EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
THIS AGREEMENT is made effective on the first day of March, 1999 between
AMERICAN BANK OF THE LEHIGH VALLEY, 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000, a Pennsylvania banking institution (the "Bank") and XXXX
XXXXXXX, residing at 0 Xxxxxxx, Xxx Xxxxxxx, XX, 00000, an adult individual (the
"Executive").
WHEREAS, the Bank desires to employ the Executive as its Chief Financial
and Operating Officer under the terms and conditions set forth herein; and
WHEREAS, the Executive desires to serve the Bank in an executive capacity
under the terms and conditions set forth in this Agreement; NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein and
intending to be legally bound hereby, the parties agree as follows:
1. TERMS OF EMPLOYMENT. The Bank hereby employs the Executive and the
-------------------
Executive hereby accepts employment with the Bank for a period of one (1) year.
The effective date of this agreement shall be March 1, 1999 (the "Effective
Date" of the Agreement). This Agreement supercedes any prior agreement between
Bank and Executive.
Provided the Agreement is not terminated as provided herein in paragraph
12, the term shall be extended by one calendar day for each expired calendar day
after the Effective Date. After the Effective Date, the Bank may terminate the
further day-to-day extension of the Agreement by delivering written notice to
the Executive.
2. POSITION AND DUTIES. The Executive shall serve as the Executive Vice
-------------------
President and Chief Financial and Operating Officer and shall have such power
and duties as may be from time to time prescribed by the President of the Bank
and the Board of Directors, provided that such duties are consistent with the
Executive's position as Chief Financial and Operating Officer as contemplated by
the Executive's position description, which may change from time to time at the
discretion of the Board of Directors, and otherwise be consistent with paragraph
12(d).
3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote all his
working time, ability and attention to the business of the Bank during the term
of this Agreement. The Executive shall notify the Board of Directors of the Bank
in writing and receive their written consent before the Executive engages in any
other business or commercial activities, duties or pursuits, including, but not
limited to, directorships of other companies. Such consent shall not be
unreasonably withheld by the Board of Directors for the Executive's
participation in charitable, civic or similar not-for-profit- organizations.
Under no circumstances may the Executive engage in any business or commercial
activities, duties or pursuits which compete with the business or commercial
activities of the Bank, nor may the Executive serve as a director or officer or
in any other capacity in a company which competes with the Bank.
4. COMPENSATION.
------------
(a) ANNUAL DIRECT SALARY: As compensation for services rendered the
--------------------
Bank under this Agreement, the Executive shall be entitled to receive from
the Bank an annual direct salary of Ninety Five Thousand Dollars ($95,000)
per year, (the "Annual Direct Salary") less withholdings required by law
payable in substantially equal monthly installments (or such other more
frequent intervals as may be determined by the Board of Directors of the
Bank as payroll policy for senior executive officers) prorated for any
partial employment period. During any additional year or extension of this
Agreement, Executive's performance may be reviewed by the President and the
Board and Executive's salary might be increased at the discretion of the
President and the Board of Directors.
(b) BONUS. The Board of Directors through its Compensation Committee
-----
in its sole discretion may provide for payment of a yearly bonus to the
Executive in such an amount as it may deem appropriate to provide incentive
to the Executive and to reward the Executive for his performance.
5. FRINGE BENEFITS, VACATION, EXPENSES, AND PERQUISITES.
----------------------------------------------------
(a) EMPLOYEE BENEFIT PLANS. The Executive shall be entitled to
----------------------
participate in or receive benefits under all Bank employee benefit plans
when such plans are established; including but not limited to any
profit-sharing plan, savings plan, medical or health-and-accident plan or
arrangement made available by the Bank to its employees, subject to and on
a basis consistent with terms, conditions and overall administration of
such plans and arrangements.
(b) VACATION AND HOLIDAYS. The Executive shall be entitled to the
---------------------
number of paid vacation days in each calendar year determined by the Bank
from time to time for its employees. Beginning in 1999, the Executive shall
be entitled to a minimum of four (4) weeks paid vacation days. Thereafter
the Executive and the Bank, through its Board of Directors, shall agree
upon the number of days Executive shall receive as vacation benefits, but
not less than (4) four weeks. The Executive shall also be entitled to all
paid holidays given by the Bank to its senior executive officers.
(c) BUSINESS EXPENSES. During the term of his employment hereunder,
-----------------
the Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him (in accordance with the policies and
procedures established by the Board of Directors of the Bank for its senior
executive officers) in performing services hereunder, provided that the
Executive properly accounts therefor in accordance with Bank policy.
(d) AUTO. The Executive shall be entitled to the use of a
----
Bank-provided automobile, or for equivalent cash renumeration as an
allowance for business use of Executive's personal automobile. It is
contemplated the Bank shall provide the Executive with a leased automobile
and reimbursement for ordinary expenses associated with the use of the
automobile, such as maintenance and insurance.
6. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Bank shall use its
------------------------------------------------
best efforts to obtain such insurance coverage for the Executive under an
insurance policy covering officers and directors of the Bank against lawsuits,
arbitrations or other legal or regulatory proceedings; however, nothing herein
shall be construed to require the Bank to obtain such insurance, if the Board of
Directors of the Bank determine that such coverage cannot be obtained at a
commercially reasonable price.
7. NON-DISCLOSURE/TRADE SECRETS. During the employment of Executive, or at
----------------------------
any later time, the Executive shall not, without the written consent of the
Board of Directors of the Bank or a person authorized thereby, disclose to any
person, other than an employee of the 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 the Bank, any confidential
information obtained by him while in the employ of the Bank with respect to any
of the Bank's services, products, improvements, formulas, designs or styles,
processes, customers, methods of distribution or any business practices the
disclosure of which could be or will be materially damaging to the 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 information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Bank. This provision shall survive
termination of Executive's employment under this Agreement and/or termination of
this Agreement for a period of two years after termination of Executives
employment.
8. RESTRICTIVE COVENANT. The Executive covenants and agrees as follows: the
--------------------
Executive shall not directly or indirectly, within the marketing area of the
Bank (defined as an area within a thirty (30) mile radius of the Bank's main
office or any branch office), enter into or engage generally in direct or
indirect competition with the Bank or any subsidiary in the business of
commercial banking, either as an individual on his own or as a partner or joint
venturer, or as a director, officer, shareholder, employee, agent, independent
contractor, lessor or creditor of or for any person, for a period of one (1)
year after the date of termination of his employment, whether voluntary or
involuntary. The existence of any claim or cause of action of the Executive
against the Bank, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Bank of this covenant. The
Executive agrees that the restrictions set forth in this Agreement do not
unreasonably interfere with his ability to obtain employment in his chosen
field. The Executive agrees that any breach of the restrictions set forth in
this Paragraph will result in irreparable injury to the Bank for which it shall
have no adequate remedy at law and the Bank shall be entitled to injunctive
relief in order to enforce the provisions hereof. In the event that this
Paragraph shall be determined by any court of competent jurisdiction to be
unenforceable in part by reason of it being too great a period of time or
covering too great a geographical area, it shall be in full force and effect as
to that period of time or geographical area determined to be reasonable by the
court.
9. NON-SOLICITATION. Executive covenants and agrees that while employed by
----------------
the Bank and for a period of one (1) year after the termination of Executive's
employment, either voluntarily or involuntarily, Executive shall not, either
directly or indirectly in any capacity whatsoever, (a) obtain, solicit, divert,
appeal to, attempt to obtain, attempt to solicit, attempt to divert, or attempt
to appeal to any customers, clients or referral services of the Bank to divert
their business from the Bank; (b) solicit any person who was employed by the
Bank to leave the employ of the Bank. For purposes of this covenant, "customers,
clients, and referral sources" shall include all persons who are or were
customers, clients or referral sources of the Bank at any time during the
employment of Executive by the Bank.
The existence of any claim by Executive, whether predicated upon this
Agreement or otherwise, shall not constitute defense to the Bank's enforcement
of or attempts to enforce this provision.
10. NOTIFICATION OF NON-DISCLOSURE/TRADE SECRET, RESTRICTIVE COVENANT AND
---------------------------------------------------------------------
NON-SOLICITATION PROVISIONS. During his employment, and a period of one (1) year
---------------------------
following termination of his employment with the Bank, Executive agrees to
inform any prospective employer of existence of the Non-Disclosure/Trade Secret,
Restrictive Covenant and Non-Solicitation provisions of this Agreement should
such provisions be applicable.
11. TERMINATION.
-----------
(a) The Executive's employment hereunder shall terminate upon his
death.
(b) If the Executive becomes disabled (as certified by a licensed
physician chosen by the Bank and the Executive or in the event that the
Bank and the Executive cannot agree upon a physician, each shall designate
a licensed physician, and the licensed physician so designed shall appoint
a third physician whose decision shall be binding upon the parties) because
of sickness, physical or mental disability, or any other reason, and is
unable to substantially perform or complete his duties as outlined in his
job description and under this Agreement for a period of ninety (90)
consecutive days, the Bank shall have the option to terminate this
Agreement by giving written notice of termination to the Executive. Such
termination shall be without prejudice to any right the Executive may have
under the disability insurance program maintained by the Bank.
(c) The Bank may terminate the Executive's employment hereunder for
Cause. For the purposes of this agreement, the Bank shall have "Cause" to
terminate the Executive's employment hereunder only upon (1) the failure by
the Executive to substantially perform his duties hereunder, other than any
such failure resulting from the Executive's incapacity due to physical or
mental illness, or (2) the willful engaging by the Executive in conduct
materially injurious to the Bank, or (3) the willful violation by the
Executive of the provisions of Paragraphs 3, 7 or 9 hereof after notice
from the Bank and a failure to cure such violation within thirty (30) days
of said notice, or if said violation cannot be cured within thirty (30)
days, within a reasonable time thereafter if the Executive is diligently
attempting to cure the violation, or (4) the gross negligence of the
Executive in the performance of his duties or (5) receipt by the Bank of a
recommendation of any governmental body or entity having jurisdiction over
the Bank requiring or suggesting termination or removal of the Executive as
Chief Financial Officer or receipt of a written directive or order of any
governmental body or entity having jurisdiction over the Bank requiring
termination or removal of the Executive as Chief Financial Officer.
(d) The Executive may terminate his employment hereunder, (1) if his
health should become impaired to an extent that his treating physician
states that termination of employment is required because continued
performance of his duties hereunder are hazardous to his physical or mental
health or his life, or (2) for Good Reason. The term "Good Reason" shall
only mean: (i) any assignment to the Executive, without his consent, of any
duties other than those contemplated by, or any limitation of the powers of
the Executive not contemplated by his job description and/or Paragraph 2
hereof, or (ii) a reduction of the Executive's rate of compensation as
provided in Paragraph 4 hereof, or (iii) failure of the Bank to comply with
Paragraph 5 hereof, or (iv) any other material breach by the Bank of this
Agreement, provided that the Executive shall have given the Board of
Directors thirty (30) days written notice of such breach and such breach
shall not have been cured within such thirty (30) day period after receipt
of notice, or (v) any Change of Control (as defined herein).
12. PAYMENTS UPON TERMINATION.
-------------------------
(a) If the Executive's employment shall be terminated because of his
death (paragraph 11a), disability (11b) or for Cause (11c), the Bank shall
pay the Executive his full Annual Direct Salary through the date of
termination at the rate in effect at the time of termination and any other
amounts owing to the Executive at the date of termination, and the Bank
shall have no further obligations to the Executive under this Agreement.
(b) If the Bank gives Executive notice of nonrenewal of the Agreement
pursuant to Paragraph 1, and the Executive continues to work full time for
the Bank during the remaining one (1) year term, Bank shall pay Executive's
salary and shall provide Executive the benefits applicable to other full
time employees until the end of the one (1) year term, and the Bank shall
have no further obligation to the Executive.
(c) If the Executive's employment is terminated by the Bank (other
than pursuant to Paragraphs 11(a), 11(b) or 11(c) hereof or as a result of
nonrenewal of this Agreement (Paragraph 1)), or if the Executive shall
terminate his employment for Good Reason, then the Bank shall pay the
Executive his full Annual Direct Salary from the date of termination
through the last day of the term of this Agreement. The Bank shall maintain
in full force and effect, for the continued benefit of the Executive for
the full term of this Agreement, all employee insurance policies, benefit
plans and programs to which the Executive was entitled prior to the date of
termination, if the Executive's continued participation is possible under
the general terms and provisions of such insurance policies, plans and
programs. In the event that the Executive's participation in any such
policy, plan or program is prohibited by the terms of the policy, plan or
program, the Executive shall be entitled to receive an amount equal to the
annual contribution, payments, credits or allocations made by the Bank to
him, to his account or on his behalf under any such plans and programs from
which his continued participation is prohibited.
13. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this
------------------------------
Agreement by either the Bank or the Executive, each hereby waive to the fullest
extent permitted by law the right to assert any claim against the other for
punitive or exemplary damages. Furthermore, Executive hereby waives any and all
rights to assert claims or recover damages in an amount in excess of that set
forth in Paragraph 12(b).
14. DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, the
-------------------------------
term "Change of Control" shall mean: A change in control of the Bank 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 Bank was 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 (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Bank, or any "person" who on the date of the public opening of
the Bank is a director, officer or initial shareholder of the Bank is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Bank representing twenty-five
percent (25%) or more of the combined voting power of the Bank's then
outstanding securities, provided, however, that transfer by gift, trust or by
Last Will or applicable testate law shall not be deemed to cause a Change of
Control for purposes of this Agreement, or (b) during any period of two
consecutive years during the term of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of the 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.
15. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this
---------------------------------------
Agreement, the date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, acquire the beneficial ownership of
twenty-five percent (25%) or more of the Bank's voting securities, or
(b) the date of the transfer of all or substantially all of the Bank's
assets, or
(c) the date on which a merger, consolidation or combination is
consummated, as applicable, or
(d) the date on which individuals who formerly constituted a majority
of the Board of Directors of the Bank ceased to be a majority, provided
however that subsections (a) and (d) shall not apply if such events are the
result of additional shares being issued as approved by the Board of
Directors.
16. NOTICE. For the purposes of this Agreement, notices and all other
------
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: Xxxx Xxxxxxx
0 Xxxxxxx Xxx
Xxxxxxx, XX 00000
If to the Bank: Xxxx X. Xxxxxx
AMERICAN BANK OF THE LEHIGH VALLEY
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or to such other address as any 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.
17. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
----------
upon the Executive, his personal representatives, heirs or assigns and the Bank
and any of successors or assigns of the Bank.
18. SEVERABILITY. If any provision of this Agreement is declared
------------
unenforceable for any reason, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect.
19. AMENDMENT. This Agreement may be amended or cancelled only by mutual
---------
agreement of the parties in writing.
20. ATTORNEY'S FEES AND COSTS. If any action at law is necessary to enforce
--------------------------
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reimbursement by the non-prevailing party of reasonable attorney's fees,
costs, or disbursements.
21. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. If the Executive dies prior to
---------------------------------------
the expiration of the term of employment, any monies that may be due him from
the Bank under this Agreement as of the date of death shall be paid to the
executor, administrator, or other personal representative of the Executive's
estate or the beneficiaries or legatees entitled to such monies under the
decedent Executive's last will or applicable testate laws.
22. LAW GOVERNING. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the Commonwealth of Pennsylvania. The parties agree
in the event of a dispute under this Agreement to submit to the jurisdiction of
the Court of Common Pleas of Lehigh County and that venue is proper thereunder.
23. 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 this Agreement contains all the covenants and
agreements between the parties with respect to the employment.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed in their respective names
and, in the case of the Bank, by its authorized representatives the day and year
above mentioned.
ATTEST: AMERICAN BANK OF THE
LEHIGH VALLEY
\s\ Xxxx X. Xxxxxx By: \s\ Xxxxxxxxx X. Xxxxxx
------------------------------------ ----------------------------------
Date: March 1, 1999
----------------------------------
WITNESS: \s\ Xxxxxxxxx X. Xxxxxxxxx \s\ Xxxx Xxxxxxx
------------------------------------ ----------------------------------
XXXX XXXXXXX
Date: March 1, 1999
----------------------------------
