CHANGE OF CONTROL AGREEMENT
EXHIBIT
10.18
THIS
AGREEMENT is made as of the
day
of
, 2008,
between UNION NATIONAL FINANCIAL CORPOATION, a Pennsylvania business corporation
having a place of business at 000 Xxxxxx Xxxx, Xxxxxxxxxxxx, 00000
(“Corporation”), UNION NATIONAL COMMUNITY BANK (“Bank”) a national banking
association having a place of business at 000 Xxxxxx Xxxx, Xxxxxxxxxxxx, 00000
and ___________ (“Executive”), an individual residing in Pennsylvania
(collectively the “Parties” and, individually, sometimes a
“Party”).
W
I T N E
S S E T H:
WHEREAS,
the Corporation is a registered bank holding company;
WHEREAS,
the Bank is a subsidiary of the Corporation;
WHEREAS,
the Executive has been employed by the Bank as __________________;
WHEREAS,
this Agreement will become operative only upon a Change of Control (as defined
herein); and
WHEREAS,
the purpose of this Agreement is to define certain severance benefits that
will
be paid by the Corporation in the event of a Change of Control (as defined
herein), but is not intended to affect, nor does it affect, the terms of the
Executive’s employment at will, in the absence of a Change of Control (as
defined herein) of the Corporation.
NOW
THEREFORE, in consideration of the Executive’s service to the Corporation and of
the mutual covenants, undertakings and agreements set forth herein and intending
to be legally bound hereby, the Parties agree as follows:
1. TERM.
The
term of the Agreement shall be effective as of the day and year written above,
and shall continue until either Executive or Corporation or Bank gives the
other
written notice of termination of employment, with or without cause; provided,
however, that during the period of time between the execution of an agreement
to
effect a Change of Control (as defined herein) and the actual Date of Change
of
Control (as defined herein), termination of the Executive’s employment shall
only be for Cause (as defined herein).
2. DEFINITION
OF CAUSE. The term “Cause” shall be defined, for purposes of this Agreement, as
the occurrence of one or more of the following:
(i) Executive’s
willful failure to perform the duties assigned to him, other than a failure
resulting from Executive’s incapacity because of physical or mental
illness;
(ii) Executive’s
failure to follow the good faith lawful instructions of the President and Chief
Executive Officer of the Corporation or his designee with respect to its
operations;
(iii) Executive’s
willful engagement in misconduct which is materially injurious to the
Corporation or the Bank;
(iv) Executive’s
intentional violation of the provisions of this Agreement;
(v)
Executive’s
willful and deliberate violation of any banking law or regulation, or any final
cease and desist order issued by a bank regulatory authority;
(vi) Executive’s
conviction of or entering into a plea of nolo contender to a felony, a crime
of
falsehood or to a crime involving moral turpitude;
(vii)
Executive’s
suspension, removal, or prohibition from being an institutional-affiliated
party
by a final order of an appropriate federal banking agency pursuant to Section
8(e) or 8(g) of the Federal Deposit Insurance Act or by the Office of the
Comptroller of the Currency pursuant to federal law;
(viii) Executive’s
commission of any act of moral turpitude or other illicit or illegal conduct
which brings public discredit or results in financial loss to the Corporation
or
the Bank;
(ix) Executive’s
dishonesty or gross negligence in the performance of his duties;
(x) Executive’s
breach of fiduciary duty involving personal gain;
(xi) unlawful
harassment by the Executive against employees, customers, business associates,
contractors, or vendors of the Corporation or Bank which results or may be
reasonably expected to result in material liability to the Corporation or
Bank;
(xii) 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;
(xiii)
Executive’s
commission of any act of fraud, misappropriation, or personal dishonesty;
(xiv) insubordination
as determined by an affirmative vote of seventy-five percent (75%) of the Board
of Directors of the Corporation or Bank; or
(xv) the
existence of any material conflict between the interests of the Corporation
or
Bank and the Executive that is not disclosed in writing by the Executive to
the
Corporation and Bank and approved in writing by the Boards of Directors of
the
Corporation and Bank.
3. DEFINITION
OF CHANGE OF CONTROL. As
used
in this Agreement, “Change of Control” shall mean: A change of control (other
than one occurring by reason of an acquisition of the Corporation by Executive)
wherein the Board of Directors certifies that one of the following has occurred:
(a)
any
“person” or more than one person acting as a group (as such term is defined in
Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and any
Internal Revenue Guidance and regulations under Section 409A of the Code),
other
than Bank and Corporation or any “person” who on the date hereof is a director
or officer of Bank and Corporation, acquires ownership of stock of the
Corporation together with stock held by such person constituting more than
fifty
percent (50%) of the total fair market value or total voting power of the stock
of the Corporation; or
2
(b)
any
“person” or more than one person acting as a group (as such term is defined in
Section 409A of the Code and any Internal Revenue Guidance and regulations
under
Section 409A of the Code), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Corporation possessing thirty-five percent (35%)
or
more of the total voting power of the stock of the Corporation; or
(c)
during any period of one (1) year during this Agreement, individuals who at
the
beginning of such period constitute the Board of Directors of Corporation 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 (2/3) of
the
directors then in office who were directors at the beginning of the period.
4. 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 any person or more than one person acting as a group acquire
ownership of fifty percent (50%) or more of the total fair market value or
total
voting power of the stock of the Corporation;
(b) the
date
on which any person or more than one person acting as a group acquires ownership
of stock of the Corporation possessing thirty-five percent (35%) or more of
the
total voting power of the stock of the Corporation;
(c)
the
date
on which individuals who formerly constituted a majority of the Board of
Directors of the Corporation under Section 3(c) hereof and the replacement
Director’s otherwise approved under Section 3(c), ceased to be a majority within
a one year period.
5. TERMINATION
OF EMPLOYMENT FOLLOWING A CHANGE OF CONTROL.
If
a
Change of Control (as defined in Section 3 of this Agreement) shall occur and
thereafter, there shall be:
(i) any
involuntary termination of Executive’s employment (other than for the reasons
set forth in Section 2 of this Agreement);
(ii)
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 of
Control;
(iii) any
reduction in Executive’s Annual Base Salary in effect on the date of the Change
of Control or as the same may be increased from time to time after the Change
of
Control; or
(iv) 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 of Control, or the
taking of any action that would materially reduce any of such benefits in effect
at the time of the Change of Control;
then,
at
the option of Executive, exercisable by Executive within ninety (90) days of
the
occurrence of any of the foregoing events, Executive shall provide notice to
Bank and Corporation of the existence of one of the above conditions and provide
Bank and Corporation thirty (30) days in which to cure such condition. In the
event that Bank and Corporation do not cure the condition within thirty (30)
days of such notice, Executive may resign from employment by written notice
(the
“Notice of Termination”) delivered to Bank and Corporation and the provisions of
Section 6 shall thereupon apply.
6. PAYMENTS
UPON TERMINATION. In the event that Executive delivers a Notice of Termination
to Corporation and Bank (as defined in Section 5 of this Agreement), Executive
shall, upon entering into a release agreement in favor of Corporation, be
entitled to receive the compensation and benefits set forth
below:
3
If,
at
the time of termination of Executive’s employment, a “Change of Control” (as
defined in Section 3 of this Agreement) has also occurred, Bank shall pay
Executive an amount equal to and no greater than twelve (12) months of the
Executive’s Agreed Compensation as defined in Section 7, plus any bonus deferred
or awarded but not yet paid, minus applicable taxes and withholdings, which
shall be payable over an twelve (12) month period at the same times as salaries
are payable to employees of the Bank. In addition, for a period of twelve (12)
months from the date of termination of employment, or until Executive secures
substantially similar benefits through other employment, whichever shall first
occur, the Bank shall also maintain in full force and effect, for the continued
benefit of the Executive, Executive’s health insurance (excluding dental and
vision insurance) benefits to which the Executive was entitled to participate
as
of the date of termination. If Corporation, Bank, or their successor cannot
provide such benefits under the terms of the plan, Bank, Corporation, or their
successor shall reimburse Executive in an amount equal to the monthly premium
paid by him to obtain substantially similar employee benefits which he enjoyed
prior to termination, which reimbursement shall continue until the expiration
of
twelve (12) months from the date of termination of employment or until Executive
secures substantially similar benefits through other employment, whichever
shall
first occur, subject to Code Section 409A if applicable.
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 Section 280G of
the
Code, then Corporation shall be required only to pay to Executive the amount
determined to be deductible under Section 280G.
Notwithstanding
any other provision, in the event that Executive is determined to be a key
employee as that term is defined in Section 409A of the Code, no payment that
is
determined to be deferred compensation subject to Section 409A of the Code
shall
be made until one day following six months from the date of separation of
service as that term is defined in Section 409A of the Code.
7.
DEFINITION
OF “EXECUTIVE’S AGREED COMPENSATION”. For purposes of this Agreement,
“Executive’s Agreed Compensation” shall be defined as the Executive’s fixed,
gross, base annual salary then in effect as determined by the Board from time
to
time and shall not include any benefits, bonuses, incentives or other
compensation.
8. 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 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.
9. 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, 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.
10. 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.
4
11. 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.
12. ASSIGNMENT.
This Agreement shall not be assignable by any party, except by Corporation
and
Bank to any successor in interest to their respective businesses.
13. 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.
14. NO
EMPLOYMENT CONTRACT. This Agreement is not an employment contract. Nothing
contained herein shall guarantee or assure Executive of continued employment
by
Corporation. Rather, Corporation’s and Bank’s obligations to Executive hereunder
shall arise only if Executive continues to be employed by Corporation and Bank
in his present or in a higher capacity and, then, only in the event the
conditions described herein for payment to Executive have been met.
15. SUCCESSORS;
BINDING AGREEMENT.
|
(a)
|
Corporation
and Bank will require any successor (whether direct or indirect,
by
purchase, merger, consolidation, or otherwise) to all or substantially
all
of the businesses and/or assets of Corporation and Bank to expressly
assume and agree to perform this Agreement in the same manner and
to the
same extent that Corporation and Bank would be required to perform
it if
no such succession had taken place. Failure by Corporation and Bank
to
obtain such assumption and agreement prior to the effectiveness of
any
such succession shall constitute a breach of this Agreement and the
provisions of Section 6 of this Agreement shall apply. As used in
this
Agreement, “Corporation” and “Bank” shall mean Corporation and Bank, as
defined previously and any successor to their respective businesses
and/or
assets as aforesaid which assumes and agrees to perform this Agreement
by
operation of law or otherwise.
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|
(b)
|
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.
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16. 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.
17. 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. 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 and the regulations promulgated thereunder.
18. 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.
5
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ATTEST:
|
UNION
NATIONAL FINANCIAL CORPORATION
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|||
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By
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||||
|
Xxxx
X. Xxxxxx
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||||
|
Chairman,
President and Chief Executive Officer
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||||
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UNION
NATIONAL COMMUNITY BANK
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||||
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By
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||||
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Xxxx
X. Xxxxxx
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||||
|
Chairman,
President and Chief Executive Officer
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WITNESS:
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EXECUTIVE
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6
EXHIBIT
10.18
THIS
AGREEMENT is made as of the
day
of
, 2008,
between UNION NATIONAL FINANCIAL CORPOATION, a Pennsylvania business corporation
having a place of business at 000 Xxxxxx Xxxx, Xxxxxxxxxxxx, 00000
(“Corporation”), UNION NATIONAL COMMUNITY BANK (“Bank”) a national banking
association having a place of business at 000 Xxxxxx Xxxx, Xxxxxxxxxxxx, 00000
and ____________ (“Executive”), an individual residing in Pennsylvania
(collectively the “Parties” and, individually, sometimes a
“Party”).
W
I T N E
S S E T H:
WHEREAS,
the Corporation is a registered bank holding company;
WHEREAS,
the Bank is a subsidiary of the Corporation;
WHEREAS,
the Executive has been employed by the Bank as ______________________;
WHEREAS,
this Agreement will become operative only upon a Change of Control (as defined
herein); and
WHEREAS,
the purpose of this Agreement is to define certain severance benefits that
will
be paid by the Corporation in the event of a Change of Control (as defined
herein), but is not intended to affect, nor does it affect, the terms of the
Executive’s employment at will, in the absence of a Change of Control (as
defined herein) of the Corporation.
NOW
THEREFORE, in consideration of the Executive’s service to the Corporation and of
the mutual covenants, undertakings and agreements set forth herein and intending
to be legally bound hereby, the Parties agree as follows:
1. TERM.
The
term of the Agreement shall be effective as of the day and year written above,
and shall continue until either Executive or Corporation or Bank gives the
other
written notice of termination of employment, with or without cause; provided,
however, that during the period of time between the execution of an agreement
to
effect a Change of Control (as defined herein) and the actual Date of Change
of
Control (as defined herein), termination of the Executive’s employment shall
only be for Cause (as defined herein).
7
2. DEFINITION
OF CAUSE. The term “Cause” shall be defined, for purposes of this Agreement, as
the occurrence of one or more of the following:
(i) Executive’s
willful failure to perform the duties assigned to him, other than a failure
resulting from Executive’s incapacity because of physical or mental
illness;
(ii) Executive’s
failure to follow the good faith lawful instructions of the President and Chief
Executive Officer of the Corporation or his designee with respect to its
operations;
(iii) Executive’s
willful engagement in misconduct which is materially injurious to the
Corporation or the Bank;
(iv) Executive’s
intentional violation of the provisions of this Agreement;
(v)
Executive’s
willful and deliberate violation of any banking law or regulation, or any final
cease and desist order issued by a bank regulatory authority;
(vi) Executive’s
conviction of or entering into a plea of nolo contender to a felony, a crime
of
falsehood or to a crime involving moral turpitude;
(vii)
Executive’s
suspension, removal, or prohibition from being an institutional-affiliated
party
by a final order of an appropriate federal banking agency pursuant to Section
8(e) or 8(g) of the Federal Deposit Insurance Act or by the Office of the
Comptroller of the Currency pursuant to federal law;
(viii) Executive’s
commission of any act of moral turpitude or other illicit or illegal conduct
which brings public discredit or results in financial loss to the Corporation
or
the Bank;
(ix) Executive’s
dishonesty or gross negligence in the performance of his duties;
(x) Executive’s
breach of fiduciary duty involving personal gain;
(xi) unlawful
harassment by the Executive against employees, customers, business associates,
contractors, or vendors of the Corporation or Bank which results or may be
reasonably expected to result in material liability to the Corporation or
Bank;
(xii) 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;
(xiii)
Executive’s
commission of any act of fraud, misappropriation, or personal dishonesty;
(xiv) insubordination
as determined by an affirmative vote of seventy-five percent (75%) of the Board
of Directors of the Corporation or Bank; or
(xv) the
existence of any material conflict between the interests of the Corporation
or
Bank and the Executive that is not disclosed in writing by the Executive to
the
Corporation and Bank and approved in writing by the Boards of Directors of
the
Corporation and Bank.
3. DEFINITION
OF CHANGE OF CONTROL. As
used
in this Agreement, “Change of Control” shall mean: A change of control (other
than one occurring by reason of an acquisition of the Corporation by Executive)
wherein the Board of Directors certifies that one of the following has occurred:
(a)
any
“person” or more than one person acting as a group (as such term is defined in
Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and any
Internal Revenue Guidance and regulations under Section 409A of the Code),
other
than Bank and Corporation or any “person” who on the date hereof is a director
or officer of Bank and Corporation, acquires ownership of stock of the
Corporation together with stock held by such person constituting more than
fifty
percent (50%) of the total fair market value or total voting power of the stock
of the Corporation; or
8
(b)
any
“person” or more than one person acting as a group (as such term is defined in
Section 409A of the Code and any Internal Revenue Guidance and regulations
under
Section 409A of the Code), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Corporation possessing thirty-five percent (35%)
or
more of the total voting power of the stock of the Corporation; or
(c)
during any period of one (1) year during this Agreement, individuals who at
the
beginning of such period constitute the Board of Directors of Corporation 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 (2/3) of
the
directors then in office who were directors at the beginning of the period.
4. 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 any person or more than one person acting as a group acquire
ownership of fifty percent (50%) or more of the total fair market value or
total
voting power of the stock of the Corporation;
(b) the
date
on which any person or more than one person acting as a group acquires ownership
of stock of the Corporation possessing thirty-five percent (35%) or more of
the
total voting power of the stock of the Corporation;
(c)
the
date
on which individuals who formerly constituted a majority of the Board of
Directors of the Corporation under Section 3(c) hereof and the replacement
Director’s otherwise approved under Section 3(c), ceased to be a majority within
a one year period.
5. TERMINATION
OF EMPLOYMENT FOLLOWING A CHANGE OF CONTROL.
If
a
Change of Control (as defined in Section 3 of this Agreement) shall occur and
thereafter, there shall be:
(i) any
involuntary termination of Executive’s employment (other than for the reasons
set forth in Section 2 of this Agreement);
(ii)
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 of
Control;
(iii) any
reduction in Executive’s Annual Base Salary in effect on the date of the Change
of Control or as the same may be increased from time to time after the Change
of
Control; or
(iv) 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 of Control, or the
taking of any action that would materially reduce any of such benefits in effect
at the time of the Change of Control;
then,
at
the option of Executive, exercisable by Executive within ninety (90) days of
the
occurrence of any of the foregoing events, Executive shall provide notice to
Bank and Corporation of the existence of one of the above conditions and provide
Bank and Corporation thirty (30) days in which to cure such condition. In the
event that Bank and Corporation do not cure the condition within thirty (30)
days of such notice, Executive may resign from employment by written notice
(the
“Notice of Termination”) delivered to Bank and Corporation and the provisions of
Section 6 shall thereupon apply.
6. PAYMENTS
UPON TERMINATION. In the event that Executive delivers a Notice of Termination
to Corporation and Bank (as defined in Section 5 of this Agreement), Executive
shall, upon entering into a release agreement in favor of Corporation, be
entitled to receive the compensation and benefits set forth
below:
9
If,
at
the time of termination of Executive’s employment, a “Change of Control” (as
defined in Section 3 of this Agreement) has also occurred, Bank shall pay
Executive an amount equal to and no greater than eighteen (18) months of the
Executive’s Agreed Compensation as defined in Section 7, plus any bonus deferred
or awarded but not yet paid, minus applicable taxes and withholdings, which
shall be payable over an eighteen (18) month period at the same times as
salaries are payable to employees of the Bank. In addition, for a period of
eighteen (18) months from the date of termination of employment, or until
Executive secures substantially similar benefits through other employment,
whichever shall first occur, the Bank shall also maintain in full force and
effect, for the continued benefit of the Executive, Executive’s health insurance
(excluding dental and vision insurance) benefits to which the Executive was
entitled to participate as of the date of termination. If Corporation, Bank,
or
their successor cannot provide such benefits under the terms of the plan, Bank,
Corporation, or their successor shall reimburse Executive in an amount equal
to
the monthly premium paid by him to obtain substantially similar employee
benefits which he enjoyed prior to termination, which reimbursement shall
continue until the expiration of eighteen (18) months from the date of
termination of employment or until Executive secures substantially similar
benefits through other employment, whichever shall first occur, subject to
Code
Section 409A if applicable.
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 Section 280G of
the
Code, then Corporation shall be required only to pay to Executive the amount
determined to be deductible under Section 280G.
Notwithstanding
any other provision, in the event that Executive is determined to be a key
employee as that term is defined in Section 409A of the Code, no payment that
is
determined to be deferred compensation subject to Section 409A of the Code
shall
be made until one day following six months from the date of separation of
service as that term is defined in Section 409A of the Code.
7.
DEFINITION
OF “EXECUTIVE’S AGREED COMPENSATION”. For purposes of this Agreement,
“Executive’s Agreed Compensation” shall be defined as the Executive’s fixed,
gross, base annual salary then in effect as determined by the Board from time
to
time and shall not include any benefits, bonuses, incentives or other
compensation.
8. 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 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.
9. 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, 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.
10. 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.
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11. 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.
12. ASSIGNMENT.
This Agreement shall not be assignable by any party, except by Corporation
and
Bank to any successor in interest to their respective businesses.
13. 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.
14. NO
EMPLOYMENT CONTRACT. This Agreement is not an employment contract. Nothing
contained herein shall guarantee or assure Executive of continued employment
by
Corporation. Rather, Corporation’s and Bank’s obligations to Executive hereunder
shall arise only if Executive continues to be employed by Corporation and Bank
in his present or in a higher capacity and, then, only in the event the
conditions described herein for payment to Executive have been met.
15. SUCCESSORS;
BINDING AGREEMENT.
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(a)
|
Corporation
and Bank will require any successor (whether direct or indirect,
by
purchase, merger, consolidation, or otherwise) to all or substantially
all
of the businesses and/or assets of Corporation and Bank to expressly
assume and agree to perform this Agreement in the same manner and
to the
same extent that Corporation and Bank would be required to perform
it if
no such succession had taken place. Failure by Corporation and Bank
to
obtain such assumption and agreement prior to the effectiveness of
any
such succession shall constitute a breach of this Agreement and the
provisions of Section 6 of this Agreement shall apply. As used in
this
Agreement, “Corporation” and “Bank” shall mean Corporation and Bank, as
defined previously and any successor to their respective businesses
and/or
assets as aforesaid which assumes and agrees to perform this Agreement
by
operation of law or otherwise.
|
|
(b)
|
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.
|
16. 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.
17. 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. 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 and the regulations promulgated thereunder.
18. 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.
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|
ATTEST:
|
UNION
NATIONAL FINANCIAL CORPORATION
|
|||
|
By
|
||||
|
Xxxx
X. Xxxxxx
|
||||
|
Chairman,
President and Chief Executive Officer
|
||||
|
UNION
NATIONAL COMMUNITY BANK
|
||||
|
By
|
||||
|
Xxxx
X. Xxxxxx
|
||||
|
Chairman,
President and Chief Executive Officer
|
||||
|
WITNESS:
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EXECUTIVE
|
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