LNB BANCORP, INC.
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(Exact name of registrant as specified in its charter)
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Ohio
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0-13203
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34-1406303
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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457 Broadway, Lorain, Ohio
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44052-1769
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(Address of principal executive offices)
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(Zip Code)
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(Former name or former address, if changed since last report.)
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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Exhibit No.
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Description
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10.1
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Supplemental Executive Retirement Agreement, dated as of March 26, 2013, by and between LNB Bancorp, Inc. and Daniel E. Klimas.
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10.2
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Rabbi Trust Agreement, dated as of March 28, 2013, by and between LNB Bancorp, Inc. and U.S. Bank National Association.
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10.3
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Change in Control Supplemental Executive Compensation Agreement, dated as of March 28, 2013, by and between LNB Bancorp, Inc. and Gary J. Elek.
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LNB BANCORP, INC. | ||||
(Registrant) | ||||
Date: March 29, 2013
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By: |
/s/ Gary J. Elek
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Gary J. Elek
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Chief Financial Officer
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Exhibit No.
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Description
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10.1
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Supplemental Executive Retirement Agreement, dated as of March 26, 2013, by and between LNB Bancorp, Inc. and Daniel E. Klimas.
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10.2
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Rabbi Trust Agreement, dated as of March 28, 2013, by and between LNB Bancorp, Inc. and U.S. Bank National Association.
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10.3
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Change in Control Supplemental Executive Compensation Agreement, dated as of March 28, 2013, by and between LNB Bancorp, Inc. and Gary J. Elek.
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(a)
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Prior to Retirement. In the event of the Executive’s death prior to his Separation from Service, the Executive’s Beneficiary shall be entitled to receive an amount equal to the Present Value of the Retirement Benefit (including any cost of living adjustments that would have been made pursuant to Section 2.5(b) hereof) paid to the Executive’s Beneficiary in a lump sum no later than thirty (30) days following the date of the Executive’s death.
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(b)
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After Retirement. In the event of the Executive’s death after his Separation from Service, and during the period he is receiving the Retirement Benefit, the payment of the Present Value of any unpaid amount of the Retirement Benefit (including any cost of living increases that would have otherwise been made pursuant to Section 2.5(b) hereof) shall be accelerated and paid in a lump sum to the Executive’s Beneficiary no later than thirty (30) days following the date of the Executive’s death.
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(a)
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Separation of Service Within Two Years After a Change in Control. If the Executive incurs a Separation from Service during the two-year period following a Change in Control (the “Change in Control Period”), then the Executive shall be entitled to receive an amount equal to the Present Value of the Retirement Benefit (including any cost of living adjustments that would have been made pursuant to Section 2.5(b) hereof) paid in a lump sum on the first payroll date of the seventh (7th) month following the date of the Executive’s Separation from Service; provided that the Retirement Benefit will be increased by a rate of two percent (2%) for each full year by which the Executive’s Separation from Service follows the date of his Normal Retirement Age.
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(b)
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Change in Control After Retirement. In the event of a Change in Control after the Executive’s Separation from Service, and during the period he is receiving the Retirement Benefit, the payment of the Present Value of any unpaid amount of the Retirement Benefit (including any cost of living increases that would have otherwise been made pursuant to Section 2.5(b) hereof) shall be accelerated and paid in a lump sum to the Executive no later than thirty (30) days following the date of the Change in Control or the first payroll date of the seventh (7th) month following the date of the Executive’s Separation from Service.
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(c)
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Separation of Service After the Change in Control Period. If the Executive’s Separation from Service occurs after the Change in Control Period, then any Retirement Benefit will be paid pursuant to Sections 2.1 and 2.5 of this Agreement.
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(a)
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paid in equal monthly installments in accordance with the Employer’s normal payroll practices during the seven-year period following the Executive’s Separation from Service (the “Payment Period”), subject to Section 2.6 of this Agreement; and
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(b)
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increased each year of the Payment Period by three percent (3%) as a cost of living adjustment.
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(a)
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Payments subject to Code Section 162(m). If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).
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(b)
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Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Code is not treated as a violation of law.
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(c)
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Solvency. Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Employer to continue as a going concern.
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(a)
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must take effect not less than twelve (12) months after the amendment is made;
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(b)
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must, for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made;
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(c)
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must, for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution is scheduled to begin; and
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(d)
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may not accelerate the time or schedule of any distribution.
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(a)
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Initiation – Written Claim. The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.
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(b)
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Timing of Administrator Response. The Administrator shall respond to such Claimant within ninety (90) days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional ninety (90) days by notifying the Claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.
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(c)
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Notice of Decision. If the Administrator denies part or all of the claim, the Administrator shall notify the Claimant in writing of such denial. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a description of any additional information or material necessary for the Claimant to perfect the claim and an explanation of why it is needed; (iv) an explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and (v) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.
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(a)
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Initiation – Written Request. To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Board a written request for review.
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(b)
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Additional Submissions – Information Access. The Claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Board shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.
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(c)
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Considerations on Review. In considering the review, the Board shall take into account all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
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(d)
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Timing of Administrator Response. The Board shall respond in writing to such Claimant within sixty (60) days after receiving the request for review. If the Board determines that special circumstances require additional time for processing the claim, the Board can extend the response period by an additional sixty (60) days by notifying the Claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Board expects to render its decision.
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(e)
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Notice of Decision. The Board shall notify the Claimant in writing of its decision on review. The Board shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (a) the specific reasons for the denial; (b) a reference to the specific provisions of this Agreement on which the denial is based; (c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and (d) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).
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(a)
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Corporate Dissolution or Bankruptcy. The Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.
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(b)
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Change in Control. The Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable action to terminate the arrangements.
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(c)
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Discretionary Termination. The Employer may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Employer; (ii) all arrangements sponsored by the Employer and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Employer takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Employer takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Employer takes the irrevocable action to terminate this Agreement.
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LNB BANCORP, INC. | |||
/s/ Gary J. Elek | |||
By: | Gary J. Elek | ||
Its: | Chief Financial Officer | ||
DANIEL E. KLIMAS | |||
/s/ Daniel E. Klimas |
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1.
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Company provides written direction to Trustee to make any such missed payment no later than thirty (30) days following the date such payment was otherwise due to the Plan participant under the terms of the Plan; or
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2.
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Such failure by Company to make any such payment occurs in connection with a change in Company’s financial health, within the meaning of Tax Code Section 409A(b)(2).
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A.
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twenty percent (20%) or more of any class of equity security of Company entitled to vote as a single class in the election or removal from office of directors, or
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B.
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twenty percent (20%) or more of the voting power of any group of classes of equity securities of the Company entitled to vote as a single class in the election or removal from office of directors;
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U.S. BANK NATIONAL ASSOCIATION | ||||
By: | /s/ Terry W. Schwartz | |||
Title: | Vice President and Relationship Manager | |||
LNB BANCORP, INC.
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By: | /s/ Gary J. Elek | |||
Title: | Chief Financial Officer | |||
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·
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LNB Bancorp, Inc. Supplemental Executive Retirement Agreement, dated as of March 26, 2013, by and between LNB Bancorp, Inc. and Daniel E. Klimas.
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consent to Disclosure.
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objection to Disclosure.
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LNB BANCORP, INC.
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By:
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Its:
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Dated:
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(a)
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"Bonus Amount" means the highest annual incentive bonus earned by Executive from the Company (or its Subsidiaries) during the last three (3) completed fiscal years of the Company immediately preceding Executive’s Date of Termination.
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(b)
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"Cause" means any one or more of the following: (i) the willful and continued failure of Executive to perform substantially Executive's duties with the Company or its Subsidiaries (other than any such failure resulting from Executive's Disability or any such failure subsequent to Executive being delivered a Notice of Termination without Cause by the Company or its Subsidiaries or after Executive delivering a Notice of Termination for Good Reason to the Company or its Subsidiaries) after a written demand for substantial performance is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive's duties and provides Executive with ten (10) business days to correct such failure; or (ii) the willful engaging by Executive in illegal conduct or gross misconduct which is injurious to the Company or its Subsidiaries; or (iii) the conviction of Executive of, or a plea by Executive of nolo contendere to, a felony; or (iv) Executive's breach of or failure to perform any of the non-competition and non-disclosure covenants contained in Section 11 of this Agreement or contained in any other document signed by Executive and by the Company (or any Subsidiary). For purposes of this paragraph (b), no act or failure to act by Executive shall be considered "willful" unless done or omitted to be done by Executive in bad faith and without reasonable belief that Executive's action or omission was in the best interests of the Company and its Subsidiaries. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company, or based upon the instructions of the Company's chief executive officer or another senior officer of the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company and its Subsidiaries.
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(c)
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"Change in Control" means the occurrence of any one of the following events:
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(i)
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if individuals who, on the date of this Agreement, constitute the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board; provided, however, that: (A) any person becoming a director subsequent to the date of this Agreement, whose election or nomination for election was approved by a vote of at least two-thirds (2/3) of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection by such Incumbent Directors to such nomination), shall be deemed to be an Incumbent Director; and (B) no individual elected or nominated as a director of the Company initially as a result of an actual or threatened election contest with respect to directors or any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;
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(ii)
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if any "person" (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company's then-outstanding securities eligible to vote for the election of the Board (the "Company Voting Securities"); provided, however, that the events described in this clause (ii) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company or any Subsidiary; (B) by any employee benefit plan sponsored or maintained by the Company or any Subsidiary or by any employee stock benefit trust created by the Company or any Subsidiary; (C) by any underwriter temporarily holding securities pursuant to an offering of such securities; (D) pursuant to a Non-Qualifying Transaction (as defined in clause (iii) of this paragraph (c), below); (E) pursuant to any acquisition by Executive or by any group of persons including Executive (or any entity controlled by Executive or any group of persons including Executive); or (F) a transaction (other than one described in clause (iii) of this paragraph (c), below) in which Company Voting Securities are acquired from the Company, if a majority of the Incumbent Directors approves a resolution providing expressly that the acquisition pursuant to this subparagraph (F) does not constitute a Change in Control under this clause (ii);
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(iii)
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upon the consummation of a merger, consolidation, share exchange or similar form of corporate transaction involving the Company or any of its Subsidiaries that requires the approval of the Company's shareholders, whether for such transaction or the issuance of securities in the transaction (a "Business Combination"), unless immediately following such Business Combination: (A) more than fifty percent (50%) of the total voting power of either (1) the corporation resulting from the consummation of such Business Combination (the "Surviving Corporation") or, if applicable, (2) the ultimate parent corporation that directly or indirectly has beneficial ownership of one hundred percent (100%) of the voting securities eligible to elect directors of the Surviving Corporation (the "Parent Corporation") is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination; (B) no person (other than any employee benefit plan sponsored or maintained by the Surviving Corporation or the Parent Corporation or any employee stock benefit trust created by the Surviving Corporation or the Parent Corporation) is or becomes the beneficial owner, directly or indirectly, of thirty percent (30%) or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation); and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were Incumbent Directors at the time of the Board's approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying Transaction"); or
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(iv)
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upon liquidation or dissolution of the Company or consummation of the sale of all or substantially all of the Company's assets but only if, pursuant to such liquidation or sale, the assets of the Company are transferred to an entity not owned (directly or indirectly) by the Company's shareholders.
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(d)
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"Date of Termination" means (1) the effective date on which Executive's employment by the Company and its Subsidiaries terminates as specified in a prior written notice by the Company, a Subsidiary or Executive (as the case may be) to the other, delivered pursuant to Section 9, or (2) if Executive's employment by the Company terminates by reason of death, the date of death of Executive, or (3) if the Executive incurs a Disability, the date of such Disability as determined by a physician chosen by the Company. For purposes of determining the timing of payments and benefits to Executive under Section 4, the date of the actual Change in Control shall be treated as Executive's Date of Termination.
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(e)
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"Disability" means Executive's inability to perform Executive's then-existing duties with the Company or its Subsidiaries on a full-time basis for at least one hundred eighty (180) consecutive days as a result of Executive's incapacity due to physical or mental illness.
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(f)
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"Good Reason" means, without Executive's express written consent, the occurrence of any of the following events after a Change in Control:
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(i)
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(A) any change in the duties or responsibilities (including reporting responsibilities) of Executive that is inconsistent in any material and adverse respect with Executive's positions, duties, responsibilities or status with the Company or its Subsidiaries immediately prior to such Change in Control (including any material and adverse diminution of such duties or responsibilities), or (B) a material and adverse change in Executive's titles or offices (including, if applicable, membership on the Board) with the Company or its Subsidiaries as existing immediately prior to such Change in Control;
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(ii)
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(A) a reduction by the Company or its Subsidiaries in Executive's rate of annual base salary as in effect immediately prior to such Change in Control (or as such annual base salary may be increased from time to time thereafter), or (B) the failure by the Company or its Subsidiaries to pay Executive an annual bonus (if any) in respect of the year in which such Change in Control occurs;
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(iii)
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any requirement of the Company or its Subsidiaries that Executive: (A) be based anywhere more than fifty (50) miles from the Executive's residence at the time of the Change in Control, or (B) travel on Company or Subsidiary business to an extent substantially greater than the travel obligations of Executive immediately prior to such Change in Control;
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(iv)
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the failure of the Company or its Subsidiaries to continue in effect any material employee benefit plan, compensation plan, welfare benefit plan or other material fringe benefit plan in which Executive is participating immediately prior to such Change in Control or the taking of any action by the Company or its Subsidiaries which would materially and adversely affect Executive's participation in or reduce Executive's benefits under any such plan, unless Executive is permitted to participate in other plans providing Executive with substantially equivalent benefits in the aggregate; or
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(v)
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the failure of the Company to obtain the assumption (and, if applicable, guarantee) agreement from any successor (and Parent Corporation) as contemplated in Section 8(b).
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(g)
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“Highest Base Salary” means Executive’s highest annual base salary (excluding any bonuses) paid to Executive by the Company and by any Subsidiary during the Company’s last three (3) fiscal years completed immediately prior to the Date of Termination.
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(h)
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"Qualifying Termination" means a termination of Executive's employment after a Change in Control and during the Termination Period (as defined herein) (i) by the Company or its Subsidiaries other than for Cause, or (ii) by Executive for Good Reason. Termination of Executive's employment on account of death or Disability shall not constitute a Qualifying Termination.
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(i)
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"Retirement" means the termination of Executive's employment with the Company and its Subsidiaries: (A) on or after the first of the month coincident with or next following Executive's attainment of age sixty-five (65), or (B) on such later date as may be provided in a written agreement between the Company or its Subsidiaries and Executive.
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(j)
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"Subsidiary" means any corporation or other entity in which the Company: (A) has a direct or indirect ownership interest of fifty percent (50%) or more of the total combined voting power of the then-outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors, or (B) has the right to receive fifty percent (50%) or more of the distribution of profits or fifty percent (50%) of the assets upon liquidation or dissolution.
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(k)
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"Termination Period" means the two (2) year period beginning with a Change in Control and ending two (2) years following such Change in Control.
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(a)
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Qualifying Termination — Cash Payment. If, during the Termination Period, Executive's employment with the Company and its Subsidiaries terminates pursuant to a Qualifying Termination, then the Company shall pay to Executive, within twenty (20) days following the Date of Termination, a lump sum cash amount equal to the sum of (i) two hundred percent (200%) of Executive's Highest Base Salary, as defined in Section 1(g), through the Date of Termination and any base salary and bonuses which have been earned and are payable, to the extent not theretofore paid or deferred, plus (ii) two hundred percent (200%) of Executive's Bonus Amount.
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(b)
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Qualifying Termination ― Continued Coverage. If, during the Termination Period, Executive's employment with the Company and its Subsidiaries terminates pursuant to a Qualifying Termination, the Company shall continue to provide, for a period of twenty-four (24) months following the Date of Termination, Executive (and Executive's dependents, if applicable) with the same level of medical insurance benefits upon substantially the same terms and conditions (including contributions required by Executive for such benefits) as existed immediately prior to Executive's Date of Termination (or, if more favorable to Executive, as such benefits and terms and conditions existed immediately prior to the Change in Control); provided, however, that if Executive is not eligible to continue to participate in the Company plan providing such benefits, the Company shall otherwise provide such benefits on the same after-tax basis as if continued participation had been permitted. Notwithstanding the foregoing, in the event Executive becomes re-employed with another employer and becomes eligible to receive medical insurance benefits from such employer, the medical insurance benefits described herein shall be secondary to such benefits during the period of such eligibility but only if (and to the extent that) the Company reimburses Executive for any increased cost and provides any additional benefits necessary to give Executive the benefits provided hereunder. Executive's accrued benefits as of the Date of Termination under the Company's medical insurance plan shall be payable in accordance with the terms of such plan.
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(a)
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This Agreement shall not be terminated by any Business Combination. In the event of any Business Combination, the provisions of this Agreement shall be binding upon the Surviving Corporation, and such Surviving Corporation shall be treated as the Company hereunder.
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(b)
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The Company agrees that, in connection with any Business Combination, Company will cause any successor entity to the Company unconditionally to assume (and, for any Parent Corporation in such Business Combination, to guarantee), by written instrument delivered to Executive (or Executive's beneficiaries or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption or guarantee prior to the effectiveness of any such Business Combination that constitutes a Change in Control shall be a breach of this Agreement and shall constitute Good Reason hereunder and, further, shall entitle Executive to compensation from the Company in the same amount and on the same terms as Executive would be entitled hereunder as if Executive's employment were terminated following a Change in Control by reason of a Qualifying Termination. For purposes of implementing this Section 8(b), the date on which any such Business Combination becomes effective shall be deemed the date Good Reason occurs and shall be the Date of Termination, if so requested by Executive.
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(c)
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This Agreement shall inure to the benefit of and be enforceable by Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive dies while any amounts would be payable to Executive hereunder if Executive had continued to live, all such amounts (unless otherwise provided herein) shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive's estate.
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(a)
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For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been properly given when delivered or three (3) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows (or to such other address as either Party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt):
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―
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If to the Executive, at the address set forth below in the signatory provision below; and
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―
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If to the Company:
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LNB Bancorp, Inc.
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457 Broadway
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Lorain, OH 44052
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Attn: Mary E. Miles, Senior Vice President of Human Resources
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(b)
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A written notice of Executive's Date of Termination by the Company or Executive, as the case may be, to the other Party shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, 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, and (iii) specify the Date of Termination, which date shall be not less than fifteen (15) days (thirty (30) days, if termination is by the Company for Disability) nor more than sixty (60) days after the giving of such notice. The failure by Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of either Party or preclude either Party from asserting such fact or circumstance in enforcing such Party's rights hereunder.
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(a)
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"Competitive Activity" means the performance or rendering of any banking services; trust services and investment services; portfolio management; retirement planning; administration of employee benefit plans; administration of decedents' estates and court-supervised accounts, guardianships, and custodial arrangements; personal tax and estate tax planning; financial consulting services; investment advising services; and any other business activity, service or product which competes with any existing or future business activity, service or product of the Company.
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(b)
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"Confidential Information" means all of the following (whether written or verbal) pertaining to the Company: (i) trade secrets (as defined by Ohio law); customer lists, records and other information regarding the Company's customers (whether or not evidenced in writing); customer fee or price schedules and fee or price policies; financial books, plans, records, ledgers and information; business development plans; sales and marketing plans; research and development plans; employment and personnel manuals, records, data and policies; business manuals, methods and operations; business forms, correspondence, memoranda and other records; computer records and related data; and any other confidential or proprietary data and information of the Company or its customers which Executive encounters during the Employment Term; and (ii) all products, technology, ideas, inventions, discoveries, developments, devices, processes, business notes, forms and documents, business products, computer programs, and other creations (and improvements of any of the foregoing), whether patentable or copyrightable, which Employee has acquired, developed, conceived or made (whether directly or indirectly, whether solicited or unsolicited, or whether during normal work hours or during off-time) during the Employment Term and which relate to any business activity of the Company or are derived from the Confidential Information designated in Subitem (i) of this Section 11.1(b).
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(c)
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"Customer" means a person, sole proprietorship, partnership, association, organization, corporation, limited liability company, or other entity (governmental or otherwise), wherever located: (i) to or for which the Company sells any products or renders or performs services either during the 180-day period immediately preceding commencement of the Restricted Period or during the Restricted Period, or (ii) which the Company solicits or (as demonstrated by plans, strategies or other tangible preparation) intends to solicit to purchase products or services from the Company either during the 180-day period immediately preceding commencement of the Restricted Period or during the Restricted Period.
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(d)
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"Employment Term" means, for purposes of this Section 11, the period of time starting on the date Executive's employment with the Company commenced and terminating at the close of business on the date Executive's employment with the Company terminates.
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(e)
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"Restricted Period" means a period of two (2) years (or, if shorter, the duration of the Employment Term) commencing on the date the Employment Term is terminated by either Party (for any reason, with or without cause); provided, however, that such period shall be extended to include any period of time during which Employee engages in any activity constituting a breach of this Agreement and any period of time during which litigation transpires wherein Employee is held to have breached this Agreement.
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(f)
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"Company" means, for purposes of this Section 11, LNB Bancorp, Inc. and The Lorain National Bank (a national bank association), all direct and indirect parent and subsidiary entities thereof, and all entities related to LNB Bancorp, Inc., The Lorain National Bank or to such parent and subsidiary entities by common ownership.
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(a)
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Confidentiality. The Confidential Information is and, at all times, shall remain the exclusive property of the Company, and Executive (i) shall hold the Confidential Information in strictest confidence and in a position of trust for the Company, and (ii) except as may be necessary to perform Executive's employment duties with the Company, shall not (directly or indirectly) use for any purpose, copy, duplicate, disclose, convey to any third-party or convert any Confidential Information, either during the Employment Term or at any time following termination of the Employment Term (by either Party, for any reason, with or without cause), and (iii) upon the request of the Company at any time during or after the Employment Term, shall immediately deliver to the Company all the Confidential Information in Executive's possession and shall neither convey to any third-party nor retain any copies or duplicates thereof.
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(b)
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Customers. During the Restricted Period, Executive (or any entity owned or controlled by Executive) shall not directly or indirectly (i) solicit from or perform for any Customer a Competitive Activity, wherever such Customer is located, or (ii) influence (or attempt to influence) any Customer to transfer such Customer's patronage or business from the Company, or (iii) otherwise interfere with any business relationship of the Company with any Customer.
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(c)
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Employees. During the Restricted Period, Executive (or any entity owned or controlled by Executive) shall not directly or indirectly (i) employ, engage, contract for the services of, or solicit or otherwise induce the services of any person who, during the one hundred eighty (180) day period immediately preceding commencement of the Restricted Period or during the Restricted Period, is or was an employee of the Company, or (ii) otherwise interfere with (or attempt to interfere with) any employment relationship of the Company with any employee of Bank.
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(d)
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Other Employment. During the Employment Term, Executive shall not perform services (whether or not for compensation) as an employee, independent contractor, consultant, representative or agent of any person, sole proprietorship, partnership, limited liability company, corporation, association (other than the Company), organization, or other entity (governmental or otherwise) without the prior written consent of the President of the Company (or any person expressly designated by the President).
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(e)
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Costs of Enforcement. Executive shall pay all reasonable legal fees, court costs, expert fees, investigation costs, and other expenses incurred by the Company in the enforcement of this Section 11.
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(a)
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during the Employment Term, Executive will materially assist the Company in the generation, development or enhancement of certain Confidential Information and certain other business assets and activities for Company; and
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(b)
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Executive's promises in this Section 11: (1) were negotiated at arm's-length and with ample time for Executive to seek the advice of legal counsel, (2) are required for the fair and reasonable protection of the Company and the Confidential Information, and (3) do not constitute an unreasonable hardship to Executive in working for the Company or in subsequently earning a livelihood in Executive's field of expertise; and
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(c)
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if Executive breaches (or threatens to breach) any or all of the promises in this Section 11: the secrecy and thereby the value of the Confidential Information will be significantly jeopardized; the Company will be subject to the immediate risk of material, immeasurable, and irreparable damage and harm; the remedies at law for Executive's breach shall be inadequate; the Company shall therefore be entitled to injunctive relief against Executive in addition to any and all other legal or equitable remedies; and
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(d)
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if Executive had not agreed to the restrictive promises in this Agreement, the Company would not have signed this Agreement.
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LNB Bancorp, Inc. | ||||
By: | /s/ Daniel E. Klimas | |||
- Company -
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/s/ Gary J. Elek | ||||
- Executive -
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