Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): August 5, 2010 (July 30,
2010)
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RURBAN FINANCIAL CORP.
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(Exact name of registrant as specified in its
charter)
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Ohio
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0-13507
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34-1395608
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(State
or other jurisdiction
of
incorporation or organization)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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401 Clinton Street, Defiance, Ohio
43512
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(Address
of principal executive offices) (Zip Code)
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(419) 783-8950
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(Registrant’s
telephone number, including area code)
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Not Applicable
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(Former
name or former address, if changed since last report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02.
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Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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On July
30, 2010, Rurban Financial Corp. (the “Company”) entered into an Employment
Agreement (the “Employment Agreement”) and a Second Amended and Restated Change
of Control Agreement (the “Amended Change of Control Agreement) with Mark A.
Klein, its President and Chief Executive Officer.
Employment
Agreement
The
Employment Agreement is effective July 30, 2010 (the “Effective Date”) and
continues until the third anniversary of the Effective Date, unless earlier
terminated in accordance with its terms. Following the first
anniversary of the Effective Date, and on each anniversary thereafter, the
Employment Agreement will automatically renew for an additional one-year period
unless either party gives one hundred and eighty (180) days prior written notice
of its intent not to renew the term.
Under the terms of the Employment
Agreement, Mr. Klein will:
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receive
an annual base salary of $219,000, which amount may be increased from time
to time by the Company’s Board of Directors (the
“Board”);
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be
eligible to receive an incentive bonus payment in an amount and payable at
such time or times as determined by the
Board;
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be
entitled to participate in all benefit plans of the Company that are
available to actively employed and similarly situated employees of the
Company;
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be
reimbursed for all reasonable travel, industry, entertainment, and
out-of-pocket and miscellaneous expenses incurred in connection with the
performance of business activities on behalf of the
Company;
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be
entitled to continue use of any vehicle provided by the Company as of the
Effective Date and be entitled to a replacement vehicle or vehicle
allowance if determined by the Board;
and
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be
covered by any liability insurance policy that the Company elects to carry
from time to time covering directors and
officers.
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Upon (a) the expiration of the term,
(b) Mr. Klein’s voluntarily
termination of employment, (c) Mr. Klein’s termination for “cause”, or (d) Mr.
Klein’s death or disability, Mr. Klein, or, if applicable, Mr. Klein’s
estate or beneficiaries, will receive any base salary that is accrued but unpaid
and any business expenses that are unreimbursed as of such date.
For purposes of the
Employment Agreement, the Company will have “cause” to terminate Mr. Klein’s
employment due to Mr.
Klein’s: (a) willful
failure to substantially perform his duties (other than as a result of
disability or death) unless cured within twenty (20) days after notice from the
Company; (b) willful engagement in
misconduct injurious to the
Company; (c) dishonesty,
insubordination, or gross negligence in the performance of his
duties; (d) breach of
fiduciary duty involving personal profit; (e) violation of any law, rule or
regulation governing issuers of publicly traded securities or banks or bank
officers or any regulatory enforcement actions issued by a regulatory authority against
him; (f) conduct which
brings public discredit to the Company, unless cured within twenty (20) days
after notice by the Company; (g) conviction of or plea of guilty or
nolo contendere to a felony or a crime originally charged as a felony and
reduced to a misdemeanor as a result of a plea bargain, crime of falsehood, or
crime involving moral turpitude, or actual incarceration for a period of
twenty (20) consecutive
days or more; (h) actions
affecting any of the Company’s employees, customers, business associates,
contractors or visitors that an independent third party decides constitutes
unlawful discrimination or harassment or violation of the Company’s policy
concerning discrimination
or harassment; (i) theft or
abuse of the Company’s property or the property of the Company’s customers,
employees, contractors,
vendors or business associates; (j) removal at the direction or
recommendation of a state or federal bank regulatory authority; (k) willful
failure to follow the good faith, lawful instructions of the Board with regard
to its operations, unless such failure is cured within twenty (20) days after
notice of the failure is given; (l) material breach of any contract or
agreement entered into with the Company, unless such breach is
cured within twenty (20) days after notice of the breach is
given; and (m) unauthorized
disclosure of the trade secrets of any confidential information of the Company,
its affiliates, trade partners or vendors.
The
Employment Agreement provides for additional severance benefits in the event
that Mr. Klein’s employment
is terminated by the Company without cause or by him for “good
reason.” In such event, Mr. Klein will be entitled to continue to receive his base salary for
a period of two (2) years
after termination, and will also be entitled to continue his
participation in all Company health, dental and vision plans for twelve (12)
months.
For
purposes of the Employment Agreement, Mr. Klein will have “good reason” to
terminate his employment with the Company if: (a) he is assigned
duties and responsibilities inconsistent with his status as Chief Executive
Officer, unless he has been promoted to a more senior position and been assigned
substantive duties associated with that position; (b) he is required to move his
office more than fifty (50) miles from the Company’s principal executive office;
(c) his base salary is reduced, other than as a result of a national financial
depression or national or bank emergency when such reduction has been
implemented for the Company’s senior management; (d) he is required to report to
a corporate officer or employee instead of reporting to the Board; (e) the
Company fails to obtain the assumption of the Employment Agreement by a
successor; or (f) the Company materially breaches the Employment Agreement or
unsuccessfully attempts to terminate him for “cause.”
If,
within six (6) months following Mr. Klein’s termination, the Company later
discovers that cause existed to terminate his employment, Mr. Klein will forfeit
any right to severance benefits and will be required to repay any previous
payments of severance benefits if requested by the Board. In
addition, if the Company is required to prepare an accounting restatement due to
material non-compliance as a result of Mr. Klein’s misconduct, Mr. Klein will
reimburse the Company for all incentive compensation received during the twelve
(12) month period preceding the date of restatement.
Mr. Klein’s rights in the event of
a change of control of the Company are determined exclusively under the Change
of Control Agreement.
During Mr. Klein’s employment with
the Company and for a period of twelve (12) months following his termination,
Mr. Klein may not (a) directly or indirectly, engage in any activity carried on
by the Company or an affiliate within fifty (50) miles of the Company’s
principal place of business or office maintained by an affiliate, (b) solicit,
on behalf of himself or any other person or entity that competes with the
Company or any current or future affiliate, any customer, or referral source,
(c) interfere with any contractual relationship between the Company and any
affiliate and any customer or referral source, or (d) induce any person who is
an employee, officer or agent of the Company or affiliate on the date of
termination or who was an employee, officer or agent of the Company or an
affiliate during any of the twelve (12) months preceding the date of
termination, to terminate such relationship. In addition, following
his termination, Mr. Klein will (i) not communicate or divulge any
non-public information, knowledge or data relating to the Company and its
business to any other person or entity, (ii) assign all intellectual property to
the Company, (iii)
return all Company property
to the Company, and (iv) cooperate with and assist the Company in any matter
following his termination, if requested. Finally, neither Mr. Klein nor the
Company will disparage the other following his
termination.
The foregoing description of the
Employment Agreement does not purport to be complete and is qualified in its
entirety by reference to the Employment Agreement, a copy of which is attached
hereto as Exhibit 10.1 and incorporated herein by
reference.
Amended Change of Control
Agreement
The Company
and Mr. Klein entered into the Amended Change of Control Agreement effective
July 30, 2010, for the purpose of: (a) reflecting Mr. Klein’s new
position as President and Chief Executive Officer of the Company; (b) amending
the definition of “Good Reason” to make it consistent with Mr. Klein’s
Employment Agreement; (c) increasing the amount of severance payable under the
Amended Change of Control Agreement from 2.0 times Mr. Klein’s “Annual Direct
Salary” (as defined in the Amended Change in Control Agreement) to 2.99 times
Mr. Klein’s Annual Direct Salary; (d) increasing the period during which Mr.
Klein will be eligible to continue participating in the Company’s welfare
benefit plans following his termination from two (2) years to three (3) years;
and (e) removing the Company’s subsidiary, The State Bank and Trust Company, as
a party to the Amended Change of Control Agreement.
The
foregoing description of the Amended Change of Control Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Amended Change of Control Agreement, a copy of which is attached hereto as
Exhibit 10.2 and incorporated herein by reference.
Item
9.01. Financial
Statements and Exhibits.
(a) --
(c) Not applicable.
(d) Exhibits.
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10.1
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Employment
Agreement, dated July 30, 2010, between Rurban Financial Corp. and Mark A.
Klein
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10.2
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Second
Amended and Restated Change of Control Agreement, dated July 30, 2010,
between Rurban Financial Corp. and Mark A.
Klein
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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RURBAN
FINANCIAL CORP. |
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Dated: August
5, 2010
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By:
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/s/ Anthony V. Cosentino |
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Anthony
V. Cosentino |
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Executive
Vice President and Chief Financial Officer
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Current
Report on Form 8-K
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Exhibit No.
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Description
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10.1
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Employment
Agreement, dated July 30, 2010, between Rurban Financial Corp. and Mark A.
Klein
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10.2
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Second
Amended and Restated Change of Control Agreement, dated July 30, 2010,
between Rurban Financial Corp. and Mark A. Klein
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