EXHIBIT 10.5
AMENDMENT NO. 4 TO EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment No. 4 to an Executive Employment Agreement (the
"Agreement"), dated June 28, 1991, among Penncore Financial Services Corporation
(the "Corporation"), Commonwealth State Bank (the "Bank"), and H. Xxxx Xxxxx
(the "Executive") is made this 31st day of December, 1996.
WHEREAS, the parties desire to amend the Agreement relating to the Term of
Employment of the Executive and the Annual Direct Salary paid to the Executive;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
intending to be legally bound hereby, the parties agree as follows:
Subparagraphs 1 and 4(a) are hereby amended to read as follows:
1. TERM OF EMPLOYMENT. The Bank employs the Executive and the
Executive accepts employment with the Bank for a two year
period beginning January 1, 1997. The term of this Agreement
will automatically renew each anniversary date unless
written notice is provided as stipulated under Section 10,
Termination, of the Agreement. (For example, the initial
contract period is January 1, 1997, through December 31,
1998. On January 1, 1998, the term of this Agreement extends
to December 31, 1999, unless the parties provide written
notice of their intent not to renew the Agreement term, as
stipulated in Section 10 of the Agreement.)
4(a). ANNUAL DIRECT SALARY. As compensation for services rendered
the Bank under this Agreement, the Executive shall be
entitled to receive from the Bank an annual direct salary of
not less than $140,000 per year, (the "Annual Direct
Salary") payable in substantially equal monthly installments
(or such other more frequent intervals as may be determined
by the Board of Directors of the Bank as payroll policy for
senior executive officers) prorated for any partial
employment period. The Annual Direct Salary shall be
reviewed by the Board of Directors on each anniversary of
this Agreement and shall be adjusted in accordance with the
prevailing market value of the position and the current pay
increase practices of the Bank. In no event shall the Annual
Direct Salary be decreased.
These Amendments supercede any and all Amendments, either oral or in
writing, between the parties with respect to Subparagraphs 1 and 4(a) of the
Agreement. This Amendment and the Agreement contain all of the covenants and
agreements between the parties with respect to the employment of the Executive
by the Corporation and the Bank.
All of the remaining recitals and paragraphs of the Agreement are hereby
reaffirmed, reratified, and reapproved by the parties hereto.
IN WITNESS WHEREOF, the parties have hereunto executed this Amendment No. 4
to the Agreement on the date aforesaid.
ATTEST: PENNCORE FINANCIAL SERVICES
CORPORATION
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx Xxxx X. Xxxxxxx, Xx.
Assistant Secretary/Treasurer Chairman of the Board
ATTEST: COMMONWEALTH STATE BANK
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx, Xxxx X. Xxxxxxx, Xx.
Vice President and Chairman of the Board
Assistant Secretary/Treasurer
WITNESS:
/s/ Xxxxxx X. Xxxx /s/ H. Xxxx Xxxxx
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx H. Xxxx Xxxxx
AMENDMENT NO. 3 TO EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment No. 3 to an Executive Employment Agreement (the
"Agreement"), dated June 28, 1991, among Penncore Financial Services Corporation
(the "Corporation"), Commonwealth State Bank (the "Bank"), and H. Xxxx Xxxxx
(the "Executive") is made this 5th day of April, 1996.
WHEREAS, the parties desire to amend the Agreement relating to the Term of
Employment of the Executive and the Annual Direct Salary paid to the Executive;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
intending to be legally bound hereby, the parties agree as follows:
Subparagraphs 1 and 4(a) are hereby amended to read as follows:
1. TERM OF EMPLOYMENT. The Bank employs the Executive and the
Executive accepts employment with the Bank for a two year
period beginning January 1, 1996. The term of this Agreement
will automatically renew each anniversary date unless
written notice is provided as stipulated under Section 10,
Termination, of the Agreement. (For example, the initial
contract period is January 1, 1996, through December 31,
1997. On January 1, 1997, the term of this Agreement extends
to December 31, 1998, unless the parties provide written
notice of their intent not to renew the Agreement term, as
stipulated in Section 10 of the Agreement.)
4(a). ANNUAL DIRECT SALARY. As compensation for services rendered,
the Bank under this Agreement, the Executive shall be
entitled to receive from the Bank an annual direct salary of
not less than $125,000 per year, (the "Annual Direct
Salary") payable in substantially equal monthly installments
(or such other more frequent intervals as may be determined
by the Board of Directors of the Bank as payroll policy for
senior executive officers) prorated for any partial
employment period. The Annual Direct Salary shall be
reviewed by the Board of Directors on each anniversary of
this Agreement and shall be adjusted in accordance with the
prevailing market value of the position and the current pay
increase practice of the Bank. In no event shall the Annual
Direct Salary be decreased.
These Amendments supercede any and all Amendments, either oral or in
writing, between the parties with respect to Subparagraphs 1 and 4(a) of the
Agreement. This Amendment and the Agreement contain all of the covenants and
agreements between the parties with respect to the employment of the Executive
by the Corporation and the Bank.
All of the remaining recitals and paragraphs of the Agreement are hereby
reaffirmed, reratified, and reapproved by the parties hereto.
IN WITNESS WHEREOF, the parties have hereunto executed this Amendment No. 3
to the Agreement on the date aforesaid.
ATTEST: PENNCORE FINANCIAL SERVICES
CORPORATION
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx Xxxx X. Xxxxxxx, Xx.
Assistant Secretary/Treasurer Chairman of the Board
ATTEST: COMMONWEALTH STATE BANK
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx, Xxxx X. Xxxxxxx, Xx.
Vice President and Chairman of the Board
Assistant Secretary/Treasurer
WITNESS:
/s/ Xxxxxx X. Xxxx /s/ H. Xxxx Xxxxx
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx H. Xxxx Xxxxx
AMENDMENT NO. 2 TO EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment No. 2 to an Executive Employment Agreement (the
"Agreement"), dated June 28, 1991, among Penncore Financial Services Corporation
(the "Corporation"), Commonwealth State Bank (the "Bank"), and H. Xxxx Xxxxx
(the "Executive") is made this 15th day of March, 1994.
WHEREAS, the parties desire to amend the Agreement relating to the Term of
Employment of the Executive and the Annual Direct Salary paid to the Executive;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
intending to be legally bound hereby, the parties agree as follows:
Subparagraphs 1 and 4(a) are hereby amended to read as follows:
1. TERM OF EMPLOYMENT. The Bank employs the Executive and the
Executive accepts employment with the Bank for a two year
period beginning January 1, 1994. The term of this Agreement
will automatically renew each anniversary date unless
written notice is provided as stipulated under Section 10,
Termination, of the Agreement. (For example, the initial
contract period is January 1, 1994, through December 31,
1995. On January 1, 1995, the term of this Agreement extends
to December 31, 1996, unless the parties provide written
notice of their intent not to renew the Agreement term, as
stipulated in Section 10 of the Agreement.)
4(a). ANNUAL DIRECT SALARY. As compensation for services rendered,
the Bank under this Agreement, the Executive shall be
entitled to receive from the Bank an annual direct salary of
not less than $110,000 per year, (the "Annual Direct
Salary") payable in substantially equal monthly installments
(or such other more frequent intervals as may be determined
by the Board of Directors of the Bank as payroll policy for
senior executive officers) prorated for any partial
employment period. The Annual Direct Salary shall be
reviewed by the Board of Directors on each anniversary of
this Agreement and shall be adjusted in accordance with the
prevailing market value of the position and the current pay
increase practice of the Bank. In no event shall the Annual
Direct Salary be decreased.
These Amendments supercede any and all Amendments, either oral or in
writing, between the parties with respect to Subparagraphs 1 and 4(a) of the
Agreement. This Amendment and the Agreement contain all of the covenants and
agreements between the parties with respect to the employment of the Executive
by the Corporation and the Bank.
All of the remaining recitals and paragraphs of the Agreement are hereby
reaffirmed, reratified, and reapproved by the parties hereto.
IN WITNESS WHEREOF, the parties have hereunto executed this Amendment No. 2
to the Agreement on the date aforesaid.
ATTEST: PENNCORE FINANCIAL SERVICES
CORPORATION
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx Xxxx X. Xxxxxxx, Xx.
Assistant Secretary/Treasurer Chairman of the Board
ATTEST: COMMONWEALTH STATE BANK
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx, Xxxx X. Xxxxxxx, Xx.
Vice President and Chairman of the Board
Assistant Secretary/Treasurer
WITNESS:
/s/ Xxxxxx X. Xxxx /s/ H. Xxxx Xxxxx
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx H. Xxxx Xxxxx
AMENDMENT NO. 1 TO EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment No. 1 to an Executive Employment Agreement (the
"Agreement"), dated June 28, 1991, among Penncore Financial Services Corporation
(the "Corporation"), Commonwealth State Bank (the "Bank"), and H. Xxxx Xxxxx
(the "Executive") is made this 29th day of June, 1993.
WHEREAS, the parties desire to amend the Agreement relating to the Term of
Employment of the Executive and the Annual Direct Salary paid to the Executive;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
intending to be legally bound hereby, the parties agree as follows:
Subparagraphs 1 and 4(a) are hereby amended to read as follows:
1. TERM OF EMPLOYMENT. The Bank employs the Executive and the
Executive accepts employment with the Bank for a two year
period beginning January 1, 1993. The term of this Agreement
will automatically renew each anniversary date unless
written notice is provided as stipulated under Section 10,
Termination, of the Agreement. (For example, the initial
contract period is January 1, 1993, through December 31,
1994. On January 1, 1994, the term of this Agreement extends
to December 31, 1996, unless the parties provide written
notice of their intent not to renew the Agreement term, as
stipulated in Section 10 of the Agreement.)
4(a). ANNUAL DIRECT SALARY. As compensation for services rendered,
the Bank under this Agreement, the Executive shall be
entitled to receive from the Bank an annual direct salary of
not less than $110,000 per year, (the "Annual Direct
Salary") payable in substantially equal monthly installments
(or such other more frequent intervals as may be determined
by the Board of Directors of the Bank as payroll policy for
senior executive officers) prorated for any partial
employment period. The Annual Direct Salary shall be
reviewed by the Board of Directors on each anniversary of
this Agreement and shall be adjusted in accordance with the
prevailing market value of the position and the current pay
increase practice of the Bank. In no event shall the Annual
Direct Salary be decreased.
IN WITNESS WHEREOF, the parties have hereunto executed this Amendment No. 1
to the Agreement on the date and date aforesaid.
ATTEST: PENNCORE FINANCIAL SERVICES
CORPORATION
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx Xxxx X. Xxxxxxx, Xx.
Assistant Secretary/Treasurer Chairman of the Board
ATTEST: COMMONWEALTH STATE BANK
/s/ Xxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx, V.P., Xxxx X. Xxxxxxx, Xx.
Assistant Secretary/Treasurer Chairman of the Board
WITNESS:
/s/ Xxxxxx X. Xxxx /s/ H. Xxxx Xxxxx
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx H. Xxxx Xxxxx
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made on the 28th day of June, 1991 between PENNCORE
FINANCIAL SERVICES CORPORATION (the "Corporation"), a Pennsylvania corporation
with its principal office at Friends Lane & Rt. 332, Newtown, PA, COMMONWEALTH
STATE BANK (the "Bank"), a Pennsylvania state-chartered banking institution with
its principal office at Friends Lane & Rt. 332, Newtown, PA and H. XXXX XXXXX
(the "Executive"), residing at 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx.
WHEREAS, the Bank is a wholly-owned subsidiary of the Corporation; and
WHEREAS, the Bank desires to employ the Executive as its President and
Chief Executive Officer under the terms and conditions set forth herein; and
WHEREAS, it is acknowledged that since the Bank is a wholly-owned
subsidiary of the Corporation, the Corporation receives a benefit from the
employment of the Executive by the Bank; and
WHEREAS, the Corporation is willing to assume the obligations of the Bank
if the Bank is for any reason unable to perform its obligations hereunder, and
WHEREAS, the Executive desires to serve the Bank in an executive capacity
under the terms and conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound hereby, the parties agree as
follows:
1. TERM OF EMPLOYMENT. The Bank employs the Executive and the Executive
accepts employment with the Bank for a two year period beginning January 1,
1991. The term of this Agreement will automatically renew each anniversary date
unless written notice is provided as stipulated under Section 1O, Termination.
(For example, the
1
initial contract period is January 1, 1991 through December 31, 1993. On January
1, 1992, the term of this Agreement extends to December 31, 1994, unless the
parties provide written notice of their intent not to renew the agreement term,
as stipulated in Section 10.)
2. POSITION AND DUTIES. The Executive shall serve as the Chief Executive
Officer, president of the Bank and Corporation and a member of the Board of
Directors of Bank and Corporation, reporting only to the Board of Directors of
the Bank and its Chairman, and shall have supervision and control over, and
responsibility for, the general management and operation of the Bank, and shall
have such other powers and duties as may from time to time be prescribed by the
Board of Directors of the Bank, provided that such duties are consistent with
the Executive's position as the chief executive officer in charge of the general
management of the Bank.
3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote substantially
all his working time, ability and attention to the business of the Bank and/or
the Corporation during the term of this Agreement. The Executive shall notify
the Board of Directors of the Bank in writing before the Executive engages in
any other business or commercial activities, duties or pursuits, including, but
not limited to, directorships of other companies. Under no circumstances may the
Executive engage in any business or commercial activities, duties or pursuits
which compete with the business or commercial activities of the Bank or the
Corporation, nor may the Executive serve as a director or officer or in any
other capacity in a company which competes with the Corporation and/or the Bank.
2
4. COMPENSATION.
(a) ANNUAL DIRECT SALARY. As compensation for services rendered the Bank
under this Agreement, the Executive shall be entitled to receive from the Bank
an annual direct salary of not less than $95,000 per year, (the "Annual Direct
Salary") payable in substantially equal monthly installments (or such other more
frequent intervals as may be determined by the Board of Directors of the Bank as
payroll policy for senior executive officers) prorated for any partial
employment period. The Annual Direct Salary shall be reviewed by the Board of
Directors on each anniversary of this Agreement and shall be adjusted in
accordance with the prevailing market value of the position and the current pay
increase practice of the Bank. In no event shall the Annual Direct Salary be
decreased.
(b) INCENTIVE COMPENSATION. The Executive shall prepare a Business Plan
establishing the financial and business goals of the Bank prior to the start of
each fiscal year. The Business Plan prepared by the Executive shall be reviewed
promptly by the Board of Directors, which may in its sole discretion alter or
modify the Business Plan prior to adoption. Upon adoption of the Business Plan,
the Board of Directors shall also establish an Incentive Compensation Plan for
the Executive. The Incentive Compensation Plan shall provide an incentive pay
opportunity consistent with the practices of similar organizations in rewarding
their senior executives. The incentive award will be paid to the Executive
within ninety (90) days following the end of the fiscal year if the financial
and business goals of the Bank are met for that year. As part of the Incentive
Compensation Plan, the Board of Directors in its sole discretion may also
provide for payment of less than the full yearly bonus in the event some but not
all of the financial and business goals of the Bank are met for the year in
question.
3
(c) ADDITIONAL BONUS. The Executive shall also be entitled to an additional
bonus amount sufficient on an after-tax basis to pay the premium on his
supplemental Long-term Disability insurance policy. This bonus amount will be
payable on each anniversary of this agreement on which the Executive is employed
by the Bank.
(d) DIRECTOR'S FEES. The Executive, if appointed as a Director of the
Corporation and/or the Bank, will be eligible to receive fees for those services
equal in amount to fees received by outside Directors of the organizations.
5. FRINGE BENEFITS, VACATION, EXPENSES, AND PERQUISITES.
(a) EMPLOYEE BENEFIT PLANS. The Executive shall be entitled to participate
in or receive benefits under all Bank and/or Corporate employment benefit plans
(to the extent that the employment benefit plans of the Bank and Corporation are
not duplicative), including but not limited to any profit-sharing plan, savings
plan, equity participation plan, supplemental retirement income, medical or
health-and-accident plan or arrangement made available by the Bank and/or the
Corporation to its executives and key management employees, subject to and on a
basis consistent with terms, conditions and overall administration of such plans
and arrangements. The Executive shall also be entitled to the following
benefits, at minimum:
(i) Retirement Income Plan: The Executive shall be entitled to
participate in the group retirement income plan of the Bank and shall become
vested in such plan according to the schedule provided in the plan document.
(ii) Life Insurance: In addition to standard group life insurance
provisions, the Bank shall provide and maintain life insurance for the
Executive, if he qualifies therefore on a standard underwriting basis, which
life insurance shall at all times be
4
maintained at an amount equal to three times the Executive's Annual Direct
Salary to a maximum of $350,000.
(iii) Disability Insurance: In addition to standard group benefit
provisions, the Bank shall make available a disability insurance policy for
purchase by the Executive, provided the Executive qualifies as a medically
acceptable risk to the issuing company on a standard underwriting basis, which
shall provide that in the event the Executive is unable to perform his duties
hereunder as a result of incapacity due to physical or mental illness, he shall
be entitled to receive benefits from all sources (Social Security, group LTD and
supplemental LTD) equal to 75% of his annual salary until he reaches the age of
65 or dies, whichever occurs first. The Bank shall continue to pay to the
Executive his Annual Direct Salary during any applicable "elimination (waiting)
period," but not to exceed ninety (90) days, under the disability insurance plan
purchased by the Executive.
(b) The Executive shall be entitled to the number of paid vacation days in
each calendar year determined by the Bank from time to time for its senior
executive officers, but not less than four (4) weeks in any calendar year
(prorated in any calendar year during which the Executive is employed hereunder
for less than the entire such year in accordance with the number of days in such
calendar year during which he is so employed). The Executive shall also be
entitled to all paid holidays given by the Bank to its senior executive
officers.
(c) During the term of his employment hereunder, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
him (in accordance with the policies and procedures established by the Board of
Directors of the Bank for its
5
senior executive officers) in performing services hereunder, provided that the
Executive properly accounts therefore in accordance with Bank policy.
(d) During the term of employment hereunder, the Executive shall be
entitled to the use of a Bank purchased or leased automobile of the following
make and model, or its equal: Buick LeSabre. The Executive shall also be
entitled to reimbursement for all operating expenses of the automobile,
including but not limited to oil, gasoline, maintenance, repairs and insurance.
Additionally, the Executive shall be entitled to receive such other perquisites
and fringe benefits as the Board of Directors of the Bank deems appropriate in
its sole direction.
(e) Nothing paid to the Executive under any benefit plan or arrangement
shall be deemed to be in lieu of compensation to the Executive hereunder.
6. OFFICES. The executive agrees to serve as President and Chief Executive
Officer of the Corporation and, if elected or appointed thereto, in one or more
offices or as a director of the Corporation and/or the Bank, and/or in one or
more offices or as a director of any of the Corporation's or the Bank's
subsidiaries, provided, however, the Executive shall not be required to serve in
such additional offices or as a director of the Corporation, Bank or any
subsidiary if such service would expose him to adverse financial consequences.
7. INDEMNIFICATION. The Bank and Corporation shall indemnify the Executive,
to the fullest extent permitted by Pennsylvania law, with respect to any
threatened, pending or completed action, suit or proceeding, brought against him
by reason of the fact that he is or was a director, officer, employee or agent
of Bank or Corporation or is or was serving at the request of Corporation or
Bank as a director, officer, employee or agent of
6
another person or entity. To the fullest extent permitted by Pennsylvania law,
the Bank and Corporation shall in advance of final disposition pay any and all
expenses incurred by Executive in connection with any threatened, pending or
completed action, suit or proceeding with respect to which Executive may be
entitled to indemnification hereunder. Executive's right to indemnification
provided herein is not exclusive of any other rights of indemnification to which
Executive may be entitled under any bylaw, agreement, vote of shareholders or
otherwise, and shall continue beyond the term of this Agreement. The Bank and/or
the Corporation shall use its best efforts to obtain insurance coverage for the
Executive under an insurance policy covering officers and directors of the Bank
and/or the Corporation against lawsuits, arbitrations or other proceedings,
however, nothing herein shall be construed to require the Bank and/or the
Corporation to obtain such insurance if the Board of Directors of the Bank
and/or the Corporation determine that such coverage cannot be obtained at a
commercially reasonable price.
8. UNAUTHORIZED DISCLOSURE. During the period of his employment hereunder,
or at any later time, the Executive shall not, without the written consent of
the Board of Directors of the Bank and/or the Corporation or a person authorized
thereby, knowingly disclose to any person, other than an employee of the Bank or
the Corporation or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of his duties as
an executive of the Bank or the Corporation, any material confidential
information obtained by him while in the employ of the Bank or the Corporation
with respect to any of the Bank's or the Corporation's services, products,
improvements, formulas, designs or styles, processes, customers, methods of
distribution or any business practices the disclosure of which he knows will be
7
materially damaging to the Bank or the Corporation; provided, however, that
confidential information shall not include any information known generally to
the public (other than as a result of authorized disclosure by the Executive) or
any information of a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that conducted by the Bank
or the Corporation.
9. RESTRICTIVE COVENANT. The Executive covenants and agrees as follows: the
Executive shall not directly or indirectly, within the marketing area of the
Bank (defined as an area within ten miles of the main office), or any future
marketing area of the Bank (defined as an area within ten miles of any branch
office) begin during the Executive's employment under the terms of this
Agreement, enter into or engage generally in direct or indirect competition with
the Bank in the business of banking or any banking related business, either as
an individual on his own or as a partner or joint venturer, or as a director,
officer, shareholder, employee or agent for any person, for a period of one year
after the date of termination of his employment if (i) the Executive's
employment is terminated for Cause by the Bank pursuant to paragraph 10(c) of
this Agreement, or (ii) such termination is the result of a resignation by the
Executive for other than a "Good Reason" under paragraph 10(d) of this
Agreement. The existence of any immaterial claim or cause of action of the
Executive against the Bank, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Bank of this covenant.
The Executive agrees that any breach of the restrictions set forth in this
paragraph will result in irreparable injury to the Bank for which it shall have
no adequate remedy at law and the Bank shall be entitled to injunctive relief in
order to enforce the provisions hereof. In the event that this paragraph shall
be determined by any court of
8
competent jurisdiction to be unenforceable in part by reason of it being too
great a period of time or covering too great a geographical area, it shall be in
full force and effect as to that period of time or geographical area determined
to be reasonable by the court.
10. TERMINATION.
(a) The Executive's employment hereunder shall terminate upon his death.
(b) If the Executive becomes permanently disabled (as certified by the
Bank's group LTD carrier and the Executive's supplemental LTD carrier or in the
event these organizations cannot agree, they shall designate a licensed
physician whose decision shall be binding upon the parties) because of sickness,
physical or mental disability, or any other reason, and is unable to perform or
complete his duties under this Agreement for a period of 90 consecutive days (or
time equal to the elimination period), the Bank shall have the option to
terminate this Agreement by giving written notice of termination to the
Executive. Such termination shall be without prejudice to any right the
Executive has under the disability insurance program maintained by the Bank.
(c) The Bank may terminate the Executive's employment hereunder for Cause.
For the purposes of this agreement, the Bank shall have "Cause" to terminate the
Executive's employment hereunder upon (1) the willful failure by the Executive
to substantially perform his duties hereunder, other than any such failure
resulting from the Executive's incapacity due to physical or metal illness, or
(2) the willful engaging by the Executive in gross misconduct materially
injurious to the Bank, or (3) the willful violation by the Executive of the
provisions of paragraphs 3 or 8 hereof after notice from Bank or Corporation and
a failure to cure such violation within 30 days of said notice, or if said
violation cannot be cured within 30 days, within a reasonable time thereafter if
the Executive is diligently
9
attempting to cure the violation, or (4) the gross negligence of the Executive
in the performance of his duties or (5) receipt of a final written directive or
order of any governmental body or entity having jurisdiction over the Bank
requiring termination or removal of the Executive as Chief Executive Officer,
President or Director of the Bank.
(d) The Bank may choose not to renew the Executive's contract, without
cause or reason. Such termination will require the Bank to provide the Executive
with written notice of nonrenewal at least ninety (90) days prior to the
anniversary date of the Agreement.
(e) The Executive may terminate his employment hereunder (1) if his health
should become impaired to an extent that it makes continued performance of his
duties hereunder hazardous to his physical or mental health or his life, or (2)
for Good Reason. The term "Good Reason" shall mean (i) any assignment to the
Executive, without his consent, of any duties other than those contemplated by,
or any limitation of the powers of the Executive not contemplated by, Section 2
hereof, or (ii) any removal of the Executive from or any failure to reelect the
Executive to any of the positions indicated in Section 2 hereof, except in
connection with termination of the Executive's employment for Cause, or (iii) a
reduction of the Executive's rate of compensation as provided in Section 4
hereof, or (iv) failure of the Bank to comply with Section 5 hereof, (v) any
other material breach by Corporation or Bank of this Agreement or (vi) any
Change of Control (as defined herein).
11. PAYMENTS UPON TERMINATION.
(a) If the Executive's employment shall be terminated because of death,
disability or for Cause, the Bank shall pay the Executive his full Annual Direct
Salary through the date of termination at the rate in effect at the time of
termination and any other amounts
10
owing to Executive at the date of termination, and the Bank shall have no
further obligations to the Executive under this Agreement.
(b) If the Executive's employment is terminated by the Bank (other than
pursuant to paragraphs l0(a) or l0(b) or l0(c) hereof), or if the Executive
shall terminate his employment for Good Reason, excluding Change of Control,
then the Bank shall pay the Executive his full Annual Direct Salary from the
date of notice (termination), for a total of nine (9) months; provided, however,
the Executive shall make reasonable efforts to mitigate damages by seeking other
comparable employment. In such event, the Bank shall also maintain in full force
and effect, for the continued benefit of the Executive for the full salary
continuation period, all employee benefit plans and programs to which the
Executive was entitled prior to the date of termination if the Executive's
continued participation is possible under the general terms and provisions of
such plans and programs. In the event that the Executive's participation in any
such plan or program is barred, the Executive shall be entitled to receive an
amount equal to the annual contribution, payments, credits or allocations made
by the Bank to him, to his account or on his behalf under such plans and
programs from which his continued participation is barred except that if
Executive's participation in any health, medical, life insurance, or disability
plan or program is barred, Bank and Corporation shall obtain and pay for, on
Executive's behalf, individual insurance plans, policies or programs which
provide to Executive health, medical, life and disability insurance coverage
which is equivalent to the insurance coverage to which Executive was entitled
prior to the date of termination.
(c) If the Executive's employment is terminated by the Bank (other than
pursuant to paragraphs 10(a) or 10(b) or 10(c) hereof), or if the Executive
shall terminate this
11
employment for Good Reason within twelve (12) months following Change of Control
(as defined herein), then the Bank shall pay the Executive his full Annual
Direct Salary from the date of notice (termination) for the remaining term of
this agreement or eighteen (18) months, whichever is longer. The Bank will also
maintain benefit coverages for the Executive during this time period as
specified in paragraph 11(b) above.
(d) In the event of termination or nonrenewal of Executive's employment
other than for Cause, Executive shall have the right to sell to the Bank and the
Corporation, and upon exercise of such right the Bank and Corporation shall be
required to purchase, all of his shares of Bank stock or Corporation stock which
Executive desires to sell (the "Put Stock") for their Fair Market Value (as
determined below). It shall be within Bank's and Corporation's discretion as to
which of them shall purchase the Put Stock. Executive may exercise his right to
sell the Put Stock by delivering written notice of exercise to Bank and
Corporation, which exercise may be conditioned upon the price to be paid for the
Put Stock.
(e) The "Fair Market Value" of the Put Stock shall be determined by two
appraisers, one of whom shall be appointed by the Corporation or the Bank, and
one of whom shall be appointed by the Executive. In the event the two appraisers
cannot agree upon the Fair Market Value, they shall select a third appraiser to
act with them, and a decision of the majority of the appraisers shall be final
and binding. Each party shall bear the expense of the appraiser it chooses, and
if it becomes necessary to employ a third appraiser, that expense shall be borne
equally by the parties. All appraisers shall be independent and shall be
experienced in appraising banks. In determining the fair market value, the
appraisers shall not consider any legal restrictions on sale of the Put Stock,
but
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instead shall value the Put Stock as though it were freely traded in a public
market with adequate trading volume.
(f) If the determination of the Fair Market Value is satisfactory to
Executive, he shall notify Corporation of his exercise of his right hereunder,
stating the number of shares he wishes to sell. Corporation shall then notify
Executive, within ten (10) days following Executive's notice, which of Bank or
Corporation will purchase the Put Stock. Such notice from Corporation shall set
forth a time and place for closing of the purchase of the Put Stock, which shall
take place no later than five (5) days after such notice. At the closing,
Executive shall deliver the certificate representing the Put Stock, duly
endorsed for transfer in block, free and clear of all liens and encumbrances,
against delivery by the designated purchaser of the Fair Market Value of the Put
Stock paid by bank or certified check.
12. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this
Agreement by either the Bank or Executive resulting in damages to either party,
that party may recover from the party breaching the Agreement any and all
damages that may be sustained.
13. DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, the
term "Change of Control" shall mean:
(a) the acquisition of the beneficial ownership of at least 40% of the
Bank's and/or the Corporation's voting securities or all or substantially all of
the assets of the Bank and/or the Corporation by a single person or entity or a
group of affiliated persons or entities, or
(b) the merger, consolidation or combination of the Bank and/or the
Corporation with an unaffiliated corporation in which the directors of the Bank
and/or the Corporation,
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immediately prior to such merger, consolidation or combination constitute less
than a majority of the Board of Directors of the surviving, new or combined
entity, or
(c) during any period of two (2) consecutive years during the term of the
Agreement, individuals who at the beginning of such period constitute the Board
of Directors of the Bank cease for any reason to constitute at least a majority
thereof.
14. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this
Agreement, the date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, acquire the beneficial ownership of 40% more
of the Bank's and/or the Corporation's voting securities, or
(b) the date of the transfer of all or substantially all of the Bank's
and/or the Corporation's assets, or
(c) the date on which a merger, consolidation or combination is
consummated, as applicable, or
(d) the date on which individuals who formerly constituted a majority of
the Board of Directors of the Bank ceased to be a majority.
15. OBLIGATIONS OF CORPORATION. The Corporation expressly agrees that
should the Bank for any reason be unable to or shall otherwise not perform its
obligations under this Agreement, the Corporation shall pay to the Executive the
compensation to which the Executive is entitled under this Agreement and to
perform all other duties which the Bank may have under this Agreement, whether
or not the Executive is employed by the Corporation on the date of execution of
this Agreement.
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16. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: H. Xxxx Xxxxx
000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
If to the Bank: Commonwealth State Bank
Friends Lane and Xxxxx # 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Chairman of the Board
If to the Corporation: Penncore Financial Services Corporation
Friends Lane and Xxxxx # 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Chairman of the Board
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
17. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon the Executive, the Corporation and any successor to the Corporation, and
the Bank and any successor to the Bank.
18. ENFORCEMENT OF SEPARATE PROVISIONS. Should provisions of this Agreement
be ruled unenforceable for any reasons, the remaining provisions of this
Agreement shall be unaffected thereby and shall remain in full force and effect.
19. AMENDMENT. This Agreement may be amended or cancelled only by mutual
agreement of the parties in writing without the consent of any other person and,
so
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long as the Executive lives, no person other than the parties hereto, shall have
any rights under or interest in this Agreement or the subject matter hereof.
20. ATTORNEY'S FEES AND COSTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs, and necessary
disbursements in addition to any other relief that may be proper.
21. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. If the Executive dies prior
the expiration of the term of employment, any monies that may be due him from
the Bank under this Agreement as of the date of death shall be paid to the
executor, administrator, or other personal representative of the Executive's
estate.
22. LAW GOVERNING. This Agreement shall be governed by an construed in
accordance with the laws of the Commonwealth of Pennsylvania.
23. ENTIRE AGREEMENT. This Agreement supercedes any and all agreements,
either oral or in writing, between the parties with respect to the employment by
the Executive by the Bank, and this Agreement contains all the covenants and
agreements between the parties with respect to the employment.
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ATTEST: PENNCORE FINANCIAL SERVICES
/s/ By: /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Secretary Treasurer Chairman of the Board
COMMONWEALTH STATE BANK
ATTEST:
/s/ By: /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------- ----------------------------------
Secretary/Treasurer Chairman of the Board
WITNESS:
/s/ Xxxxxx X. Xxxx /s/ H. Xxxx Xxxxx
---------------------------------- ----------------------------------
Xxxxxx X. Xxxx H. Xxxx Xxxxx
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