EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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THIS AGREEMENT entered into this 15th day of September, 1999 (the
"Effective Date"), by and between Xxxxx X. Xxxxxxxx (the "Employee"), Xxxxx Bank
(the "Bank"), and Xxxxxxx Financial Corp. (the "Company").
WHEREAS, the Executive continues to serve the bank in an executive
capacity under the terms and conditions set forth in this agreement; and
WHEREAS, the Employee has heretofore been employed by the Bank as its
Chief Financial Officer and is experienced in all phases of the business of the
Bank; and
WHEREAS, the Boards of Directors of the Bank and of the Company believe
it is in their mutual best interests to enter into this Agreement with the
Employee in order to assure continuity of management and to reinforce and
encourage the continued attention and dedication of the Employee to his assigned
duties; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Employee, the Bank and the Company.
NOW, THEREFORE, it is AGREED as follows:
Description of Duties: Responsible for managing the Finance and Operations Group
in an effective manner. Primary duties include ongoing management of finance,
accounting and investment activities; timely and accurate filing of all
regulatory reports; an appropriate budgeting process and asset/liability and
interest rate risk management. Managing the Operations Division in order to
provide efficient, accurate and cost-effective technical and operational support
services. Managing the Bank marketing efforts, coordinating investor relations
function and oversight of the Bank non-deposit product sales. Supervising
assigned personnel; communicating and interfacing with other divisions and
management personnel. Reports to the President and Chief Executive Officer.
1. Defined Terms
When used anywhere in this Agreement, the following terms shall have
the meaning set forth herein.
(a) "Change in Control" shall mean any one of the following events: (I) the
acquisition of ownership, holding or power to vote more than 25% of the Bank's
or the Company's voting stock, (ii) the acquisition of the ability to control
the election of a majority of the Bank's or the Company's directors, (iii) the
acquisition of a controlling influence over the management or policies of the
Bank or the Company by any person or by persons acting as a "group" (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934), or (iv) during
any period of two consecutive years, individuals (the "Continuing Directors")
who at the
beginning of such period constitute the Board of Directors of the Bank or the
Company (the "Existing Board") cease for any reason to constitute at least
two-thirds thereof, provided that any individual whose election or nomination
for election as a member of the Existing Board was approved by a vote of at
least two-thirds of the Continuing Directors then in office shall be considered
a Continuing Director. Notwithstanding the foregoing, in the case of (I), (ii)
and (iii) hereof, ownership or control of the Bank by the Company itself shall
not constitute a Change in Control. For purposes of this paragraph only, the
term "person" refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and as interpreted through applicable rulings and regulations in
effect from time to time.
(c) "Codess.280G Maximum" shall mean product of 2.99 and his "base amount"
as defined in Code ss.280G(b)(3).
(d) "Good Reason" shall mean any of the following events, which has not
been consented to in advance by the Employee in writing: (I) the requirement
that the Employee move his personal residence, or perform his principal
executive functions, more than sixty (60) miles from his primary office as of
the date of the Change in Control; (ii) a material reduction in the Employee's
base compensation as in effect on the date of the Change in Control or as the
same may be increased from time to time; (iii) the failure by the Bank or the
Company to continue to provide the Employee with compensation and benefits
provided for on the date of the Change in Control, as the same may be increased
from time to time, or with benefits substantially similar to those provided to
him under any of the employee benefit plans in which the Employee now or
hereafter becomes a participant, or the taking of any action by the Bank or the
Company which would directly or indirectly reduce any of such benefits or
deprive the Employee of any material fringe benefit enjoyed by him at the time
of the Change in Control or within the protected period; (iv) the assignment to
the Employee of duties and responsibilities materially different from those
normally associated with his position; (v) a failure to elect or reelect the
Employee to the Board of Directors of the Bank or the Company, if the Employee
is serving on such Board on the date of the Change in Control; (vi) a material
diminution or reduction in the Employee's responsibilities or authority
(including reporting responsibilities) in connection with his employment with
the Bank or the Company; or (vii) a material reduction in the secretarial or
other administrative support of the Employee. In addition, "Good Reasons" shall
mean an impairment of the Employee's health to an extent that it makes continued
performance of his duties hereunder hazardous to his physical or mental health.
(e) "Just Cause" shall mean, in the good faith determination of the Bank's
Board of Directors, the Employee's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses)
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or final cease-and-desist order, or material breach of any provision of this
Agreement. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. No act, or failure to
act, on the Employee's part shall be considered "willful" unless he has acted,
or failed to act, with an absence of good faith and without a reasonable belief
that his action or failure to act was in the best interest of the Bank and the
Company.
(f) "Protected Period" shall mean the period that begins on the date six
months before a Change in Control and ends on the later of the first annual
anniversary of the Change in Control or the expiration date of this Agreement.
2. Employment. The Employee is employed as the Chief Financial Officer of
the Bank and of the Company. In each capacity, the Employee shall render such
administrative and management services for the Bank and the Company as are
currently rendered and as are customarily performed by persons situated in a
similar executive capacity. The Employee shall also promote, by entertainment or
otherwise, as and to the extent permitted by law, the business of the Bank and
the Company. The Employee's other duties shall be such as the Boards of
Directors of the Bank and the Company may from time to time reasonably direct,
including normal duties as an officer of the Bank.
3. Base Compensation. The Bank agrees to pay the Employee during the term
of this Agreement a salary at the rate of $110,000.00 per annum, payable in cash
not less frequently than monthly. The Board of Directors of the Bank shall
review, not less often than annually, the rate of the Employee's salary, and
shall increase the employee's base salary by no less than $3,000.00 per year for
2000, 2001, 2002, 2003, 2004. The Company hereby agrees that, in lieu of paying
the Employee a base salary during the term of this Agreement, it shall be
jointly and severally liable with the Bank for the payment of all amounts due
under this Agreement. Nevertheless, the Board of Directors of the Company may in
its discretion at any time during the term of this Agreement agree to pay the
Employee a base salary for the remaining term of this Agreement. If the Board of
Directors of the Company agrees to pay such salary, the Board shall thereafter
review, not less often than annually, the rate of the Employee's salary, and in
its sole discretion may decide to increase his salary.
Notwithstanding the foregoing, following a Change in Control, the Boards of
Directors of the Bank and the Company shall continue to annually review the rate
of the Employee's salary, and shall increase said rate of salary by a percentage
which is not less than the average annual percentage increase in salary that the
Employee received over the three calendar years immediately preceding the year
in which the Change in Control occurs.
4. Discretionary Bonuses. The Employee shall participate in an equitable
manner with all other senior management employees of the Bank and in
discretionary bonuses that the Boards of Directors of the Bank and the Company
may award from time to time to their senior management employees. No other
compensation provided for in this Agreement shall be deemed
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a substitute for the Employee's right to participate in such discretionary
bonuses. Notwithstanding the foregoing, following a Change in Control, the
Employee shall receive discretionary bonuses that are made no less frequently
than, and in annual amounts not less than, the average annual discretionary
bonuses paid to the Employee during the three calendar years immediately
preceding the year in which the Change in Control occurs.
5. Participation in Retirement, Medical and Other Plans.
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(a) During the term of this Agreement, the Employee shall be eligible to
participate in the following benefit plans: group hospitalization, disability,
health, dental, sick leave, life insurance, travel and/or accident insurance,
retirement, pension, and/or other present or future qualified plans provided by
the Bank, generally which benefits, taken as a whole, must be at least as
favorable as those in effect on the Effective Date and the Company.
(b) The Employee shall be eligible to participate in any fringe benefits
which are or may become available to the Bank's and the Company's senior
management employees, including for example: any stock option or incentive
compensation plans, and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this
Agreement. The Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which he shall incur in connection with his services under
this Agreement upon substantiation of such expenses in accordance with the
policies of the Bank and the Company. Additionally, the Employee shall be
entitled to:
(1) Banking Industry Functions. The Employee may devote reasonable time to
attending seminars and meetings sponsored by the Pennsylvania Bankers
Association, the American Bankers Association and other banking or educational
organizations at the expense of the Bank.
(2) Other Perquisites and Benefits. The Executive shall be entitled to
receive such other perquisites and fringe benefits as the Board of Directors of
the Bank reasonably deems appropriate in its sole discretion.
6. Term. The Bank and the Company hereby employ the Employee, and the
Employee hereby accepts such employment under this Agreement, for the period
commencing on the Effective Date and ending sixty months thereafter (or such
earlier date as is determined in accordance with Section 10 or 12).
In the event the Employee serves the full term of this Agreement, and the
Bank does not offer to renew this Agreement upon substantially the same terms
and conditions for an additional five (5) year term, the Employee shall be
entitled to a severance allowance of twelve months of his then current base
annual salary, plus such vested employee benefits to which the Employee may be
entitled when due and payable, and the Bank shall have no further obligations to
the Employee under this Agreement, EXCEPT that in such event, the Bank shall
provide, at the
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Employee's request, out-placement services to the Employee through Drake, Beam,
and Xxxxx, New York, New York, or such comparable out-placement service as the
parties shall select. The Bank's costs for such services shall not exceed 17% of
the Employee's then current base annual salary.
7. Loyalty; Noncompetition; Nondisclosure.
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(a) Loyalty. During the period of his employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote substantially all his full business time, attention,
skill, and efforts to the faithful performance of his duties hereunder;
provided, however, from time to time, Employee may serve on the boards of
directors of, and hold any other offices or positions in, companies or
organizations, which will not present any conflict of interest with the Bank,
the Company or any of their subsidiaries or affiliates or unfavorably affect the
performance of Employee's duties pursuant to this Agreement, or will not violate
any applicable statute or regulation. "Full business time" is hereby defined as
that amount of time usually devoted to like companies by similarly situated
executive officers. Except with the prior written approval of the Board of
Directors of the Bank, the Executive shall not engage in any other business or
commercial activities, duties or pursuits, during the term of this Agreement.
Under no circumstances may the Employee engage in any business or commercial
activities, duties or pursuits which compete with the business or commercial
activities of the Bank nor may the Employee serve as a director or officer or in
any other capacity in a company or financial institution which competes with the
Bank. Investments and personal activities not resulting in material compensation
or a conflict of interest with the Bank shall not be deemed a breach of the
restrictions of this paragraph. Participation in trade associations, charitable,
civil or similar not-for-profit, philanthropic or eleemosynary organizations,
including service as an officer or director, shall not be deemed a breach of
this Agreement, but the total amount of time spent by the Employee in such
activities during normal working hours shall be periodically reviewed by the
Board of Directors of the Bank.
(b) Noncompetition. The Employee covenants and agrees as follows: the
Employee shall not directly or indirectly, within the marketing area of the Bank
or the Company (defined as Xxxxx County, Pennsylvania) or any future marketing
area of the Bank or the Company (defined as an area within fifty (50) miles of
any branch office located outside of Xxxxx County, Pennsylvania and begun during
the Employee's employment under the terms of this Agreement), enter into or
engage generally in competition with the Bank or the Company either as a sole
proprietor or as a partner or joint venturer, or as a director, officer,
shareholder (except as a shareholder of less than five percent (5%) of the
outstanding shares of a corporation if Executive is not an employee, officer or
director of such corporation), employee or agent for any person, for a period of
one (1) year after the date of termination of his employment if (I) the
Employee's employment is terminated for Just Cause pursuant to Section 10 of
this Agreement, or (ii) such termination is the result of a resignation by the
Employee other than pursuant to subsection
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10(d)(2) or subsection 12(a) of this Agreement. The Employee agrees that any
breach of restrictions set forth in this paragraph shall result in irreparable
injury to the Bank and the Company and for which they shall have not adequate
remedy at law and the Bank and the Company shall be entitled to injunctive
relief in order to enforce the provisions hereof. In the event that this
paragraph shall be determined by any court of competent jurisdiction to be
unenforceable in part by reason of it being too great a period of time or
covering too great a geographical area, it shall be in full force and effect as
to that period of time or geographical area determined to be reasonable by the
court.
(c) Unauthorized Disclosure. At no time during the period of his employment
hereunder and thereafter, shall the Employee, without the written consent of the
Boards of Directors of the Bank or a person authorized thereby, knowingly
disclose to any person, other than an employee of the Bank or the Company or a
person to whom disclosure is reasonably necessary or appropriate in connection
with the performance by the Employee of his duties as an executive of the Bank
or the Company, any material confidential information obtained by him while in
the employ of the Bank or the Company with respect to any of the Bank's or the
Company's services, products, improvements, formulas, designs or styles,
processes, customers, methods of distribution of any business practices the
disclosure of which he knows will be materially damaging to the Bank or the
Company; provided, however, that confidential information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by the Employee) 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 and the Bank.
(d) Nothing contained in this Section shall be deemed to prevent or limit
the Employee's right to invest in the capital stock or other securities of any
business dissimilar from that of the Bank or the Company, or, solely as a
passive or minority investor, in any business.
8. Standards. The Employee shall perform his duties under this Agreement in
accordance with such reasonable standards as the Boards of Directors of the Bank
and the Company may establish from time to time. The Bank and the Company will
provide Employee with the working facilities and staff customary for similar
executives and necessary for him to perform his duties.
9. Vacation and Sick Leave. At such reasonable times as the Board shall in
its discretion permit, the Employee shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as vacation time, provided that:
(a) The Employee shall be entitled to an annual vacation in accordance with
the policies that the Board periodically establishes for senior management
employees of the Bank, but not less than three weeks in any calendar year
(pro-rated in any calendar year during which the
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Employee is employed hereunder for less than the entire calendar year in
accordance with the number of days in such year which he is so employed).
(b) The Employee shall not receive any additional compensation from the
Bank or the Company on account of his failure to take a vacation or sick leave,
and the Employee shall not accumulate unused vacation from one fiscal year to
the next, except in either case to the extent authorized by the Board.
(c) In addition to the aforesaid paid vacations, the Employee shall be
entitled without loss of pay, to absent himself voluntarily from the performance
of his employment with the Bank and the Company for such additional periods of
time and for such valid and legitimate reasons as the Board may in its
discretion determine. Further, the Boards of Directors of the Bank and the
Company may grant to the Employee a leave or leaves of absence, with or without
pay, at such time or times and upon such terms and conditions as such Boards in
their discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick leave
benefit as established by the Board of Directors of the Bank and the Company.
10. Termination and Termination Pay. Subject to Section 12 hereof, the
Employee's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Employee's employment under this Agreement shall terminate
upon his death during the term of this Agreement, in which event the Employee's
estate shall be entitled to receive the compensation due the Employee through
the last day of the calendar month in which his death occurred.
(b) Disability. The Bank and the Company may terminate the Employee's
employment if the Employee becomes totally and permanently disabled. The
Employee shall be deemed totally and permanently disabled if he becomes unable
to perform a substantial portion of his duties under this Agreement and a
physician selected by Bank determines such inability will continue for a period
of six (6) months or more and is likely to be permanent and the Employee
qualifies to receive total disability benefits under Bank's disability insurance
plan. Such termination shall be without prejudice to any right the Employee may
have to receive benefits under any disability insurance plan maintained by Bank
or the Company.
(c) Just Cause. The Board may, by written notice to the Employee,
immediately terminate his employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause. For the purposes of this Agreement, the Bank
shall have "Just Cause" to terminate the Employee's employment hereunder upon:
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(1) the willful failure by the Employee to substantially perform
his material duties hereunder other than any such failure resulting
from the Employee's incapacity due to physical or mental illness; or
(2) conviction of a felony; or
(3) the willful violation by the Employee of the provisions of
this Agreement; or
(4) the willful violation by the Employee of material Bank or
Company policy as formally expressed by the Board of Directors of the
Company or the Bank; or
(5) the violation of state or federal banking, tax or financial
laws, regulations or rules in his own conduct or in the operation of
the Bank or the Company, the result of which is materially adverse to
the Bank or the Company; or
None of the above which are capable of being cured shall be grounds for
termination until Bank and the Company give notice thereof to the Employee and
the Employee fails to cure such failure or violation within thirty (30) days of
said notice, or if said failure or violation cannot be cured within thirty (30)
days, within a reasonable time thereafter if the Employee is diligently
attempting to cure the failure or violation.
Bank and the Company may terminate this Agreement without notice and
opportunity to cure upon receipt of a final written directive or order of any
governmental body or entity having jurisdiction over the Bank or the Company
requiring termination or removal of the Employee from the positions referenced
in Section 2 of this Agreement.
(d) Without Just Cause; Constructive Discharge. (1) The Boards of Directors
of the Bank and the Company may, by written notice to the Employee, immediately
terminate his employment at any time for a reason other than Just Cause, in
which event the Employee shall be entitled to receive the following compensation
and benefits (unless such termination occurs during the Protected Period in
which event the benefits and compensation provided for in Section 12 shall
apply): (I) the salary provided pursuant to Section 3 hereof, up to the later of
the expiration date of this Agreement (including any renewal term) of this
Agreement and the date that is 12 months after the employee's last day of
employment, and (ii) long-term disability and such medical benefits as are
available to the Employee under the provisions of COBRA for eighteen (18)
months. All amounts payable to the Employee shall be paid, at the option of the
Employee, either (I) in periodic payments through the Expiration Date, or (II)
in one lump sum within ten (10) days of such termination.
(2) The Employee shall be entitled to receive the compensation and benefits
payable under subsection 10(d)(1) hereof in the event that the Employee
voluntarily terminates employment within 90 days of an event that constitutes
Good Reason, (unless such voluntary
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termination occurs during the Protected Period, in which event the benefits and
compensation provided for in Section 12 shall apply).
(e) Termination or Suspension Under Federal Law. (1) If the Employee is
removed and/or permanently prohibited from participating in the conduct of the
Bank's affairs by an order issued under Sections 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) and (g)(1)), all
obligations of the Bank under this Agreement shall terminate, as of the
effective date of the order, but vested rights of the parties shall not be
affected.
(2) If the Bank is in default (as defined in Section 3(x)(1) of FDIA), all
obligations of the Bank under this Agreement shall terminate as of the date of
default; however, this Paragraph shall not affect the vested rights of the
parties.
(3) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs, the Bank's obligations
under this Agreement shall be suspended as of the date of such service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Bank may in its discretion (I) pay the Employee all or part of the
compensation withheld while its contract obligations were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
(f) Voluntary Termination by Employee. Subject to Section 12(a)(ii) hereof,
the Employee may voluntarily terminate employment with the Bank during the term
of this Agreement, upon at least ninety (90) days' prior written notice to the
Board of Directors, in which case the Employee shall receive only his
compensation, vested rights and employee benefits up to the date of his
termination (unless such termination occurs pursuant to Section 10(d)(2) hereof
or within the Protected Period, in which event the benefits and compensation
provided for in Sections 10(d) or 12, as applicable, shall apply).
11. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.
12. Change in Control Severance Payments.
(a) Trigger Events. The Employee shall be entitled to collect the severance
benefits set forth in Subsection (b) hereof in the event that (I) the Employee
voluntarily terminates employment either for any reason within the 30-day period
beginning on the date of a Change in Control, (ii) the Employee voluntarily
terminates employment within 90 days of an event that both occurs during the
Protected Period and constitutes Good Reason, or (iii) the Bank or the Company
or their successor(s) in interest terminate the Employee's employment without
his written consent and for any reason other than Just Cause during the
Protected Period.
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(b) Amount of Severance Benefit. If the Employee becomes entitled to
collect severance benefits pursuant to Section 12(a) hereof, the Bank shall pay
the Employee:
(I) a severance benefit equal to the maximum as defined
under Code ss.280G(b)(2) that the Employee receives on account of
the Change in Control, and
(ii) pay for long-term disability and provide such medical
benefits as are available to the Employee under the provisions of
COBRA, for eighteen (18) months (or such longer period, up to 24
months, if COBRA is amended).
Said sum shall be paid in one lump sum within ten (10) days of the later of
the date of the Change in Control and the Employee's last day of employment with
the Bank or the Company.
(c) Funding of Grantor Trust upon Change in Control. Not later than ten
business days after a Change in Control, the Bank shall (I) establish a grantor
trust (the "Trust") that is designed in accordance with Revenue Procedure 92-64
and has a trustee independent of the Bank and the Company, (ii) deposit in said
Trust an amount equal to the Code ss.280G Maximum, unless the Employee has
previously provided a written release of any claims under this Agreement, and
(iii) provide the trustee of the Trust with a written direction to hold said
amount and any investment return thereon in a segregated account for the benefit
of the Employee, and to follow the procedures set forth in the next paragraph as
to the payment of such amounts from the Trust. Upon the earlier of the Trust's
final payment of all amounts due under the following paragraph or the date 15
months after the Change in Control, the trustee of the Trust shall pay to the
Bank the entire balance remaining in the segregated account maintained for the
benefit of the Employee. The Employee shall thereafter have no further interest
in the Trust.
During the 12-consecutive month period after a Change in Control, the
Employee may provide the trustee of the Trust with a written notice requesting
that the trustee pay to the Employee an amount designated in the notice as being
payable pursuant to this Agreement. Within three business days after receiving
said notice, the trustee of the Trust shall send a copy of the notice to the
Bank via overnight and registered mail return receipt requested. On the tenth
(10th) business day after mailing said notice to the Bank, the trustee of the
Trust shall pay the Employee the amount designated therein in immediately
available funds, unless prior thereto the Bank provides the trustee with a
written notice directing the trustee to withhold such payment. In the latter
event, the trustee shall submit the dispute to non-appealable binding
arbitration for a determination of the amount payable to the Employee pursuant
to this Agreement, and the costs of such arbitration shall be paid by the Bank.
The trustee shall choose the arbitrator to settle the dispute, and such
arbitrator shall be bound by the rules of the American Arbitration Association
in making his determination. The parties and the trustee shall be bound by the
results of the arbitration and, within 3 days of the determination by the
arbitrator, the trustee shall pay from the Trust the amounts required to be paid
to the Employee and/or the Bank, and in no event shall the trustee be liable to
either party for making the payments as determined by the arbitrator.
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Upon the earlier of (I) any payment from the Trust to the Employee, or (ii)
the date twelve (12) months after the date on which the Bank makes the deposit
referred to in the first paragraph of this subsection 11(d), the trustee of the
Trust shall pay to the Bank the entire balance remaining in the segregated
account maintained for the benefit of the Employee. The Employee shall
thereafter have no further interest in the Trust pursuant to this Agreement.
(d) Indemnification. The Bank shall indemnify and hold the Executive
harmless from any and all loss, expense or liability that he may incur due to
his services for the Company (including any liability he may ever incur under
Code ss. 4999, or a successor, as the result of benefits he collects pursuant to
Sections 10 or 12).
13. Indemnification. The Bank and the Company agree that their respective
Bylaws shall continue to provide for indemnification of directors, officers,
employees and agents of the Bank and the Company, including the Employee during
the full term of this Agreement, and to at all times provide adequate insurance
for such purposes.
14. Additional Offices. The Employee agrees to serve without additional
compensation, if elected or appointed thereto, as an officer in one or more
offices or as a director of any subsidiary of the Company or the Bank; provided,
however, the Employee shall not be required to serve in such additional offices
or as a director of any subsidiary, if such service would expose him, as an
individual, to adverse financial conditions.
15. Reimbursement of Employee for Enforcement Proceedings. In the event
that any dispute arises between the Employee and the Bank as to the terms or
interpretation of this Agreement, whether instituted by formal legal proceedings
or otherwise, including any action that the Employee takes to defend against any
action taken by the Bank or the Company, the Employee shall be reimbursed for
all costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceedings or actions, provided that the Employee obtains either a
written settlement or a final judgement by a court of competent jurisdiction
substantially in his favor. Such reimbursement shall be paid within ten (10)
days of Employee's furnishing to the Bank written evidence, which may be in the
form, among other things, of a canceled check or receipt, of any costs or
expenses incurred by the Employee.
16. Federal Income Tax Withholding. The Bank and the Company may withhold
all federal and state income or other taxes from any benefit payable under this
Agreement as shall be required pursuant to any law or government regulation or
ruling.
17.Successors and Assigns.
(a) Bank and Company. This Agreement shall not be assignable by the Bank
and the Company, provided that this Agreement shall inure to the benefit of and
be binding upon any corporate or other successor of the Bank and the Company
which shall acquire, directly or
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indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank.
(b) Employee. Since the Bank and the Company are contracting for the unique
and personal skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties hereunder without first obtaining
the written consent of the Bank and the Company; provided, however, that nothing
in this paragraph shall preclude (I) the Employee from designating a beneficiary
to receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of the Employee or his estate
from assigning any rights hereunder to the person or persons entitled thereunto.
(c) Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
18. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
19. Applicable Law. Except to the extent preempted by Federal law, the laws
of the Commonwealth of Pennsylvania shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
20. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
21. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
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