EMPLOYMENT AGREEMENT
Exhibit
10.2
PENNSYLVANIA
COMMERCE BANCORP, INC. AND
COMMERCE
BANK/HARRISBURG
XXXX
X. XXXX
EFFECTIVE
DATE FEBRUARY 23, 2009
TABLE OF
CONTENTS
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1.
Employment and Term of Employment.
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1
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2.
Services and Duties.
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1
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3.
Compensation.
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2
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4.
Plans and Fringe Benefits.
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2
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5.
Termination by Commerce for Cause.
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3
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6.
Disability Leave and Death.
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3
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7.
Termination by Commerce without Cause and Termination Following a Change
in Control and for Good Reason.
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4
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8.
Change in Control and Good Reason.
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6
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9.
Confidential Information and Non-Competition.
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7
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10.
Successors and Assigns.
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8
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11.
Assignment.
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9
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12.
Source of Payment and Timing.
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9
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13.
Interest.
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9
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14.
Reimbursements and In-Kind Benefits.
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10
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15.
Notices.
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10
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16.
Amendment, Waiver and Termination.
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11
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17.
General Provisions.
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11
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This
Agreement is dated effective as of February 23, 2009, by and between
PENNSYLVANIA COMMERCE BANCORP, INC., a Pennsylvania corporation (“Commerce”),
and COMMERCE BANK/HARRISBURG, a Pennsylvania bank and a wholly-owned subsidiary
of Commerce (“COBH”), and Xxxx X. Xxxx (“Executive”).
BACKGROUND
Executive
is employed as Executive Vice President and Chief Financial Officer of
Commerce and COBH. The Boards of Directors of Commerce and COBH
(separately or collectively, the "Board") have determined that the services of
Executive in this capacity are valuable to Commerce and COBH. Accordingly, the
Board wishes to have Executive’s services available to Commerce for at least two
(2) years and to provide supplemental benefits to Executive should his/her
employment with Commerce terminate under certain circumstances or should he/she
die or become disabled before the termination of this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
here, and intending to be legally bound, the parties agree as
follows:
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1.
Employment and
Term of Employment.
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1.1
Commerce offers Executive employment, and Executive accepts such employment,
subject to all the terms and conditions of this Agreement, for a term of two (2)
years beginning on the date stated above, and, subject to automatic renewal and
extension as stated below and to Commerce's and COBH’s right to terminate
his/her employment as stated below. Notwithstanding anything provided to the
contrary, on each Anniversary Date of this Agreement, this Agreement and
Executive’s employment shall automatically be renewed and extended (upon the
same terms and conditions) for a new two (2) year term unless written notice by
either party is given pursuant to Section 1.2 below. "Term" means
the original two (2) year employment period, as well as any renewed or extended
periods as provided for in this Agreement. “Anniversary Date”
means March 1, 2010, as well as each annual March 1st
thereafter if this Agreement is automatically renewed or extended.
1.2
Either party may terminate this Agreement on any Anniversary Date of this
Agreement by giving to the other party written notice of termination no later
than ninety (90) days before any such Anniversary Date. As a result of the
foregoing notice being given to either party, the Term will have one (1) year
remaining from the applicable Anniversary Date, subject to the terms and
conditions of this Agreement.
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2.
Services and
Duties.
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2.1
During the Term, Executive shall be employed as Executive Vice President and
Chief Financial Officer of Commerce and COBH and shall have such powers and
duties as may from time to time be prescribed by the respective executive
officers and Board of
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Directors
of Commerce and COBH. Executive agrees to his/her continued employment and to
devote his/her full time and efforts to the business and affairs of Commerce,
COBH and their subsidiaries, if any, and to use his/her best efforts to promote
the interests of Commerce, COBH and their subsidiaries.
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3.
Compensation.
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3.1
Commerce shall pay the following compensation to Executive for all services to
be rendered by him/her under this Agreement and for all positions held by
him/her during the Term, payable at regular intervals in accordance with
Commerce's normal payroll practices now or subsequently in
effect: “base
salary” at the rate of $240,000 per year, subject to an annual review and
such upward adjustments as may be deemed appropriate by the Board or a
Board-designated Committee. The Board or Board-designated Committee
may approve an increase in salary for Executive, but shall have no obligation to
do so. For this Agreement, a “year” shall be deemed to
commence upon the signing of this Agreement and on January 1 of each subsequent
calendar year. Compensation for a portion of a year shall be
pro-rated.
3.2
During the Term, Commerce will reimburse Executive for all expenses incurred by
Executive which Commerce determines to be reasonable and necessary (in
accordance with its normal reimbursement practices now or subsequently in
effect) for Executive to carry out his/her duties under this
Agreement. Commerce will reimburse Executive for all continuing
education costs required to maintain Executive’s Pennsylvania CPA and his annual
dues to AICPA and PICPA.
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4.
Plans and Fringe
Benefits.
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4.1
During the Term, Executive shall be entitled to participate in any bonus
programs, incentive compensation plans, stock option plans or similar benefit or
compensation programs now or hereafter in effect which are generally made
available from time to time to executive officers of Commerce. For any period
less than a full year during the Term, Executive shall receive an amount equal
to the prorated portion of the compensation payable pursuant to such plan or
program. Any annual bonus (or prorated portion of an annual bonus)
earned and payable to Executive hereunder shall be paid on or after January 1
but not later than March 15 of the calendar year following the calendar year for
which the annual bonus (or prorated portion of an annual bonus) is
earned.
4.2
During the Term, Executive shall also be entitled to: (a) participate in all
fringe benefits as then in effect that are generally available to Commerce's
salaried officers including, without limitation, family medical, dental and
vision insurance programs, hospitalization coverage, life insurance coverage,
disability coverage and long-term care insurance; (b) automobile allowance and
(c) such other fringe benefits as the Board, or a designated Committee of the
Board, shall deem appropriate.
4.3
During the Term, Commerce shall continue to maintain and pay all premiums
payable on the Executive’s split dollar life insurance policy and long term
disability policy as the same exists on the Effective Date of this
Agreement.
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5.
Termination by
Commerce for Cause.
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5.1
Commerce shall have the right at any time to terminate Executive’s employment,
for cause, on thirty (30) days’ prior written notice to
Executive. For this Agreement, the term “for cause” means only the
following:
(i) If at
any time during the Term, Executive is indicted for, convicted of or enters a
plea of guilty or nolo contendere to, a felony, a crime of falsehood or a crime
involving fraud, moral turpitude or dishonesty; or
(ii) If
at any time during the Term, Executive willfully violates any of the covenants
or provisions of this Agreement including, without limitation, the willful
failure of Executive to perform his/her duties hereunder or the instructions of
the Board after written notice of such instructions (other than any such failure
resulting from Executive’s incapacity due to illness or disability) or Executive
engages in any conduct materially harmful to Commerce's business, and in either
case fails to cease such conduct or correct such conduct, as the case may be,
within thirty (30) days subsequent to receiving written notice from the Board
advising Executive of same (which conduct shall be specifically set forth in
such notice).
5.2 If
Executive’s employment shall terminate for cause, then Commerce shall pay
Executive in accordance with the regular payroll practices of Commerce,
his/her full base salary through the date of termination at the rate in effect
at the time notice of termination is given and Commerce shall have no further
obligations to Executive under this Agreement other than to pay Executive such
other compensation as may have accrued and be due him/her pursuant to Section 4
above.
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6.
Disability Leave
and Death.
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6.1 If
Executive becomes disabled while employed during the Term, this Agreement will
not terminate at such time but Executive shall be placed on disability leave
until the first to occur of the expiration of this Agreement or Executive’s
recovery from disability, but in no event longer than twenty-nine (29)
months. Commerce shall compensate Executive during the disability
leave at a rate equal to 70% of his/her annual base salary at the time he became
disabled. Commerce agrees that it will make the payments due under this Section
6.1 on the first day of each month, commencing with the first day of the month
following the month in which he is determined to be disabled, in an amount equal
to 1/12 of 70% of his/her annual base salary at the time he is determined to be
disabled. Such payments shall be reduced each month, however, by the amount of
any disability payments made to Executive under any Commerce-sponsored
disability insurance plan. The amount of the reduction under the
preceding sentence shall be computed as if Executive had elected to receive
monthly payments of disability benefits (regardless of the actual payment
frequency). If Executive becomes disabled as provided in this Section
6, then he shall nonetheless continue, after becoming so disabled and until the
end of the Term, to be entitled to receive at Commerce's expense such group
hospitalization coverage, life insurance coverage and disability coverage as is
generally made available from time to time to executive officers of Commerce, if
and to the extent permitted by the respective insurers of such coverage. Until
such time as Executive is
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determined
to be disabled, Executive shall continue to receive his/her full base salary and
other compensation and fringe benefits due him/her under Section 4
above.
6.2 For
this Agreement, Executive shall be deemed to have become "disabled” upon his/her
inability to perform the duties and services of the character contemplated by
this Agreement, because of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than six (6) months.
6.3 If
Executive dies during the Term while employed hereunder, then his/her employment
and his/her rights to compensation hereunder shall automatically terminate at
the close of the calendar week in which death occurs. Any amount owed
to Executive upon his/her death shall be paid to the personal representative of
Executive’s estate.
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7.
Termination by
Commerce without Cause and Termination Following a Change in Control and
for Good Reason.
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7.1 If
Commerce shall terminate Executive’s employment other than for cause or as
provided in Section 1.2 above, then:
(i)
Commerce shall pay to Executive his/her full base salary through the date of
termination in accordance with the regular payroll practices of Commerce, and
any compensation due him/her as provided in Section 4 above; and
(ii) In
lieu of any further salary payments to Executive, for a period subsequent to the
date of termination, Commerce shall pay as severance pay to Executive a lump sum
severance payment equal to two (2) times Executive’s average annual base salary
in effect during the twenty-four (24) months immediately preceding such
termination.
7.2 If
Executive shall terminate his/her employment following a Change in Control or for "Good Reason" (as defined in
Section 8 below) then:
(i)
Commerce shall pay to Executive his/her full base salary through the date of
termination in accordance with the regular payroll practices of Commerce
and any other compensation due him/her as provided in Section 4 above;
and
(ii) In
lieu of any further salary payments to Executive for a period subsequent to the
date of termination, Commerce shall pay as severance pay to Executive a lump sum
severance payment equal to two (2) times Executive’s average annual base salary
in effect during the twenty-four (24) months immediately preceding such
termination.
7.3 Upon
termination of Executive’s employment as set forth in either Section 7.1 or 7.2
above, Commerce shall have its independent certified public accountant promptly
determine the aggregate present value pursuant to Section 280G(d)(4) of the
Internal Revenue Code of 1986, as amended (the "Code"), of all amounts payable
to Executive under this Agreement, and of all other amounts payable to Executive
upon or by reason of his/her termination which are
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determined
in good faith by Commerce’s independent certified public accountant to be "parachute payments" (as
defined in Section 280G(b)(2) of the Code and the regulations promulgated
thereunder) made pursuant to agreements or plans which are subject to Section
280G. Such determination of present value and of other amounts constituting
"parachute payments" is binding; provided that if Executive obtains an opinion
of counsel satisfactory to Commerce or an Internal Revenue Service ruling
to the effect that the method of determining present value was improper or that
specified payments did not constitute "parachute payments," calculations will be
made in accordance with such opinion or ruling. The determinations pursuant to
this Section shall not change the form of payment (other than reduce, if
necessary) or delay the payment of amounts due Executive under this
Agreement. In the event the aggregate present value of all benefits
under this Agreement and other "parachute payments" is equal to or in excess of
300% of Executive’s "base
amount" as defined in Section
280G(b)(3)(A) and the regulations thereunder, Executive waives the right to
"parachute payments" sufficient to reduce the present value of all such payments
below 300% of the "base amount." If any reduction in payments is
required pursuant to this Section, payments under this Agreement and all other
amounts payable to Executive upon or by reason of his/her termination shall be
reduced proportionately. If it is established pursuant to a final
determination of a court of competent jurisdiction or an Internal Revenue
service proceeding that, notwithstanding the good faith of Executive, Commerce
and Commerce’s independent certified public accountant in applying
the terms of this Section 7, the aggregate "parachute payments" paid to or for
Executive’s benefit are in an amount that would result in any portion of such
"parachute payments" not being deductible by Commerce or any affiliate by reason
of Section 280G of the Code, then Executive shall have an obligation to pay
Commerce upon demand an amount equal to the sum of (i) the excess of the
aggregate "parachute payments" paid to or for Executive’s benefit without any
portion of such "parachute payments" not being deductible by reason of Section
280G of the Code and (ii) interest on the amount set forth in clause (i) above
at the applicable federal rate (as defined in Section 1274(d) of the Code) from
the date of Executive’s receipt of such excess until the date of such
payment.
7.4 In
addition to the other compensation set forth in either Section 7.1 or 7.2 above,
upon termination of Executive’s employment as set forth in either Section 7.1 or
7.2 above, Executive shall be entitled, following the date of termination, to
participate in all Commerce medical, disability, hospitalization and life
insurance benefits for a period of one (1) year except that should Executive
accept subsequent employment during the one (1) year period following the date
of termination, continuation of any medical, disability, hospitalization or life
insurance benefit will cease to the extent that any such benefit is provided
through or by Executive’s subsequent employer.
7.5
Except as provided in this Section 7, nothing in this Agreement shall affect or
have any bearing on Executive’s entitlement to other benefits under any plan or
program providing benefits by reason of termination of employment, provided that
such entitlement would be in compliance with or exempt from Section 409A of the
Code.
7.6
Executive shall have the right to terminate his/her employment (i) within a
period of one hundred eighty (180) days following a “Change in Control” and (ii)
for "Good Reason" (as both terms are defined in Section 8 below). In
the event of his/her termination for
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Good
Reason, Executive must give notice to Commerce of the existence of the
condition(s) described in Section 8.2 within ninety (90) days of the initial
existence of the condition(s). Upon such notice, Commerce shall have
a period of thirty (30) days during which it may remedy the condition(s) (the
“Cure Period”). If Commerce fails to cure the condition(s)
constituting the Good Reason during the Cure Period, Executive’s separation from
service must occur within a period of ninety (90) days following the expiration
of the Cure Period in order for the termination to constitute a termination
pursuant to a Good Reason for purposes of this Agreement. If
Executive’s termination occurs after the expiration of ninety (90)days following
the Cure Period, such termination shall not be treated as a termination pursuant
to a Good Reason and Executive shall have no right to the payments and benefits
described in this Agreement.
7.7
Anything in this Agreement to the contrary notwithstanding, Executive shall not
be required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment.
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8.
Change in
Control and Good Reason.
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8.1 For
this Agreement, a “Change in
Control” of
Commerce means (a) any person or group acquires ownership of stock of
Commerce that, together with stock already held by such person or group,
constitutes more than 50 percent of the total fair market value or total voting
power of the stock of Commerce; (b) any person or group acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or group) ownership of stock possessing 30 percent or
more of the total voting power of the stock of Commerce; (c) a majority of
members of Commerce’s Board of Directors is replaced during any 24-month period
by directors whose appointment or election is not approved by a majority of the
members of Commerce’s Board before the date of the appointment or election of
any of the “replacement” directors; or (d) ) any person or group acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or group) of assets from Commerce that have a total
gross fair market value equal to or more than 40 percent of the total gross fair
market value of all of the assets of Commerce immediately before such
acquisition(s). For purposes of this Section, “group” is defined or
determined pursuant to Treasury Regulation §1.409A-3 paragraph
(i)(5)(v)(B).
8.2 For
this Agreement, "Good Reason" means (i) that without Executive’s
consent: (a) the nature and scope of Executive’s authority,
responsibilities or duties with Commerce or COBH or a surviving or acquiring
Person are materially reduced to a level below that which he enjoys on the date
hereof, (b) the duties and responsibilities assigned to Executive are materially
inconsistent with that which he has on the date of this Agreement, resulting in
a diminution of Executive’s authority, duties or responsibilities, (c) the
salary and fringe benefits which Commerce provides on the date of this Agreement
or at any time hereafter are materially reduced, (d) Executive’s position or
title with Commerce or COBH or the surviving or acquiring Person is reduced from
his/her current position or title with Commerce and/or COBH, resulting in a
material reduction in Executive’s authority, duties or responsibilities or (e)
there’s a material change in the geographic location at which Executive must
perform the services, provided that such material change results in any
relocation or transfer of Commerce's principal executive offices to
a
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location
more than fifty (50) miles from Executive’s principal residence on the date
hereof without Executive consent; (ii) Commerce or COBH materially breaches this
Agreement; or (iii) a material breach of this Agreement by any successor to
Commerce or COBH by such successor’s failure or refusal to assume all duties and
obligations of Commerce and COBH under this Agreement.
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9.
Confidential
Information and
Non-Competition.
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9.1
Executive covenants and agrees that he will not, during the Term of his/her
employment or at any subsequent time, except with the express prior written
consent of the Board, directly or indirectly disclose, communicate or divulge to
any Person, or use for the benefit of any Person, any knowledge or information
with respect to the conduct or details of Commerce's business which he, acting
reasonably, believes or should believe to be of a confidential nature and the
disclosure of which to not be in Commerce's interest.
9.2
Executive covenants and agrees that he will not, during the Term of his/her
employment, except with the express prior written consent of the Board, directly
or indirectly, whether as employee, owner, partner, consultant, agent, director,
officer, shareholder or in any other capacity, engage in or assist any Person to
engage in any act or action which he, acting reasonably, believes or should
believe would be harmful or inimical to the interests of Commerce.
9.3 (A)
Executive covenants and agrees that he will not, except with the express prior
written consent of the Board, in any capacity (including, but not limited to,
owner, partner, shareholder, consultant, agent, employee, officer, director or
otherwise), directly or indirectly, for his/her own account or for the benefit
of any Person, establish, engage or participate in or otherwise be connected
with any commercial banking business which conducts business in any geographic
area in which Commerce and its subsidiaries is then conducting such business
except that the foregoing shall not prohibit Executive from owning as a
shareholder less than 5% of the outstanding voting stock of an issuer whose
stock is publicly traded.
(B) The
provisions of Section 9.3(A) shall be applicable commencing on the date of this
Agreement and ending on one of the following periods, as
applicable:
(i) If
this Agreement is terminated by Commerce in accordance with the provisions of
Section 1.2 of this Agreement, the effective date of termination of this
Agreement;
(ii)
If Executive voluntarily terminates his/her employment one year following the
effective date of termination of this Agreement; or
(iii) If
this Agreement is terminated in accordance with the provisions of either Section
7.1 or 7.2 of this Agreement, six (6) months following the effective date of
termination of this Agreement; provided however, that if Commerce is prohibited
by any governmental agency regulating the affairs of Commerce or COBH from
paying Executive, in whole or in part, the severance pay described in Paragraphs
7.1(ii) or 7.2( ii), then the provisions of Section 9.3(A) shall end on the
effective date of termination of this Agreement.
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9.4 The
parties agree that any breach by Executive of any of the covenants or agreements
contained in this Section 9 will result in irreparable injury to Commerce for
which money damages could not adequately compensate Commerce and therefore, in
the event of any such breach, Commerce shall be entitled (in addition to any
other rights and remedies which it may have at law or in equity) to have an
injunction issued by any competent court enjoining and restraining Executive
and/or any other Person involved from continuing such breach. The existence of
any claim or cause of action which Executive may have against Commerce or any
other Person (other than a claim for Commerce's breach of this Agreement for
failure to make payments hereunder) shall not constitute a defense or bar to the
enforcement of such covenants. In the event of any alleged breach by Executive
of any of the covenants or agreements contained in this Section 9, Commerce
shall continue any and all of the payments due Executive under this Agreement
until such time as a Court shall enter a final and unappealable order finding
such a breach; provided, that the foregoing shall not preclude a Court from
ordering Executive repay such payments made to him/her for the period after the
breach is determined to have occurred or from ordering that payments hereunder
be permanently terminated in the event of a material and willful
breach.
9.5 If
any portion of the covenants or agreements contained in this Section 9, or the
application hereof, is construed to be invalid or unenforceable, the other
portions of such covenant(s) or agreement(s) or the application thereof shall
not be affected and shall be given full force and effect without regard to the
invalid or unenforceable portions to the fullest extent possible. If any
covenant or agreement in this Section 9 is held to be unenforceable because of
the area covered, the duration thereof, or the scope thereof, then the court
making such determination shall have the power to reduce the area and/or
duration and/or limit the scope thereof, and the covenant or agreement shall
then be enforceable in its reduced form.
9.6 For
purposes of this Section 9, the term "Commerce" shall include Commerce, any
successor of Commerce under Section 10 hereof, and all present and future direct
and indirect subsidiaries and affiliates of Commerce including, but not limited
to, COBH.
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10.
Successors and
Assigns.
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This
Agreement shall inure to the benefit of and be binding upon any corporate or
other successor of Commerce which will acquire, directly or indirectly, by
merger, consolidation, purchase, or otherwise, all or substantially all of the
assets of Commerce, and shall otherwise inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns. Upon the death of Executive any payments or benefits
otherwise due Executive hereunder shall be paid to or be for the benefit of
Executive’s legal representatives. Nothing in the Agreement shall preclude
Commerce from consolidating or merging into or with or transferring all or
substantially all of its assets to another Person. In that event, such other
Person shall assume this Agreement and all obligations of Commerce in this
Agreement. Upon such a consolidation, merger, or transfer of assets and
assumption, the term "Commerce," as used in this Agreement, shall mean such
other Person and this Agreement shall continue in full force and
effect.
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11.
Assignment.
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Neither
this Agreement nor any rights to receive payments hereunder shall be voluntarily
or involuntarily assigned, transferred, alienated, encumbered or disposed of, in
whole or in part, without Commerce's prior written consent and approval, and
shall not be subject to anticipation, levy, execution, garnishment, attachment
by, or interference or control of, any creditor.
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12.
Source of
Payment and Timing.
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12.1 All
payments provided under this Agreement shall be paid in cash from the general
funds of Commerce, no special or separate fund shall be required to be
established and Executive shall have no right, title or interest whatsoever in
or to any investment which Commerce may make to aid Commerce in meeting its
obligations hereunder except to the extent that Commerce shall, in its sole and
absolute discretion, choose to designate any of its rights it may have under one
or more life insurance policies it may obtain to cover any of its obligations
under this Agreement. Nothing contained in this Agreement, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind or fiduciary relationship between Commerce and Executive or any other
Person.
12.2 All
payments due under Sections 5.2, 6.3, 7.1 or 7.2 above shall be made not later
than the thirtieth (30th) day
following the date of termination of employment. It is provided,
however, that, if, at the time of Executive’s termination of employment with
Commerce or COBH, Commerce has stock which is publicly traded on an established
securities market and Executive is a “specified employee” (as defined in Section
409A of the Code) and it is necessary to postpone the commencement of any
payments or benefits otherwise payable pursuant to this Agreement as a result of
such termination of employment to prevent any accelerated or additional tax
under Section 409A of the Code, then Commerce shall postpone the commencement of
the payment of any such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to Executive) that are not
otherwise paid within the short-term deferral exception under Section 409A of
the Code and are in excess of the lesser of two (2) times (i) Executive’s
then-annual compensation or (ii) the limit on compensation then set forth in
Section 401(a)(17) of the Code, until the first payroll date that occurs after
the date that is six months following Executive’s “separation of service” with
Commerce or COBH (within the meaning of such term under Section 409A of the
Code). The accumulated postponed amount shall be paid in a lump sum
payment within ten days after the end of the six-month period. If
Executive dies during the postponement period prior to the payment of postponed
amount, the amounts postponed on account of Section 409A shall be paid to the
personal representative of Executive’s estate within 60 days after the date of
his/her death.
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13.
Interest.
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In the
event any benefits due to Executive are not paid when due hereunder, Executive
shall be entitled (in addition to his/her other rights and remedies) to interest
on the past due amounts at a rate equal to two percentage points above the prime
rate charged from time to time by COBH, such interest to commence on the date a
benefit was due hereunder.
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14.
Reimbursements
and In-Kind Benefits.
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14.1
Generally.
All
reimbursements and in-kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of Section 409A of the Code,
including, where applicable, the requirement that:
(i) any reimbursement shall be for
expenses incurred during Executive’s lifetime (or during a shorter period of
time specified in this Agreement);
(ii) the amount of expenses eligible
for reimbursement, or in-kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year;
(iii) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is
incurred;
(iv) the right to in-kind benefits
shall not extend beyond the last day of Executive’s second taxable year
following his/her termination of employment; and
(v) the right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another
benefit.
14.2
Reimbursement of
Enforcement Expenses.
If
Commerce fails to pay or provide Executive any of the amounts due him/her under
this Agreement or fails to provide Executive with any of the other benefits due
him/her under this Agreement, and provided Commerce does not cure any such
failure within thirty (30) days after having received written notice from
Executive of such failure, Executive shall be entitled to full reimbursement
from Commerce for all costs and expenses (including reasonable attorneys’ fees
and costs) incurred by Executive in enforcing his/her rights under this
Agreement.
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15.
Notices.
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All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid, to the following addresses or to such other address as either party may
designate by like notice:
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If to
Commerce, to:
Commerce
Bank/Harrisburg
0000
Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxxxx, President
If to
Executive:
Xxxx X.
Xxxx
000
Xxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
and to
such other or additional person or persons as either party shall have designated
to the other party in writing by like notice.
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16.
Amendment,
Waiver and Termination.
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16.1
General.
No
amendment, waiver or termination of any of the provisions of this Agreement
shall be effective unless in writing and signed by the party against whom it is
sought to be enforced. Any written amendment, waiver or termination hereof
executed by Commerce and Executive (or his/her legal representatives) shall be
binding upon them and upon all other Persons, without the necessity of securing
the consent of any other Person including, but not limited to, Executive’s
spouse, and no Person shall be deemed to be a third party beneficiary under this
Agreement except to the extent provided under Section 12.1 above.
16.2
Compliance with
Requirements of Troubled Assets Relief Program (TARP).
Notwithstanding
Section 16.1, in the event Commerce is a participant in TARP, during such time
as the U. S. Treasury Department (“Treasury”) holds an equity or debt position
in Commerce, Executive agrees to modify the terms of this Agreement to comply
with any executive compensation requirements of such Program, including (i) an
agreement to relinquish to Commerce any bonus or incentive compensation
paid that is based on statements of earnings, gains, or other criteria that are
later proven to be materially inaccurate; and (ii) a reduction, if necessary, in
any compensation so as not to receive any “golden parachute” payments (based on
the applicable Code provision). Executive also agrees to waive any
claims he may have against Commerce or Treasury as a result of any amendments to
this Agreement required by TARP.
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17.
General
Provisions.
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17.1 This
Agreement constitutes the entire agreement between the parties concerning its
subject matter, and supersedes and replaces all prior agreements between the
parties.
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17.2 COBH
or any other subsidiary of Commerce may make payments to Executive thereunder in
lieu of payments to be made by Commerce, and to the extent such payments are so
made, Commerce shall be released of its obligations to make such
payments.
17.3 The
benefits provided under this Agreement shall be in addition to and shall not
affect the proceeds payable to Executive’s beneficiaries under group life
insurance policies which Commerce may be carrying on Executive’s
Life.
17.4
"Person" as used in this Agreement means a natural person, joint venture,
corporation, sale proprietorship, trust, estate, partnership, cooperative,
association, non-profit organization or any other legal entity.
17.5 This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same Agreement.
l7.6
Except as otherwise expressly stated in this Agreement, no failure on the part
of any party to this Agreement to exercise and no delay in exercising any right,
power or remedy under this Agreement shall operate as a waiver; nor shall any
single or partial exercise of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.
17.7
Commerce and Executive consent to the exclusive jurisdiction of the courts of
the Commonwealth of Pennsylvania and the United States District Court for the
Middle District of Pennsylvania in any and all actions arising hereunder and
irrevocably consent to service of process as set forth in Section 15
above.
17.8 The
headings of the sections of this Agreement have been inserted for convenience of
reference only and shall in no way restrict or modify any of the terms or
provisions of this Agreement.
17.9 This
Agreement shall be governed and construed and the legal relationships of the
parties determined in accordance with the laws of the Commonwealth of
Pennsylvania applicable to contracts executed and to be performed solely in the
Commonwealth of Pennsylvania.
17.10
This Agreement is contingent upon any required approval of the Federal Deposit
Insurance Corporation.
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17.11
This Agreement is intended to comply with the requirements of Section 409A of
the Code or an exemption from Section 409A, and shall in all respects be
administered in accordance with Section 409A. Executive’s termination of
employment under this Agreement shall be interpreted in a manner consistent with
the separation from service rules under Section 409A. For purposes of
Section 409A of the Code, each payment made under this Agreement shall be
treated as a separate payment and the right to a series of payments under this
Agreement shall be treated as a right to a series of separate
payments. In no event shall Executive, directly or indirectly,
designate the calendar year of a payment.
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PENNSYLVANIA
COMMERCE BANCORP, INC.
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/s/ Xxxxxx X.
Xxxx
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By:
/s/ Xxxx X.
Xxxxxxxxxx
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Attest
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Name:
Xxxx X. Xxxxxxxxxx
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Title:
Chairman/President/CEO
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COMMERCE
BANK/HARRISBURG
|
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/s/
Xxxxxx X. Xxxx
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By:
/s/ Xxxx X.
Xxxxxxxxxx
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Attest
|
Name:
Xxxx X. Xxxxxxxxxx
|
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Title:
Chairman/President/CEO
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EXECUTIVE:
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| /s/ Xxxxxx X. Xxxx |
/s/
Xxxx X. Xxxx
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| Witness | Xxxx X. Xxxx |
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EmploymentAgreement
