agreement;

ii)  

twenty percent (or such other percentage equal to the tax rate imposed by Section 4999 of the Code) of the amount by which the Initial Parachute Payment exceeds the Executive’s “base amount” from the Employers, as defined in Section 280G(b)(3) of the Code, with the difference between the Initial Parachute Payment and the Executive’s base amount being hereinafter referred to as the “Initial Excess Parachute Payment”; and

iii)  

such additional amount (tax allowance) as may be necessary to compensate the Executive for the payment by the Executive of state and federal income and excise taxes on the payment provided under clause (ii) above and on any payments under this clause (iii).  In computing such tax allowance, the payment to be made under clause (ii) above shall be multiplied by the “gross up percentage” (“GUP”).  The GUP shall be determined as follows:

iv)  

Tax Rate

v)  

Notwithstanding the foregoing, if it shall subsequently be determined in a final judicial determination or a final administrative settlement to which the Executive is a party that the actual excess parachute payment as defined in Section 280G(b)(1) of the Code is different from the Initial Excess Parachute Payment (such different amount being hereafter referred to as the “Determinative Excess Parachute Payment”), then the Corporation’s independent tax counsel or accountants shall determine the amount (the “Adjustment Amount”) which either the Executive must pay to the Corporation or the Corporation must pay to the Executive in order to put the Executive (or the Corporation, as the case may be) in the same position the Executive (or the Corporation, as the case may be) would have been if the Initial Excess Parachute Payment had been equal to the Determinative Excess Parachute Payment.  In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive’s benefit.  As soon as practicable after the Adjustment Amount has been so determined, the Corporation shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the Corporation, as the case may be.

b)  

In each calendar year that the Executive receives payments of benefits under this Section 7, the Executive shall report on his state and federal income tax returns such information as is consistent with the determination made by the independent tax counsel or accountants of the Corporation as described above.  The Corporation shall indemnify and hold the Executive harmless from any and all losses, costs and expenses (including without limitation, reasonable attorneys’ fees, interest, fines and penalties) which the Executive incurs as a result of so reporting such information.  The Executive shall promptly notify the Corporation in writing whenever the Executive receives notice of the institution of a judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Section 7 is being reviewed or is in dispute.  The Corporation shall assume control, at its expense, over all legal and accounting matters pertaining to such federal tax treatment (except to the extent necessary or appropriate for the Executive to resolve any such proceeding with respect to any matter unrelated to amounts paid or payable pursuant to this Section) and the Executive shall cooperate fully with the Corporation in any such proceeding.  The Executive shall not enter into any compromise or settlement or otherwise prejudice any rights the Corporation may have in connection therewith without the prior consent of the Corporation.

a)  

The Executive shall not be required to mitigate the amount of any benefits hereunder by seeking other employment or otherwise, nor shall the amount of any such benefits be reduced by any compensation earned by the Executive as a result of employment by another employer after the Date of Termination or otherwise so long as the Executive has not breached this Agreement.  In the event of any breach of this Agreement by the Executive following the Date of Termination, the Executive shall immediately repay to the Corporation all severance payments paid to him under Section 6 hereof and all amounts paid to him under Section 7 hereof, plus interest at the rate of 10% per annum from the date of such breach until all such severance payments and other amounts have been repaid in full to the Corporation.

b)  

The specific arrangements referred to herein are not intended to exclude any other benefits which may be available to the Executive upon a termination of employment with the Employers pursuant to employee benefit plans of the Employers or otherwise.

Withholding.  All payments required to be made by the Corporation hereunder to the Executive shall be subject to the withholding of such amounts, if any, relating to taxes and other payroll deductions as the Corporation may reasonably determine should be withheld pursuant to any applicable law or regulation.

Assignability.  The Corporation may, without the consent of the Executive, assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any corporation, bank or other Person with or into which the Corporation may hereafter merge or consolidate or to which the Corporation may transfer all or substantially all of its assets, if in any such case such corporation, bank or other Person shall by operation of law or expressly in writing assume all obligations of the Corporation hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder.  The Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

Notice.  For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered by hand; (ii) sent by certified United States Mail, return receipt requested, first class postage pre-paid; (iii) sent by overnight delivery service; or (iv) sent by facsimile transmission if such fax is confirmed immediately thereafter by also mailing a copy of such notice or other communication by regular (not certified or registered) United States Mail, first class postage pre-paid, as follows:

a)  

To the Corporation:      CFS Bancorp, Inc.

b)  

To the Bank:                Citizens Financial Bank

c)  

To the Executive:          Daryl D. Pomranke

 

or to such other address or facsimile number as either party hereto may have furnished to the other in writing in accordance herewith.  The Executive shall promptly provide any changes to his address, telephone number and facsimile number to the Corporation.

 

All such notices and other communications shall be effective (i) if delivered by hand, when delivered; (ii) if sent by mail in the manner provided herein, two (2) business days after deposit with the United States Postal Service; (iii) if sent by overnight delivery service, on the next business day after deposit with such service; or (iv) if sent by facsimile transmission, on the date indicated on the fax confirmation page if such fax also is confirmed by regular (not certified or registered) United States mail.

Amendment; Waiver.  No provisions of this Agreement may be amended, modified, waived or discharged unless such amendment, modification, waiver or discharge is agreed to in writing and signed by the Executive and such officer or officers as may be specifically designated by the Board of Directors of the Corporation to sign on its behalf.  No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  The failure or delay of either party at any time to insist upon the strict performance of any provision of this Agreement or to enforce its or his rights or remedies under this Agreement shall not be construed as a waiver or relinquishment of the right to insist upon strict performance of such provision, or to pursue any of its rights or remedies for any breach hereof, at a future time.

Governing Law; Venue.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the substantive laws of the State of Indiana.  Any claim, demand or action relating to this Agreement shall be brought only in a state court located in Porter County, Indiana.  In connection with the foregoing, the parties hereto irrevocably consent to the jurisdiction and venue of such court and expressly waive any claims, defenses or objections of lack of jurisdiction of or proper or preferred venue by such court.

Nature of Obligations.  Nothing contained herein shall create or require the Corporation to create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent that the Executive acquires a right to receive benefits from the Corporation hereunder, such right shall be no greater than the right of any unsecured general creditor of the Corporation.

Headings.  The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect; provided, however, if any provision of Sections 3(b), 3(c) and 3(e) of this Agreement shall be determined by a court of competent jurisdiction to be unenforceable because of the provision’s scope, duration, geographic restriction or other factor, then such provision shall be considered divisible and the court making such determination shall have the power to reduce or limit (but not increase or make greater) such scope, duration, geographic restriction or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted by law, and such provision shall then be enforceable against the appropriate party hereto in its reformed, reduced or limited form.

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

Regulatory Prohibition.  Notwithstanding any other provision of this Agreement to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. §1828(k)) and the regulations promulgated thereunder, including 12 C.F.R. Part 359.  In the event of the Executive’s termination of employment with the Bank for Cause, all employment relationships and managerial duties with the Bank shall immediately cease regardless of whether the Executive remains in the employ of the Corporation following such termination.  Furthermore, following such termination for Cause, the Executive shall not, directly or indirectly, influence or participate in the affairs or the operations of the Bank.

Payment of Costs and Legal Fees and Reinstatement of Benefits.  In the event any dispute or controversy arising under or in connection with the Executive’s termination is resolved in favor of the Executive, whether by judgment, arbitration or settlement, the Executive shall be entitled to the payment of (a) all legal fees incurred by the Executive in resolving such dispute or controversy, and (b) any back-pay, including Base Salary, bonuses and any other cash compensation, employee benefits and any compensation and benefits due but not otherwise paid to the Executive under this Agreement.

Indemnification.  The Corporation shall provide the Executive (including his heirs, executors and administrators) with coverage under a standard directors’ and officers’ liability insurance policy at its expense, or in lieu thereof, shall indemnify the Executive (and his heirs, executors and administrators) to the fullest extent permitted under Indiana 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 Corporation (whether or not he continues to be a director or officer at the time of incurring such expenses or liabilities).  Such expenses and liabilities shall include, but shall not be limited to, judgments, court costs and attorneys’ fees and the cost of reasonable settlements.

Entire Agreement.  This Agreement embodies the entire agreement between the Corporation and the Executive with respect to the matters agreed to herein.  All prior agreements between the Corporation and the Executive with respect to the matters agreed to herein are hereby superseded and shall have no force or effect.  Notwithstanding the foregoing, nothing contained in this Agreement shall affect the Bank Agreement, which is being executed contemporaneously herewith.

Construction.  This Agreement shall be deemed to have been drafted by both parties hereto.  This Agreement shall be construed in accordance with the fair meaning of its provisions and its language shall not be strictly construed against, nor shall ambiguities be resolved against, any party.

Recitals.  The recitals or “Whereas” clauses contained on page 1 of this Agreement are expressly incorporated into and made a part of this Agreement.

Non-disparagement.  During the Executive’s employment with the Corporation and following any termination of the Executive’s employment with the Corporation, the Executive shall not publicly disparage or make or publish any negative statements or comments about the Corporation, any of the Corporation’s subsidiaries or affiliates or any of their respective products, services, directors, officers or employees.  During the Executive’s employment with the Corporation and following any termination of the Executive’s employment with the Corporation, and subject to applicable law, no executive officer of the Corporation or member of the Corporation’s Board of Directors shall publicly disparage or make or publish any negative statements or comments about the Executive.

Cooperation.  For a period of five (5) years following any termination of the Executive’s employment with the Corporation and upon the request of the Corporation or any of its subsidiaries or affiliates, the Executive shall reasonably cooperate, assist and make himself available (for testimony or otherwise) at appropriate times and places as reasonably determined by the Corporation or any of its subsidiaries or affiliates in connection with any claim, demand, action, suit, proceeding, discovery, examination, investigation or litigation by, against or affecting the Corporation or any of its subsidiaries or affiliates.  In connection with the foregoing, the Corporation shall pay the Executive a fee of $1,000 for each day that the Corporation or any subsidiary or affiliate of the Corporation requests the Executive to cooperate, assist or make himself available, and shall also reimburse the Executive for his reasonable out-of-pocket travel expenses that are approved in advance by the Chairman of the Corporation; provided, however, that the Corporation shall not pay such fee or reimburse for such expenses in connection with any claim, demand, action, suit or proceeding relating to this Agreement.

Certain Remedies.  The Executive agrees that the Corporation will suffer irreparable damage and injury and will not have an adequate remedy at law in the event of any actual, threatened or attempted breach by the Executive of any provision of Section 3.  Accordingly, in the event of a breach or a threatened or attempted breach by the Executive of any provision of Section 3, in addition to all other remedies to which the Corporation is entitled at law, in equity or otherwise, the Corporation shall be entitled to a temporary restraining order, a permanent injunction and/or a decree of specific performance of any provision of Section 3.  The parties agree that a bond posted by the Corporation in the amount of One Thousand Dollars ($1,000) shall be adequate and appropriate in connection with such restraining order or injunction and that actual damages need not be proved by the Corporation prior to it being entitled to obtain such restraining order, injunction or specific performance.  The foregoing remedies shall not be deemed to be the exclusive rights or remedies of the Corporation for any breach of or noncompliance with this Agreement by the Executive but shall be in addition to all other rights and remedies available to the Corporation at law, in equity or otherwise.