EMPLOYMENT AGREEMENT

THIS AGREEMENT is made and entered into this 29th day of October 2014, by and between WESBANCO BANK, INC. (hereinafter referred to as the “Bank”), CHARLOTTE A. ZUSCHLAG (hereinafter referred to as the “Executive”), and WESBANCO, INC., a West Virginia corporation (hereinafter referred to as “Wesbanco”).

WHEREAS, the Executive currently serves as an as executive officer of ESB Bank, a Pennsylvania chartered savings bank (hereinafter referred to as “ESB”), and ESB Financial Corporation, a Pennsylvania corporation (hereinafter referred to as “ESB Financial”);

WHEREAS, ESB Financial, ESB, Wesbanco and the Bank are concurrently entering into an Agreement and Plan of Merger dated October 29th, 2014, providing for the merger of ESB Financial with and into Wesbanco (the “Merger”) and the merger of ESB with and into the Bank;

WHEREAS, the Executive is a party to an Amended and Restated Employment Agreement with ESB dated November 20, 2012 (the “ESB Employment Agreement”), and an Amended and Restated Employment Agreement with ESB Financial dated November 20, 2012, (the “ESB Financial Employment Agreement”), both of which agreements the Executive agrees will be terminated as of the Effective Time of the Merger (as defined in the Merger Agreement) (the “Effective Date”) pursuant to a separate Separation Agreement and Release and Waiver of Claims being concurrently entered into by and among ESB Financial, ESB, Wesbanco and the Bank (the “Separation Agreement”);

WHEREAS, the parties agree that the Executive shall have a separation from service for purposes of Section 409A of the Internal Revenue Code (the “Code”) effective as of the Effective Date of the Merger;

 

 

 

WHEREAS, the Bank wishes to assure itself of the Employee's employment and continuing services after the Merger in an executive capacity with the Bank, effective as of the Effective Date of the Merger and for the period described herein at a level of bona fide services reasonably anticipated to be at a level equal to 20% or less of the average level of services provided to ESB Financial and ESB during the 36 month period immediately preceding the Effective Date of the Merger;

WHEREAS, the Executive is willing to provide such services in accordance with the terms and conditions of this Agreement and to provide assurances of her continued employment during the period specified in this Agreement;

WHEREAS, the parties to this Agreement mutually agree that the terms and conditions of this Agreement will become effective only upon the consummation of the Merger and the termination of the ESB Employment Agreement and the ESB Financial Employment Agreement; and

WHEREAS, Wesbanco recognizes the Executive’s ability to contribute to the smooth integration of ESB into the Wesbanco group following the Merger and desires to provide for the continued employment of the Executive for a period of time after the Merger;

NOW, THEREFORE, THIS AGREEMENT WITNESSETH:  That for and in consideration of the mutual promises and covenants hereinafter contained, the parties hereto do hereby agree as follows:

1. EMPLOYMENT PERIOD. The Bank agrees to employ the Executive as its Development Officer for the Pittsburgh market (“Development Officer”), and the Executive agrees to work in the employ of the Bank, subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date of the Merger and ending when she attains the age of 70 (the “Employment Period”). The parties agree that the position of Development Officer is a position that requires substantial skill, training and knowledge generally and more particularly of the operations, employees, customers and the banking market in the Pittsburgh,

 

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Pennsylvania area where the Executive will be employed and that the annual compensation set forth in Section 2(b) is reasonable compensation in light of those requirements. The parties also acknowledge that the Executive will be supervised in her performance of these duties by senior management of the Bank and that, as supervised, her position will be different and her job description will be changed and reduced accordingly.

 

(a) Position and Duties.

 

(i) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled under the policies of the Bank giving credit, for these purposes, to the Executive for her years of service with ESB, the Executive shall devote such time and attention to the business of the Bank as conducted in the Pittsburgh market and to the successful integration of the then former ESB into the business and operations of the Bank, including, but not limited to the preservation of the reputation, customers and employees of ESB as the reputation, customers and employees of the Bank, and such other tasks and duties that are commensurate with the Executive’s title, status, skills and experience, that may, from time to time, be assigned by the Board of Directors of the Bank (the “Board”), and are consistent with the tasks and duties performed by the Executive prior to the Effective Date of the Merger, except that the Executive shall not be designated as a chief executive officer and shall not be required to perform any more than 20% of her previous duties. The parties reasonably expect that the Executive’s services under this Agreement will not exceed approximately 15 hours per month.

 

(ii) The Executive’s employment duties with the Bank shall be performed substantially at the site of ESB’s offices and branches in the Pittsburgh, Pennsylvania market, excepting such business meetings with the Bank managers in Wheeling, West Virginia on reasonable notice, and meetings of the Bank Board of Directors as shall be deemed appropriate by the Bank.  The Bank shall continue to provide the Executive with office, secretarial and other administrative support that is substantially comparable to that in effect prior to the Effective Date of the Merger.  All expenditures in connection with the Executive’s performance of her duties shall be reimbursed in accordance with the Bank’s regular policy, including, but not limited to, costs and expenses incurred in attending meetings in Wheeling, West Virginia.

 

(iii) The Executive may devote reasonable time to activities such as supervision of personal investments and activities involving professional, charitable, educational, religious and similar types of activities, speaking engagements and membership on other boards of directors, provided such activities do not interfere in any material way with the business of the Bank.  The time involved in such activities shall not be treated as vacation time.  The Executive shall be entitled to keep any amounts paid to her in connection with such activities (e.g., director fees and honoraria).

 

(iv) Compensation.  During the Employment Period, the Executive shall receive an annual base salary (“Base Salary”) of $25,000, payable in equal biweekly installments.

 

(b) Benefits. During the Employment Period, the Executive shall continue to receive employee benefits and perquisites comparable to those that Wesbanco provides to its executive officers, including but not limited to participation in all insurance plans, provided that the Bank shall pay any employee portion of the insurance premiums with respect to coverage during the first three years of the Employment Period.  The Bank shall provide or cause to be provided death and disability benefits with respect to the Executive as follows:

 

(i) Death Benefit.  In the event the Executive dies prior to reaching age 70, the Bank shall pay directly from the general assets of the Bank or cause to be paid through a policy of life insurance purchased for such purpose by the Bank (but not including any group-term life insurance provided as an employee benefit in accordance with company policy) or a combination of the foregoing, in each case as determined by the Bank, to the estate of the Executive promptly after the Bank receives notice of the Executive's death, a death benefit in a lump sum cash amount equal to $150,000.00 less the aggregate amount of all payments made to the Executive under Section 2 of this Agreement prior to the date of her death.

 

(ii) Disability Benefit.  If the Executive becomes Disabled (as defined below) prior to reaching age 70, the Bank shall pay directly from its general assets or through a policy of disability insurance purchased by the Bank for such purpose (but not including any long-term disability insurance provided as an employee benefit in accordance with company policy) or a combination of the foregoing, in each case as determined by the Bank, a disability benefit equal in aggregate amount to $150,000.00 less the aggregate amount of all payments made to the Executive under Section 2 of this Agreement prior to the date of her Disability.  For purposes of this Agreement, “Disability” shall mean the inability of the Executive to provide services under this Agreement for reasons relating to a physical or mental injury, disease or condition as determined by a physician selected by the Executive.  The date of the Disability as determined by such physician shall be the “Disability Effective Date”.  Disability benefits shall be paid in a lump sum.

 

3. TERMINATION OF EMPLOYMENT.

 

(a) Date of Termination.  “Date of Termination of Employment” shall be (i) if the Executive’s employment is terminated by the Bank for any reason, the date of receipt of the Notice of Termination or any other date specified by Wesbanco in such Notice of Termination; (ii) if the Executive’s employment is terminated by the Executive’s resignation, the date of receipt of the Notice of Resignation; and (iii) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

 

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(b) Death or Disability.  The Executive’s employment and consulting obligations shall terminate automatically upon the Executive’s death.

 

(c) Resignation.  The Executive may terminate her employment and her consulting obligations by resigning, provided that she gives the Bank at least 10 days prior written notice.  If the Executive resigns without Good Reason, the Bank will owe the Executive only (i) Base Salary earned or accrued through the date of such resignation, (ii) any unreimbursed business expenses incurred by the Executive on the Bank’s behalf, (iii) any unpaid accrued vacation, and (iv) any other amounts required to be paid under any benefit plan or program in which the Executive participates or any other amounts mandated by law.

 

(d) Notice of Termination.  Any termination by the Bank or by the Executive shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 14(a).

 

4.	OBLIGATIONS OF THE PARTIES UPON EMPLOYMENT TERMINATION.

 

(a) Obligations of the Bank.

 

(i) If the Executive’s employment and/or consulting obligations terminate by reason of her death or Disability, the Bank shall pay or cause to be paid the Death Benefit or the Disability Benefit, as the case may be.  If the Executive’s employment shall be terminated by the Bank for any reason other than Cause or by the Executive for Good Reason (as such terms are defined below) during the Employment Period, the Bank shall pay to the Executive in a lump sum in cash within 10 days:  (A) all Base Salary that would have been payable to the Executive during the Employment Period, (B) any unreimbursed business expenses incurred by the Executive on the Bank’s behalf, (C) any unpaid accrued vacation, and (D) any other amounts required to be paid under any benefit plan or program in which the Executive participates or any other amounts mandated by law.

 

(ii) To the extent not theretofore paid or provided, the Bank shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or that the Executive is eligible to receive under any plan, program, policy or practice or other contract or agreement of the Bank and its affiliated companies.

 

(iii) The Executive shall be entitled to be reimbursed her reasonable and necessary business expenses incurred in connection with any services to be performed hereunder.

 

(b) Obligations of the Executive.  In addition to the confidentiality obligations set forth in Section 5, if the Executive’s employment terminates for any reason other than death, Disability, Cause or Resignation for Good Reason, the Executive shall provide consulting services to the Bank until reaching age 70.  In such event, the Executive shall render consulting services at such times and in such places as are mutually agreeable and with reasonable notice and for such consulting fees as are mutually agreed to by the parties (the “Consulting Fees”).  It

 

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the Code or any successor or substitute provision (the "Excise Tax"), then Wesbanco shall pay to the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Payments and any federal, state and local income taxes, employment-related taxes (including Social Security and Medicare taxes) and Excise Tax on the Gross-Up Payment, shall be equal to the Payments.

 

(b)           All determinations required to be made under this Section 9, and the assumptions to be utilized in arriving at such determination, shall be made by the certified public accounting firm used for auditing purposes by Wesbanco immediately prior to the Executive's separation from service (the "Accounting Firm"), which shall provide detailed supporting calculations both to Wesbanco and the Executive.  Wesbanco shall pay all fees and expenses of the Accounting Firm.  Any determination by the Accounting Firm shall be binding upon Wesbanco and the Executive, except as provided in subparagraph (c) below.

 

(c)           As a result of the uncertainty in the application of Sections 280G and 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the Internal Revenue Service ("IRS") or other agency will claim that a greater or lesser Excise Tax is due.  In the event that the Excise Tax is finally determined to be less than the amount taken into account hereunder in calculating any Gross-Up Payment, the Executive shall repay to Wesbanco, within thirty (30) days following the date that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income taxes and employment-related taxes imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or local income tax or employment-related tax), plus interest on the amount of such repayment at 120% of the short-term applicable federal rate provided in Section 1274(b)(2)(B) of the Code.  In the event that the Excise Tax is determined to exceed the amount taken into account hereunder in calculating the initial Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the initial Gross-Up Payment), which initial Gross-Up Payment may be zero, Wesbanco shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined.

 

(d)           In each calendar year that the Executive receives payments of benefits that constitute a parachute amount, the Executive shall report on her state, local and federal income tax returns such information as is consistent with the determination made by the Accounting Firm as described above.  Wesbanco 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, with such indemnification to be paid by Wesbanco to the Executive as soon as practicable and in any event within thirty (30) days following the date the amount subject to indemnification was determined.  The Executive shall promptly notify Wesbanco 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 8 is being reviewed or is in dispute.  The

 

 

 

 

 

                        /s/ Charlotte A. Zuschlag

CHARLOTTE A. ZUSCHLAG

WESBANCO, INC.

By: /s/ Todd F. Clossin

Its President/CEO

WESBANCO BANK, INC.

By: /s/ Todd F. Clossin

Its President/CEO