AGREEMENT FOR SEVERANCE PAYMENTS IN THE EVENT OF TERMINATION OF EMPLOYMENT UNDER CERTAIN CIRCUMSTANCES
EXHIBIT
10.2
CHANGE IN CONTROL AGREEMENT OF XXXXXXXX A. GLASS
AGREEMENT FOR
SEVERANCE PAYMENTS
IN THE EVENT OF
TERMINATION OF EMPLOYMENT
UNDER CERTAIN CIRCUMSTANCES
THIS AGREEMENT, by and between First
Commonwealth Financial Corporation, a bank holding company organized and
existing under the laws of the Commonwealth of Pennsylvania and with its
principal place of business in Indiana, Pennsylvania (the "Employer")
and Xxxxxxxx A. Glass of Indiana , Pennsylvania (the
"Executive") made this 7th day of February , 1998.
WITNESSETH
WHEREAS, the Executive is presently
employed by First Commonwealth Bank, a subsidiary of the Employer, as its
President;
WHEREAS, the Employer wishes to
induce the Executive to continue as President of First Commonwealth Bank and,
accordingly, to provide certain employment security to said Executive in the
event of a "change in control" (as hereinafter defined);
WHEREAS, the Employer believes that
it is in the best interest of its shareholders for the Executive to continue in
his position on an objective and impartial basis and without distraction or
conflict of interest as a result of a possible, or actual "change in
control" (as hereinafter defined); and
WHEREAS, in consideration, inter alia, of this Agreement the
Executive is willing to continue as the President of First Commonwealth Bank;
NOW THEREFORE, IN CONSIDERATION OF
THE EXECUTIVE CONTINUING AS THE PRESIDENT OF FIRST COMMONWEALTH BANK AND OF THE
MUTUAL PREMISES HEREIN CONTAINED, THE EXECUTIVE AND THE EMPLOYER, INTENDING TO
BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS, TO WIT:
ARTICLE I
DEFINITIONS
1. A
"Change in Control" for the purpose of this Agreement, shall be
deemed to have occurred if, at any time, any person or group of persons acting
in concert (within the meaning of Section 13(d) of the Securities Exchange Act
of 1934, as amended, and the regulations of the Securities and Exchange
Commission promulgated thereunder) shall acquire legal or beneficial ownership
interest, or voting rights, in twenty-five percent (25%) or more of the common
voting stock of First Commonwealth Financial Corporation.
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2. A
"Triggering Event" for the purpose of this Agreement shall be deemed
to have occurred if, on or after the occurrence of a Change in Control, any of
the following shall occur, viz:
(a) Within two (2) years from the date on which the Change In Control occurred, the Employer shall terminate the employment of the Executive, other than in the case of a Termination For Cause, as herein defined;
(b) Within two (2) years from the date on which the Change In Control occurred, the Employer shall reduce the Executive's title, responsibilities, power or authority in comparison with his title, responsibilities, power or authority at the time of the Change In Control;
(c) Within two (2) years from the date on which the Change In Control occurred, the Employer shall assign the Executive duties which are inconsistent with the duties assigned to the Executive on the date on which the Change In Control occurred and which duties the Employer persists in assigning to the Executive despite the prior written objection of the Executive;
(d) Within two (2) years from the date in which the Change In Control occurred, the Employer shall reduce the Executive's base compensation, his group health, life, disability or other insurance programs (including any such benefits provided to the Executive's family), his pension, retirement or profit-sharing benefits or any benefits provided by the Employer's Employee Stock Ownership Plan, or any substitute therefore, or shall exclude him from any plan, program or arrangement in which the other executive officers of the Employer are included.
3. A "Termination For Cause" for the purpose of this Agreement shall be deemed to have occurred if:
(a) The Executive shall have committed a felony under the laws of the United States of America, or of any state or territory thereof, and shall have been convicted of the same, or shall have pled guilty or nolo contendere with respect to said charge, and the commission of said felony resulted in, or was intended to result in, a loss (monetary or otherwise) to the Employer or its clients, customers, directors, officers or employees, or
(b) The Executive shall have deliberately and intentionally failed and refused to perform his duties to the Employer (other than during such time as the Executive shall be incapacitated due to accident or illness or during his regularly scheduled vacation periods) for a period of thirty (30) consecutive days following the receipt by him of a notice from the Employer sent by certified mail, return receipt requested, setting forth in detail the facts upon which the Employer
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relies in concluding
that the Executive has deliberately and intentionally refused to perform his
duties and indicating with specificity the duties that the Employer demands
that the Executive perform forthwith.
ARTICLE II
SEVERANCE PAYMENT
Upon the occurrence of a Triggering
Event, the Employer shall pay to the Executive a severance benefit which shall
be in addition to any other compensation or remuneration to which the Executive
is, or shall become, entitled to receive from the Employer. Each severance payment shall be paid by the
Employer to the Executive on the first day of each calendar month commencing on
the first day of the month next following the month in which the Triggering
Event occurred, and be payable to the Executive or his beneficiary (as
hereinafter provided) for twenty-three (23) consecutive months thereafter, so
that a total of twenty-four (24) consecutive monthly payments shall be
made. The amount of each such payment
shall be equal to one-twelfth (1/12) of the Executive's annual base salary on
the date of the Change In Control. In
addition thereto, the Employer shall, at its expense, provide the Executive,
and his family, with life, health, disability and accidental death and
dismemberment insurance in an amount not less than that provided on the date on
which the Change In Control occurred, for the period during which the monthly
payments provided above are to be made.
ARTICLE III
LIMITATION ON PAYMENT OF BENEFITS
Notwithstanding anything to the
contrary herein contained, in no event shall any amount of severance payments
be paid to the extent that such amount constitutes "excess parachute
payments" to a "disqualified individual," as such terms are
defined by Section 280G of the Internal Revenue Code of 1986, as amended (26
USG 280G) and the regulations of the Secretary of the Treasury or his delegate
issued pursuant thereto.
ARTICLE IV
PAYMENTS ON DEATH
If the
Executive shall die after the occurrence of a Triggering Event, but prior to
the payment of all of the monthly severance payments required by Article II
hereof, then all remaining severance payments shall be paid to the beneficiary
herein provided at the same time, and in the same amount, as would have been
payable to the Executive (in accordance with Article II hereof) had he
survived. For this purpose, the
Executive's beneficiary shall mean the person or persons designated by the
Executive in a notice to the Employer,
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provided,
however than any such designation shall be revocable during the lifetime of the
Executive, and in the event that the Executive shall have given more than one such
notice during his lifetime, the beneficiary designated in the last such notice
shall govern. If the Executive shall
not have given such a notice prior to his death, the beneficiary shall be
deemed to be the same person that the Executive designated with respect to his
group life insurance program maintained by the Employer.
ARTICLE V
VOLUNTARY TERMINATION
OF EMPLOYMENT
If the Executive shall resign, or otherwise
voluntarily terminate, his employment with the Employer within a one (1) year
period commencing on the date that a Change In Control occurred, and on the
date of such resignation, or other voluntary termination of employment, he has
not yet attained the earliest normal retirement date under the provisions of
the Employer's Employee Stock Ownership Plan, Profit Sharing Plan, or other
qualified pension or profit-sharing plan of the Employer, then the Employer
shall pay to the Executive a severance benefit which shall commence on the
first day of the month following the date of such resignation or other
termination of employment and shall be payable thereafter for the same period,
in the same amount and under the same conditions as if such payments are made
following a Triggering Event in accordance with Article II hereof.
ARTICLE VI
COMPETITIVE EMPLOYMENT
If during the period that the Executive is
receiving severance payments as herein provided, he shall become an officer,
director, employee or consultant to a bank or bank holding company which
provides (or whose subsidiaries or affiliates provide) trust, loan or retail
banking facilities in the same county as such facilities are provided by any
subsidiary or affiliate of the Employer, and which is in direct competition
with the Employer, then the Employer may elect to notify the Executive by
certified mail, return receipt requested, that it considers the employment of
the Executive as competitive employment in accordance with this Article of this
Agreement.
The Executive may, within sixty (60)
days of receipt of such notice from the Employer terminate such competitive
employment and certify the same to the Employer by certified mail, return
receipt requested. However, if he shall
fail to so terminate his employment and certify the same to the Employer within
sixty (60) days of receipt of the notice as herein provided, no subsequent
severance payments shall be due or payable following such sixtieth day,
notwithstanding any other provision of this Agreement. However, this provision
shall in no event affect Executive's entitlement to receive all severance
payments due prior to the sixtieth day after receipt by the Executive of such
notice, nor shall it in any way require Executive not to engage in such
competitive employment.
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ARTICLE VII
SETOFF
No amounts otherwise due or payable under
this Agreement shall be subject to setoff or counterclaim by either party
hereto.
ARTICLE VIII
ATTORNEY'S FEES
All attorney's fees and related expenses incurred by Executive in connection with or relating to the enforcement by him of his rights under this Agreement shall be paid for by the Employer.
ARTICLE IX
SUCCESSORS AND PARTIES
IN INTEREST
This Agreement shall be binding upon
and shall inure to the benefit of the Employer and its successors and assigns,
including, without limitation, any corporation which acquires, directly or
indirectly, by purchase, merger, consolidation or otherwise, all or
substantially all of the business or assets of the Employer. Without limitation of the foregoing, the
Employer shall require any such successor, by agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that it is required to be
performed by the Employer.
This Agreement shall be binding upon
and shall inure to the benefit of the Executive, his heirs at law and his
personal representatives.
ARTICLE X
ATTACHMENT
Neither this Agreement nor any
benefits payable hereunder shall be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge or to execution,
attachment, levy or similar process at law, whether voluntary or involuntary.
ARTICLE XI
EMPLOYMENT CONTRACT
This Agreement shall not in any way
constitute an employment agreement between the Employer and the Executive and
it shall not oblige the Executive to continue in the employ of Employer, nor
shall it oblige the Employer to continue to employ the Executive, but it shall
merely require the Employer to pay severance benefits to the Executive under
certain circumstances, as aforesaid.
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ARTICLE XII
RIGHTS UNDER OTHER PLANS
AND AGREEMENTS
The severance benefits herein
provided shall be in addition to, and is not intended to reduce, restrict or
eliminate any benefit to which the Executive may otherwise be entitled by
virtue of his termination of employment or otherwise.
ARTICLE XIII
NOTICES
All notices and other communications
required to be given hereunder shall be in writing and shall be deemed to have
been delivered or made when mailed, by certified mail, return receipt
requested, if to the Executive, to the last address which the Executive shall
provide to the Employer, in writing, for this purpose, but if the Executive has
not then provided such an address, then to the last address of the Executive
then on file with the Employer; and if to the Employer, then to the last
address which the Employer shall provide to the Executive, in writing, for this
purpose, but if the Employer has not then provided the Executive with such an
address, then to:
President and Chief
Executive Officer
First Commonwealth Financial Corporation
Old Courthouse Square
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
ARTICLE XIV
GOVERNING LAW AND
JURISDICTION
This Agreement shall be governed by,
and construed in accordance with, the laws of the Commonwealth of Pennsylvania,
except for the laws governing conflict of laws. In the event that either party shall institute suit or other
legal proceeding, whether in law or equity, the Courts of the Commonwealth of
Pennsylvania shall have exclusive jurisdiction with respect thereto.
ARTICLE XV
ENTIRE AGREEMENT
This Agreement constitutes the entire
understanding between the Employer and the Executive concerning the subject
matter hereof and supersedes all prior written or oral agreements or
understandings between the parties hereto.
No term or provision of this Agreement may be changed, waived, amended
or terminated except by a written instrument of equal formality to this Agreement.
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IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties have hereunto set their hands and seals as of the date and year first above written.
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(Corporate Seal) |
FIRST
COMMONWEALTH |
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Attest: |
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/S/XXXXX X. TOMB. JR. |
By:/S/XXXXXX X. O'DELL |
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Corporate Secretary |
XXXXXX X. O'DELL |
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President
and Chief |
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/S/XXXXX X. XXXXXXX |
/S/XXXXXXXX A. GLASS |
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Witness |
XXXXXXXX A. GLASS |
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