EMPLOYMENT AGREEMENT
EXHIBIT
10.16
Employment
Agreement, dated March 8, 2007, between Xxxxxxx X. Xxxxxx, Executive Vice
President and Chief Revenue Officer and Union National Financial Corporation
and
its subsidiary, Union National Community Bank
THIS
AGREEMENT
is made
as of the 8th day
of
March, 2007, between UNION
NATIONAL FINANCIAL CORPORATION (“Corporation”),
a Pennsylvania business corporation having a place of business at 000 Xxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, UNION
NATIONAL COMMUNITY BANK (“Bank”)
a national banking association having a place of business at 000 Xxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxxx 00000, and XXXXXXX
X. XXXXXX (“Executive”),
an individual residing at 000 Xxxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
WHEREAS,
the
Corporation is a registered bank holding company;
WHEREAS,
the Bank
is a subsidiary of the Corporation;
WHEREAS,
Corporation and Bank desire to employ Executive to serve in the capacity of
Executive Vice President and Chief Revenue Officer of the Bank under the terms
and conditions set forth herein; and
WHEREAS,
Executive desires to accept employment with Corporation and Bank on the terms
and conditions set forth herein.
AGREEMENT:
NOW,
THEREFORE,
the
parties hereto, intending to be legally bound, agree as follows:
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1.
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Employment.
Corporation and Bank hereby employ Executive, and Executive hereby
accepts
employment with Corporation and Bank, under the terms and conditions
set
forth in this Agreement.
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| 2. |
Duties
of Employee.
Executive shall perform and discharge well and faithfully such duties
as
an executive officer of Bank as may be assigned to Executive from
time to
time by the Board of Directors of Corporation and Bank. Executive
shall be
employed as Executive Vice President and Chief Revenue Officer of
the Bank
and shall hold such other titles as may be given to him from time
to time
by the Board of Directors of Corporation and Bank. Executive shall
devote
his full-time attention and energies to the business of Corporation
and
Bank during the Employment Period (as defined in Section 3 of this
Agreement); provided, however, that this Section 2 shall not be construed
as preventing Executive from (a) engaging in activities incident
or
necessary to personal investments so long as such investment does
not
exceed 5% of the outstanding shares of any publicly held company,
(b)
acting as a member of the Board of Directors of any other corporation
or
as a member of the Board of Trustees of any other organization, with
the
prior approval of the Board of Directors of Corporation and Bank,
or (c)
being involved in any other activity with the prior approval of the
Board
of Directors of Corporation and Bank. The Executive shall not engage
in
any business or commercial activities, duties or pursuits which compete
with the business or commercial activities of Corporation or Bank,
nor may
the Executive serve as a director or officer or in any other capacity
in a
company which competes with Corporation or Bank. Upon written approval
from the Corporation or Bank, the Executive may engage in voluntary
or
philanthropic endeavors.
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| 3. |
Term
of Agreement.
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(a)
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This
Agreement shall be for a three (3) year period (the “Employment Period”)
beginning on the date first written above, and if not previously
terminated pursuant to the terms of this Agreement, the Employment
Period
shall end three (3) years later (the “Initial Term”). The Employment
Period shall be extended automatically for one additional year on
the
third annual anniversary date of the commencement of the Initial
Term (the
date first above written), and then on each annual anniversary date
of
this Agreement thereafter, unless any of Corporation, Bank or Executive
gives contrary written notice to the other(s) not less than 60 days
before
any such anniversary date so that upon the anniversary date if notice
had
not been previously given as provided in this Section 3(a), the Employment
Period shall be and continue for a one-year period thereafter. References
in the Agreement to “Employment Period” shall refer to the Initial Term of
this Agreement and any extensions to the initial term of this
Agreement.
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(b)
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Notwithstanding
the provisions of Section 3(a) of this Agreement, this Agreement
shall
terminate automatically for Cause (as defined herein) upon written
notice
from the Board of Directors of each of Corporation and Bank to Executive.
As used in this Agreement, “Cause” shall mean any of the following: (i)
the willful failure by the Executive to substantially perform his
duties
hereunder (other than a failure resulting from the Executive’s incapacity
because of physical or mental illness, as provided in Section 3(d)
hereof), after notice from the Corporation or Bank and a failure
to cure
such violation within thirty (30) days of said notice; (ii) the willful
engaging by the Executive in misconduct injurious to the Corporation
or
Bank; (iii) the willful violation by the Executive of the provisions
of
Sections 2, 8, 9 or 10 hereof, after notice from the Corporation
or Bank
and a failure to cure such violation within thirty (30) days of said
notice; (iv) the dishonesty or gross negligence of the Executive
in the
performance of his duties; (v) the breach of Executive’s fiduciary duty
involving personal profit; (vi) the violation of any law, rule or
regulation governing banks or bank officers or any final cease and
desist
order issued by a bank regulatory authority; (vii) conduct on the
part of
Executive which brings public discredit to the Corporation or Bank;
(viii)
unlawful discrimination by the Executive, including harassment against
Corporation’s or Bank’s employees, customers, business associates,
contractors, or visitors; (ix) theft or abuse by Executive of the
Corporation’s or Bank’s property or the property of Corporation’s or
Bank’s customers, employees, contractors, vendors, or business associates;
(x) failure of the Executive to follow the good faith lawful instructions
of the Board of Directors of Corporation or Bank with respect to
its
operations, after notice from the Corporation or Bank and a failure
to
cure such violation within thirty (30) days of said notice; (xi)
the
direction or recommendation of a state or federal bank regulatory
authority to remove the Executive’s position with Corporation and/or Bank
as identified herein; (xii) any final removal or prohibition order
to
which the Executive is subject, by a federal banking agency pursuant
to
Sections 8(e) and 8(g) of the Federal Deposit Insurance Act; (xiii)
the
Executive’s conviction of or plea of guilty or nolo contendere to a
felony, crime of falsehood or a crime involving moral turpitude,
or the
actual incarceration of Executive; (xiv) any act of fraud,
misappropriation or personal dishonesty; (xv) insubordination; (xvi)
misrepresentation of a material fact, or omission of information
necessary
to make the information supplied not materially misleading, in an
application or other information provided by the Executive to the
Corporation or any representative of the Corporation in connection
with
the Executive’s employment with Corporation; (xvii) the existence of any
material conflict between the interests of Corporation and the Executive
that is not disclosed in writing by the Executive to the Corporation
and
approved in writing by the Board of Directors of Corporation; or
(xviii)
the Executive takes action that is clearly contrary to the best interest
of the Corporation.
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If
this
Agreement is terminated for Cause, all of Executive’s rights under this
Agreement shall cease as of the effective date of such termination.
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(c)
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Notwithstanding
the provisions of Section 3(a) of this Agreement, this Agreement
shall
terminate automatically upon Executive’s voluntary termination of
employment (other than in accordance with Section 5 of this Agreement)
for
Good Reason. The term “Good Reason” shall mean (i) the assignment of
duties and responsibilities inconsistent with Executive’s status as
Executive Vice President and Chief Revenue Officer of the Bank, (ii)
a
reassignment which requires Executive to move his principal residence
or
his office more than fifty (50) miles from the Bank’s principal executive
office immediately prior to this Agreement, (iii) any removal of
the
Executive from office or any adverse change in the terms and conditions
of
the Executive’s employment, except for any termination of the Executive’s
employment under the provisions of Section 3(b) hereof, (iv) any
reduction
in the Executive’s Annual Base Salary as in effect on the date hereof or
as the same may be increased from time to time, except such reductions
that are the result of a national financial depression or national
or bank
emergency when such reduction has been implemented by the Board of
Directors for the Corporation’s and Bank’s senior management, or (v) any
failure of Corporation and Bank to provide the Executive with benefits
at
least as favorable as those enjoyed by the Executive during the Employment
Period under any of the pension, life insurance, medical, health
and
accident, disability or other employee plans of Corporation and Bank,
or
the taking of any action that would materially reduce any of such
benefits
unless such reduction is part of a reduction applicable to all employees
of comparable position within Bank. If such termination occurs for
Good
Reason, then Corporation or Bank shall pay Executive an amount equal
to
two (2) times the Executive’s Annual Base Salary as defined in subsection
(a) of Section 4, which amount shall be payable in eighteen (18)
equal
monthly installments and shall be subject to federal, state and local
tax
withholdings. In addition, if Executive and his dependents who are
qualified beneficiaries are eligible to elect continuation of health
insurance benefits under the Consolidated Omnibus Budget Reconciliation
Act of 1995 (“COBRA”) and if Executive elects to purchase such COBRA
continuation coverage for himself and/or for his qualified beneficiaries,
then in such event the Employer shall reimburse Executive in an amount
equal to the monthly premium paid by him to obtain such coverage,
net of
the amount which employees of the Employer are required to contribute
toward the purchase of health insurance benefits under the personnel
policies of the Employer then in effect, which reimbursement shall
continue until the first of the following to occur: (i) the
expiration of 18 months following the date of termination of the
Employment Period and (ii) the qualification of Executive and his
qualified beneficiaries for substantially equivalent coverage under
any
health insurance policy maintained by any future employer of Executive.
Reimbursement as provided for herein shall be made by the Employer
to
Executive monthly within five (5) business days following the presentation
by Executive to the Employer of evidence of payment by him (in the
form of
a copy of a cancelled check or credit card draft or other documentary
evidence reasonably satisfactory to the Employer) of the monthly
COBRA
continuation coverage premium for that month. However, in the event
the
payment described herein, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with his
termination of employment, would result in the imposition of an excise
tax
under Internal Revenue Code of 1986, as amended (“Code”) Section 4999,
such payments shall be retroactively (if necessary) reduced to the
extent
necessary to avoid such excise tax imposition. Upon written notice
to
Executive, together with calculations of Corporation’s independent
auditors, Executive shall remit to Corporation the amount of the
reduction, plus such interest, as may be necessary to avoid the imposition
of such excise tax. Notwithstanding the foregoing or any other provision
of this contract to the contrary, if any portion of the amount herein
payable to the Executive is determined to be non-deductible pursuant
to
the regulations promulgated under Code Section 280G, the Corporation
shall
be required only to pay to Executive the amount determined to be
deductible under Code Section 280G.
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At
the
option of the Executive, exercisable by the Executive within ninety (90) days
after the occurrence of the event constituting "Good Reason," the Executive
may
resign from employment under this Agreement by a notice in writing (the "Notice
of Termination") delivered to Corporation and Bank and the provisions of this
Section 3(c) hereof shall thereupon apply.
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(d)
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Notwithstanding
the provisions of Section 3(a) of this Agreement, this Agreement
shall
terminate automatically upon Executive’s Disability, and Executive’s
rights under this Agreement shall cease as of the date of such
termination. For purposes of this Agreement, the Executive shall
have a
“Disability” if, as a result of physical or mental injury or impairment,
Executive is unable to perform all of the essential job functions
of his
position on a full time basis, taking into account any reasonable
accommodation required by law, and without posing a direct threat
to
himself and others, for a period of one hundred eighty (180) days
or more.
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(e)
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Executive
agrees that in the event his employment under this Agreement is
terminated, Executive shall resign as a director of Corporation and
Bank,
or any affiliate or subsidiary thereof, if he is then serving as
a
director of any of such entities.
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| 4. |
Employment
Period Compensation.
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(a)
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Annual
Base Salary.
For services performed by Executive under this Agreement, Corporation
or
Bank shall pay Executive an Annual Base Salary during the Employment
Period at the rate of $160,425.00 per year, minus applicable withholdings
and deductions, payable at the same times as salaries are payable
to other
executive employees of Corporation or Bank. Corporation or Bank may,
from
time to time, increase Executive’s Annual Base Salary, and any and all
such increases shall be deemed to constitute amendments to this Section
4(a) to reflect the increased amounts, effective as of the date
established for such increases by the Board of Directors of Corporation
or
Bank or any committee of such Board in the resolutions authorizing
such
increases.
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(b)
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Bonus.
For services performed by Executive under this Agreement, Corporation
or
Bank may, from time to time, pay a bonus or bonuses to Executive
as
Corporation or Bank, in its sole discretion, deems appropriate. The
payment of any such bonuses shall not reduce or otherwise affect
any other
obligation of Corporation or Bank to Executive provided for in this
Agreement. As of the time of the execution of this Agreement, Executive’s
incentive compensation is anticipated to be calculated as described
in
Exhibit 1 to this Agreement.
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(c)
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Vacations.
During the term of this Agreement, 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 Corporation and Bank. However,
Executive shall not be entitled to receive any additional compensation
from Corporation and Bank for failure to take a vacation, nor shall
Executive be able to accumulate unused vacation time from one year
to the
next, except to the extent authorized by the Boards of Directors
of
Corporation and Bank.
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(d)
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Automobile.
Executive shall be eligible for reimbursement for business related
automobile mileage consistent with then applicable and current guidelines
and rates permitted by Internal Revenue
Service.
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(e)
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Employee
Benefit Plans.
During the term of this Agreement, Executive shall be entitled to
participate in or receive the benefits of any employee benefit plan
currently in effect at Corporation and Bank, subject to the terms
of said
plan, until such time that the Boards of Directors of Corporation
and Bank
authorize a change in such benefits. Nothing paid to Executive under
any
plan or arrangement presently in effect or made available in the
future
shall be deemed to be in lieu of the salary payable to Executive
pursuant
to Section 4(a) hereof.
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(f)
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Business
Expenses.
During the term of this Agreement, Executive shall be entitled to
receive
prompt reimbursement for all reasonable expenses incurred by him,
which
are properly accounted for, in accordance with the policies and procedures
established by the Boards of Directors of Corporation and Bank for
their
executive officers.
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(g)
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Club
Membership.
Corporation or Bank will make initiation payments to the Lancaster
County
Club under the terms and conditions set forth in a letter dated December
12, 2005, which is attached as Exhibit 2 to this Agreement. However,
notwithstanding any provisions to the contrary in the letter of December
12, 2005, Corporation or Bank will pay membership dues and
business-related expenses, incurred by Executive at the Lancaster
Country
Club.
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| 5. |
Termination
of Employment Following Change in Control.
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(a)
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If
a Change in Control (as defined in Section 5(b) of this Agreement)
shall
occur and thereafter, there shall
be:
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(i)
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any
involuntary termination of Executive’s employment (other than for the
reasons set forth in Section 3(b) or 3(d) of this Agreement);
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(ii)
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any
reduction in Executive’s title, responsibilities, including reporting
responsibilities, or authority, including such title, responsibilities
or
authority as such may be increased from time to time during the term
of
this Agreement;
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(iii)
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the
assignment to Executive of duties inconsistent with Executive’s office on
the date of the Change in Control or as the same may be increased
from
time to time after the Change in
Control;
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(iv)
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any
reassignment of Executive to a location greater than fifty (50) miles
from
the location of Executive’s office on the date of the Change in
Control;
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(v)
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any
reduction in Executive’s Annual Base Salary in effect on the date of the
Change in Control or as the same may be increased from time to time
after
the Change in Control;
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(vi)
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any
failure to provide Executive with benefits at least as favorable
as those
enjoyed by Executive under any of Corporation’s or Bank’s retirement or
pension, life insurance, medical, health and accident, disability
or other
employee plans in which Executive participated at the time of the
Change
in Control, or the taking of any action that would materially reduce
any
of such benefits in effect at the time of the Change in
Control;
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| (vii) |
any
requirement that Executive travel in performance of his duties on
behalf
of Corporation or Bank for a significantly greater period of time
during
any year than was required of Executive during the year preceding
the year
in which the Change in Control occurred;
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| (viii) |
any
sustained pattern of interruption or disruption of Executive for
matters
substantially unrelated to Executive’s discharge of Executive’s duties on
behalf of Corporation and Bank; or
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| (ix) |
a
good faith determination by Executive that he can no longer work
with the
new management of Corporation and Bank, provided, however, that Executive
cannot make such a determination during the first five (5) months
following a Change in Control.
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then,
at
the option of Executive, exercisable by Executive within one hundred eighty
(180) days of the Change in Control or occurrence of any of the foregoing
events, Executive may resign from employment with Corporation and Bank (or,
if
involuntarily terminated, give notice of intention to collect benefits under
this Agreement) by delivering a notice in writing (the “Notice of Termination”)
to Corporation and Bank and the provisions of Section 6 of this Agreement shall
apply.
(b) As
used
in this Agreement, “Change in Control” shall mean a change in control (other
than one occurring by reason of an acquisition of the Corporation or Bank by
Executive) of a nature that would be required to be reported in response to
Item
6(e) of Schedule 14A of Regulation 14A and any successor rule or regulation
promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) if
Corporation or Bank were subject to the Exchange Act reporting requirements;
provided that, without limiting the foregoing, such a change in control shall
be
deemed to have occurred if the Board of Directors certifies that one of the
following has occurred:
(i) (A)
a
merger, consolidation or division involving Corporation or Bank, (B) a sale,
exchange, transfer or other disposition of substantially all of the assets
of
Corporation or Bank, or (C) a purchase by Corporation or Bank of substantially
all of the assets of another entity, unless such merger, consolidation,
division, sale, exchange, transfer, purchase or disposition is approved in
advance by seventy percent (70%) or more of the members of the Board of
Directors of Corporation or Bank who are not interested in the transaction
and a
majority of the members of the Board of Directors of the legal entity resulting
from or existing after any such transaction and of the Board of Directors of
such entity’s parent corporation, if any, are former members of the Board of
Directors of Corporation or Bank; or
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(ii)
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any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, other than Corporation or Bank or any “person” who on the date hereof
is a director or officer of Corporation or Bank is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Corporation or Bank representing
fifty (50%) percent or more of the total value or combined voting
power of
Corporation or Bank’s then outstanding securities, or
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(iii)
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during
any period of one (1) year during the term of Executive’s employment under
this Agreement, individuals who at the beginning of such period constitute
the Board of Directors of Corporation or Bank cease for any reason
to
constitute at least a majority thereof, unless the election of each
director who was not a director at the beginning of such period has
been
approved in advance by directors representing at least two-thirds
of the
directors then in office who were directors at the beginning of the
period.
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| 6. |
Rights
in Event of Termination of Employment Following Change in
Control.
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(a)
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In
the event that Executive delivers a Notice of Termination (as defined
in
Section 5(a) of this Agreement) to Corporation and Bank, Executive
shall
be entitled to receive the compensation and benefits set forth
below:
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If,
at
the time of termination of Executive’s employment, a “Change in Control” (as
defined in Section 5(b) of this Agreement) has also occurred, Corporation and
Bank shall pay Executive a lump sum amount equal to and no greater than two
(2)
times the Executive’s Agreed Compensation as defined in subsection (a) of
Section 4, minus applicable taxes and withholdings. In addition, if Executive
and his dependents who are qualified beneficiaries are eligible to elect
continuation of health insurance benefits under COBRA and if Executive elects
to
purchase such COBRA continuation coverage for himself and/or for his qualified
beneficiaries, then in such event the Employer shall reimburse Executive in
an
amount equal to the monthly premium paid by him to obtain such coverage, net
of
the amount which employees of the Employer are required to contribute toward
the
purchase of health insurance benefits under the personnel policies of the
Employer then in effect, which reimbursement shall continue until the first
of
the following to occur: (i) the expiration of 18 months following the date
of termination of the Employment Period and (ii) the qualification of
Executive and his qualified beneficiaries for substantially equivalent coverage
under any health insurance policy maintained by any future employer of
Executive. Reimbursement as provided for herein shall be made by the Employer
to
Executive monthly within five (5) business days following the presentation
by
Executive to the Employer of evidence of payment by him (in the form of a copy
of a cancelled check or credit card draft or other documentary evidence
reasonably satisfactory to the Employer) of the monthly COBRA continuation
coverage premium for that month. However, in the event the payment described
herein, when added to all other amounts or benefits provided to or on behalf
of
the Executive in connection with his termination of employment, would result
in
the imposition of an excise tax under Code Section 4999, such payments shall
be
retroactively (if necessary) reduced to the extent necessary to avoid such
excise tax imposition. Upon written notice to Executive, together with
calculations of Corporation’s independent auditors, Executive shall remit to
Corporation the amount of the reduction, plus such interest, as may be necessary
to avoid the imposition of such excise tax. Notwithstanding the foregoing or
any
other provision of this contract to the contrary, if any portion of the amount
herein payable to the Executive is determined to be non-deductible pursuant
to
the regulations promulgated under Code Section 280G, the Corporation shall
be
required only to pay to Executive the amount determined to be deductible under
Code Section 280G.
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(b)
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Executive
shall not be required to mitigate the amount of any payment provided
for
in this Section 6 by seeking other employment or otherwise. Unless
otherwise agreed to in writing, the amount of payment or the benefit
provided for in this Section 6 shall not be reduced by any compensation
earned by Executive as the result of employment by another employer
or by
reason of Executive’s receipt of or right to receive any retirement or
other benefits after the date of termination of employment or
otherwise.
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(c)
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Notwithstanding
any other provision, in the event that Executive is determined to
be a key
employee as that term is defined in Code Section 409A no payment
shall be
made until one day following six months from the date of separation
of
service as that term is defined in Code Section
409A.
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| 7. |
Rights
in Event of Termination of Employment Absent Change in
Control.
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(a) In
the
event that Executive’s employment is involuntarily terminated by Corporation
and/or Bank without Cause and no Change in Control shall have occurred at the
date of such termination, Corporation and Bank shall pay Executive an amount
equal to two (2) times the Executive’s Annual Base Salary as defined in
subsection (a) of Section 4, which amount shall be payable in eighteen (18)
equal monthly installments and shall be subject to federal, state and local
tax
withholdings. In addition, if Executive and his dependents who are qualified
beneficiaries are eligible to elect continuation of health insurance benefits
under the COBRA and if Executive elects to purchase such COBRA continuation
coverage for himself and/or for his qualified beneficiaries, then in such event
the Employer shall reimburse Executive in an amount equal to the monthly premium
paid by him to obtain such coverage, net of the amount which employees of the
Employer are required to contribute toward the purchase of health insurance
benefits under the personnel policies of the Employer then in effect, which
reimbursement shall continue until the first of the following to occur:
(i) the expiration of 18 months following the date of termination of the
Employment Period, and (ii) the qualification of Executive and his
qualified beneficiaries for substantially equivalent coverage under any health
insurance policy maintained by any future employer of Executive. Reimbursement
as provided for herein shall be made by the Employer to Executive monthly within
five (5) business days following the presentation by Executive to the Employer
of evidence of payment by him (in the form of a copy of a cancelled check or
credit card draft or other documentary evidence reasonably satisfactory to
the
Employer) of the monthly COBRA continuation coverage premium for that month.
However, in the event the payment described herein, when added to all other
amounts or benefits provided to or on behalf of the Executive in connection
with
his termination of employment, would result in the imposition of an excise
tax
under Code Section 4999, such payments shall be retroactively (if necessary)
reduced to the extent necessary to avoid such excise tax imposition. Upon
written notice to Executive, together with calculations of Corporation’s
independent auditors, Executive shall remit to Corporation the amount of the
reduction, plus such interest, as may be necessary to avoid the imposition
of
such excise tax. Notwithstanding the foregoing or any other provision of this
contract to the contrary, if any portion of the amount herein payable to the
Executive is determined to be non-deductible pursuant to the regulations
promulgated under Code Section 280G, the Corporation shall be required only
to
pay to Executive the amount determined to be deductible under Code Section
280G.
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(b)
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Executive
shall not be required to mitigate the amount of any payment provided
for
in this Section 7 by seeking other employment or otherwise. Unless
otherwise agreed to in writing, the amount of payment or the benefit
provided for in this Section 7 shall not be reduced by any compensation
earned by Executive as the result of employment by another employer
or by
reason of Executive’s receipt of or right to receive any retirement or
other benefits after the date of termination of employment or
otherwise.
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| 8. |
Covenant
Not to Compete.
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(a)
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Executive
hereby acknowledges and recognizes the highly competitive nature
of the
business of Corporation and Bank and accordingly agrees that, during
and
for the applicable period set forth in Section 8(c) hereof, Executive
shall not, except as otherwise permitted in writing by the Corporation
and
the Bank:
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(i)
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be
engaged, directly or indirectly, either for his own account or as
agent,
consultant, employee, partner, officer, director, proprietor, investor
(except as an investor owning less than 5% of the stock of a publicly
owned company) or otherwise of any person, firm, corporation or enterprise
engaged in (1) the banking (including bank holding company) or financial
services industry, or (2) any other activity in which Corporation
or Bank
or any of their subsidiaries are engaged during the Employment Period,
and
remain so engaged at the end of the Employment Period, in any county
and
contiguous county in which, at the date of termination of the Executive’s
employment, a branch location, office, loan production office, or
trust or
asset and wealth management office of Corporation, Bank or any of
their
subsidiaries is located, whether inside or outside of the Commonwealth
of
Pennsylvania, (the “Non-Competition Area”); or
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(ii)
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provide
financial or other assistance to any person, firm, corporation, or
enterprise engaged in (1) the banking (including bank holding company)
or
financial services industry, or (2) any other activity in which
Corporation or Bank or any of their subsidiaries are engaged during
the
Employment Period, in the Non-Competition Area;
or
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(iii)
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directly
or indirectly solicit persons or entities who were customers or referral
sources of Corporation, Bank or their subsidiaries within one year
of
Executive’s termination of employment, to a become customer or referral
source of a person or entity other than Corporation, Bank or their
subsidiaries; or
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| (iv) |
directly
or indirectly solicit employees of Corporation, Bank or their subsidiaries
who were employed within one year of Executive’s termination of employment
to work for anyone other than Corporation, Bank or their
subsidiaries.
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(b)
|
It
is expressly understood and agreed that, although Executive and
Corporation and Bank consider the restrictions contained in Section
8(a)
hereof reasonable for the purpose of preserving for Corporation and
Bank
and their subsidiaries their good will and other proprietary rights,
if a
final judicial determination is made by a court having jurisdiction
that
the time or territory or any other restriction contained in Section
8(a)
hereof is an unreasonable or otherwise unenforceable restriction
against
Executive, the provisions of Section 8(a) hereof shall not be rendered
void but shall be deemed amended to apply as to such maximum time
and
territory and to such other extent as such court may judicially determine
or indicate to be reasonable.
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(c)
|
The
provisions of this Section 8 shall be applicable commencing on the
date of
this Agreement and ending on one of the following dates, as
applicable:
|
(i) if
Executive’s employment terminates in accordance with the non-renewal provisions
of Section 3, the first anniversary date of the effective date of termination
of
employment; or
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(ii)
|
if
Executive’s employment terminates in accordance with the provisions of
Section 3(c) of this Agreement (relating to termination for Good
Reason),
eighteen (18) months following the effective date of termination
of
employment; or
|
(iii) if
the
Executive voluntarily terminates his employment without Good Reason, eighteen
(18) months following the effective date of termination of employment;
or
(iv) if
the
Executive’s employment is involuntarily terminated without Cause or under
Section 5(a) of this Agreement (relating to termination for Change of Control),
eighteen (18) months following the effective date of termination of employment;
or
(v) if
the
Executive’s employment is terminated for Cause as defined in Sections
3(b)(i)-(v), Section 3(b)(ix), Section 3(b)(x), or Section 3(b)(xiv)-(xviii)
of
this Agreement, the second anniversary date of the effective date of termination
of employment; or
(vi) if
the
Executive’s employment is terminated for Cause as defined in Sections
3(b)(vi)-(viii) or Sections 3(b)(xi)-(xiii) of this Agreement, the first
anniversary date of the effective date of termination of employment.
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9.
|
Unauthorized
Disclosure.
During the term of his employment hereunder, or at any later time,
the
Executive shall not, without the written consent of the Boards of
Directors of Corporation and Bank or a person authorized thereby,
knowingly disclose to any person, other than an employee of Corporation
or
Bank or a person to whom disclosure is reasonably necessary or appropriate
in connection with the performance by the Executive of his duties
as an
executive of Corporation and Bank, any material confidential information
obtained by him while in the employ of Corporation and Bank with
respect
to any of Corporation’s and Bank’s services, products, improvements,
formulas, designs or styles, processes, customers, methods of business
or
any business practices, the disclosure of which could be or will
be
damaging to Corporation or Bank; provided, however, that confidential
information shall not include any information known generally to
the
public (other than as a result of unauthorized disclosure by the
Executive
or any person with the assistance, consent or direction of the Executive)
or any information of a type not otherwise considered confidential
by
persons engaged in the same business or a business similar to that
conducted by Corporation and Bank or any information that must be
disclosed as required by law.
|
| 10. |
Work
Made for Hire. Any
work performed by the Executive under this Agreement should
be considered a “Work Made for Hire” as the phrase is defined by the U.S.
patent laws and shall be owned by and for the express benefit of
Corporation, Bank and their subsidiaries and affiliates. In the event
it
should be established that such work does not qualify as a Work Made
for
Hire, the Executive agrees to and does hereby assign to Corporation,
Bank,
and their affiliates and subsidiaries, all of his rights, title,
and/or
interest in such work product, including, but not limited to, all
copyrights, patents, trademarks, and propriety
rights.
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|
11.
|
Return
of Company Property and Documents.
The Executive agrees that, at the time of termination of his employment,
regardless of the reason for termination, he will deliver to Corporation,
Bank and their subsidiaries and affiliates, any and all company property,
including, but not limited to, automobile, keys, security codes or
passes,
mobile telephones, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, software
programs, equipment, other documents or property, or reproductions
of any
of the aforementioned items developed or obtained by the Executive
during
the course of his employment.
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|
12.
|
Liability
Insurance.
Corporation and Bank shall use their best efforts to obtain insurance
coverage for the Executive under an insurance policy covering officers
and
directors of Corporation and Bank against lawsuits, arbitrations
or other
legal or regulatory proceedings; however, nothing herein shall be
construed to require Corporation and/or Bank to obtain such insurance,
if
the Board of Directors of the Corporation and/or Bank determine that
such
coverage cannot be obtained at a reasonable price. In the event that
the
Corporation and Bank are unable to procure insurance coverage for
the
Executive, Executive may terminate this contract upon sixty (60)
days
notice and the provisions of Paragraph 8 shall not
apply.
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|
13.
|
Notices.
Except as otherwise provided in this Agreement, any notice required
or
permitted to be given under this Agreement shall be deemed properly
given
if in writing and if mailed by registered or certified mail, postage
prepaid with return receipt requested, to Executive’s residence, in the
case of notices to Executive, and to the principal executive offices
of
Corporation and Bank, in the case of notices to Corporation and
Bank.
|
|
14.
|
Waiver.
No
provision of this Agreement may be modified, waived or discharged
unless
such waiver, modification or discharge is agreed to in writing and
signed
by Executive and an executive officer specifically designated by
the
Boards of Directors of Corporation and Bank. No waiver by either
party
hereto at any time of any breach by the 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.
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|
15.
|
Assignment.
This Agreement shall not be assignable by any party, except by Corporation
and Bank to any successor in interest to their respective
businesses.
|
|
16.
|
Entire
Agreement.
This Agreement supersedes any and all agreements, either oral or
in
writing, between the parties with respect to the employment of the
Executive by the Bank and/or Corporation and this Agreement contains
all
the covenants and agreements between the parties with respect to
employment.
|
|
17.
|
Binding
Agreement.
|
This
Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees. If Executive should die after a Notice
of
Termination is delivered by Executive, or following termination of Executive’s
employment without Cause, and any amounts would be payable to Executive under
this Agreement if Executive had continued to live, all such amounts shall be
paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee, or other designee, or, if there is no such designee, to Executive’s
estate.
|
18.
|
Arbitration.
Corporation, Bank and Executive recognize that in the event a dispute
should arise between them concerning the interpretation or implementation
of this Agreement, lengthy and expensive litigation will not afford
a
practical resolution of the issues within a reasonable period of
time.
Consequently, each party agrees that all disputes, disagreements
and
questions of interpretation concerning this Agreement (except for
any
enforcement sought with respect to Sections 8, 9, 10 or 11 which
may be
litigated in court, including an action for injunction or other relief)
are to be submitted for resolution, in Philadelphia, Pennsylvania,
to the
American Arbitration Association (the “Association”) in accordance with
the Association’s National Rules for the Resolution of Employment Disputes
or other applicable rules then in effect (“Rules”). Corporation, Bank or
Executive may initiate an arbitration proceeding at any time by giving
notice to the other in accordance with the Rules. Corporation and
Bank and
Executive may, as a matter of right, mutually agree on the appointment
of
a particular arbitrator from the Association’s pool. The arbitrator shall
not be bound by the rules of evidence and procedure of the courts
of the
Commonwealth of Pennsylvania but shall be bound by the substantive
law
applicable to this Agreement. The decision of the arbitrator, absent
fraud, duress, incompetence or gross and obvious error of fact, shall
be
final and binding upon the parties and shall be enforceable in courts
of
proper jurisdiction. Following written notice of a request for
arbitration, Corporation, Bank and Executive shall be entitled to
an
injunction restraining all further proceedings in any pending or
subsequently filed litigation concerning this Agreement, except as
otherwise provided herein or any enforcement sought with respect
to
Sections 8, 9, 10 or 11 of this Agreement, including an action for
injunction or other relief.
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|
19.
|
Validity.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of
this Agreement, which shall remain in full force and
effect.
|
|
20.
|
Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the
domestic, internal laws of the Commonwealth of Pennsylvania, without
regard to its conflicts of laws principles provided that this Agreement
shall also be interpreted as is minimally required to qualify any
payment
hereunder as not triggering any penalty on the Executive or the
Corporation or Bank pursuant to Code Section
409A.
|
|
21.
|
Headings.
The section headings of this Agreement are for convenience only and
shall
not control or affect the meaning or construction or limit the scope
or
intent of any of the provisions of this
Agreement.
|
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above
written.
| ATTEST: |
UNION
NATIONAL FINANCIAL
CORPORATION
|
|
| |
|
|
| /s/ Xxxxx X. Xxxxxx | By: | /s/ Xxxx X. Xxxxxx |
|
Xxxx
X. Xxxxxx
Chairman
&
CEO
|
||
|
UNION
NATIONAL COMMUNITY BANK
|
||
| |
|
|
| /s/ Xxxxx X. Xxxxxx | By: | /s/ Xxxx X. Xxxxxx |
|
Xxxx X. Xxxxxx
Chairman
&
CEO
|
||
| WITNESS: | EXECUTIVE | |
| |
|
|
| /s/ R. Xxxxxxx Xxxx | By: | /s/ Xxxxxxx X. Xxxxxx |
|
Xxxxxxx X. Xxxxxx
|
||
