EXHIBIT 2.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
[ ] day of [ ], 1999, by and between XXXX X. XXXXXXXX ("Executive") and NBT
BANCORP INC., a Delaware corporation having its principal office in Norwich, New
York ("NBTB")
W I T N E S S E T H T H A T :
WHEREAS, the Agreement and Plan of Merger (the "Merger Agreement")
dated as of August 16, 1999 by and between NBTB and Lake Ariel Bancorp, Inc., a
Pennsylvania corporation having its principal office in Lake Ariel, Pennsylvania
("LABN"), provides that LABN will be merged with and into NBTB (the "Merger");
WHEREAS, Executive is the president and chief executive officer of LA
Bank, National Association, a national banking association which is a
wholly-owned subsidiary of LABN ("LA Bank");
WHEREAS, NBTB desires to secure the employment of Executive upon
consummation of the Merger;
WHEREAS, Executive is desirous of entering into the Agreement for such
periods and upon the terms and conditions set forth herein; and
WHEREAS, to assist in achieving the objectives of the transactions
described in the Merger Agreement, section 4.8 of the Merger Agreement
contemplates that Executive will enter into an employment agreement as a
condition to the consummation of the transactions described therein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, intending to be legally bound, the parties
agree as follows:
1. Employment; Responsibilities and Duties.
(a) Contingent upon the occurrence of the Merger, NBTB hereby
agrees to cause LA Bank to employ Executive, and Executive hereby agrees to
serve as president and chief executive officer of LA Bank during the Term of
Employment. Executive shall have such duties, responsibilities, and authority as
shall be set forth in the bylaws of LA Bank on the date of this Agreement or as
may otherwise be determined by NBTB or by LA Bank. During the Term of
Employment, Executive shall report directly to the chief executive officer of
NBTB.
(b) Contingent upon the occurrence of the Merger, NBTB hereby
agrees to cause Executive to be reelected to the board of directors of LA Bank
for successive terms throughout the Term of Employment.
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(c) Executive shall devote his full working time and best
efforts to the performance of his responsibilities and duties hereunder and to
the retention of the customer relationships to which LA Bank has been a party
prior to the date of this Agreement and the expansion of the customer
relationships of LA Bank subsequent to the date of this Agreement. During the
Term of Employment, Executive shall not, without the prior written consent of
the Board of Directors of LA Bank, render services as an employee, independent
contractor, or otherwise, whether or not compensated, to any person or entity
other than LA Bank or its affiliates; provided that Executive may, where
involvement in such activities does not individually or in the aggregate
significantly interfere with the performance by Executive of his duties or
violate the provisions of section 4 hereof, (i) render services to charitable
organizations, (ii) manage his personal investments, and (iii) with the prior
permission of the Board of Directors of NBTB, hold such other directorships or
part-time academic appointments or have such other business affiliations as
would otherwise be prohibited under this section 1.
2. Term of Employment.
(a) The term of this Agreement ("Term of Employment") shall be
the period commencing on the first business day following the date of the Merger
(the "Commencement Date") and continuing until the Termination Date, which shall
mean the earliest to occur of:
(i) the third anniversary of the Commencement Date,
unless the Term of Employment shall be extended for one additional year by
Executive, upon written notice provided by Executive to NBTB not later than nine
months prior to the third anniversary of the Commencement Date;
(ii) the death of Executive;
(iii) Executive's inability to perform his duties
hereunder, as a result of physical or mental disability as reasonably determined
by the personal physician of Executive, for a period of at least 180 consecutive
days or for at least 180 days during any period of twelve consecutive months
during the Term of Employment; or
(iv) the discharge of Executive by NBTB "for cause,"
which shall mean one or more of the following:
(A) any willful or gross misconduct by
Executive with respect to the business and affairs of NBTB or LA Bank, or with
respect to any of its affiliates for which Executive is assigned material
responsibilities or duties;
(B) the conviction of Executive of a felony
(after the earlier of the expiration of any applicable appeal period without
perfection of an appeal by Executive or the denial of any appeal as to which no
further appeal or review is available to Executive) whether or not committed in
the course of his employment by NBTB;
(C) Executive's willful neglect, failure, or
refusal to carry out his
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duties hereunder in a reasonable manner (other than any such failure resulting
from disability or death or from termination by Executive for Good Reason, as
hereinafter defined); or
(D) the breach by Executive of any
representation or warranty in section 6(a) hereof or of any agreement contained
in section 1, 4, 5, or 6(b) hereof, which breach is material and adverse to NBTB
or LA Bank or any of its affiliates for which Executive is assigned material
responsibilities or duties; or
(v) Executive's resignation from his position as
chief executive officer of LA Bank other than for "Good Reason," as hereinafter
defined; or
(vi) the termination of Executive's employment by
NBTB "without cause," which shall be for any reason other than those set forth
in subsections (i), (ii), (iii), (iv), or (v) of this section 2(a), at any time,
upon the thirtieth day following notice to Executive; or
(vii) Executive's resignation for "Good Reason."
"Good Reason" shall mean, without Executive's express written consent,
reassignment of Executive to a position other than as president and chief
executive officer of LA Bank other than for "Cause," or a decrease in the amount
of Executive's salary from the amount established in section 3(a) hereof.
(b) In the event that the Term of Employment shall be
terminated for any reason other than that set forth in section 2(a)(vi) or
2(a)(vii) hereof, Executive shall be entitled to receive, upon the occurrence of
any such event:
(i) any salary (as hereinafter defined) payable
pursuant to section 3(a)(i) hereof which shall have accrued as of the
Termination Date; and
(ii) such rights as Executive shall have accrued as
of the Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.
(c) In the event that the Term of Employment shall be
terminated for the reason set forth in section 2(a)(vi) or 2(a)(vii) hereof,
Executive shall be entitled to receive:
(i) for the period commencing on the date immediately
following the Termination Date and ending upon and including the third
anniversary of the Commencement Date, salary payable at the rate established
pursuant to section 3(a)(i) hereof, in a manner consistent with the normal
payroll practices of LA Bank with respect to executive personnel as presently in
effect or as they may be modified by LA Bank from time to time; and
(ii) such rights as Executive may have accrued as of
the Termination Date
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under the terms of any plans or arrangements in which he participates pursuant
to section 3(b) hereof, any right to reimbursement for expenses accrued as of
the Termination Date payable pursuant to section 3(e) hereof, and the right to
receive the cash equivalent of paid annual leave and sick leave accrued as of
the Termination Date pursuant to section 3(c) hereof.
(d) Any provision of this section 2 to the contrary
notwithstanding, in the event that the employment of Executive with NBTB or LA
Bank is terminated in any situation described in section 3 of the
change-in-control letter agreement dated [ ] between NBTB and Executive (the
"Change-in-Control Agreement") so as to entitle Executive to a severance payment
and other benefits described in section 3 of the Change-in-Control Agreement,
then Executive shall be entitled to receive the following, and no more, under
this section 2:
(i) any salary payable pursuant to section 3(a)(i)
hereof which shall have accrued as of the Termination Date;
(ii) such rights as Executive shall have accrued as
of the Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof;
and
(iii) the severance payment and other benefits
provided in the Change-in-Control Agreement.
3. Compensation. For the services to be performed by Executive for LA
Bank under this Agreement, Executive shall be compensated in the following
manner:
(a) Salary. During the Term of Employment:
(i) LA Bank shall pay Executive a salary which, on an
annual basis, shall not be less than $230,000, assuming Executive performs
competently. Salary shall be payable in accordance with the normal payroll
practices of LA Bank with respect to executive personnel as presently in effect
or as they may be modified by LA Bank from time to time.
(ii) Executive shall be eligible to be considered for
salary increases, upon review, in accordance with the compensation policies of
NBTB with respect to executive personnel as presently in effect or as they may
be modified by NBTB from time to time.
(iii) Executive shall be eligible to be considered
for performance bonuses of up to 75 percent of salary (with his performance
evaluated primarily based upon the performance of LA Bank, and secondarily based
upon the performance of NBTB taken as a whole), in accordance with the
compensation policies of NBTB with respect to executive personnel as presently
in effect or as they may be modified by NBTB from time to time.
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(b) Employee Benefit Plans or Arrangements. During the Term of
Employment, Executive shall be entitled to participate in all employee benefit
plans of NBTB, as presently in effect or as they may be modified by NBTB from
time to time, under such terms as may be applicable to officers of Executive's
rank employed by NBTB or its affiliates, including, without limitation, plans
providing retirement benefits, stock options, medical insurance, life insurance,
disability insurance, and accidental death or dismemberment insurance, provided
that there be no duplication of such benefits as are provided under any other
provision of this Agreement. During the Term of Employment, medical insurance
for Executive will be procured through the same carrier that provided insurance
coverage to Executive as an employee of LA Bank as of June 30, 1999, or from
such other insurance carrier as shall be mutually acceptable to Executive and
NBTB.
(c) Supplemental Executive Retirement Plans. NBTB shall assume
and continue in effect the LA Bank, N.A. Salary Continuation Agreement between
LA Bank and Executive dated March 7, 1997, the Supplementary Retirement Benefit
Agreement between LA Bank and Xxxxxxxx dated January 6, 1995, and the Salary
Continuation Agreement between LA Bank and Xxxxxxxx dated May 5, 1989, and, in
return therefor, Executive renounces entitlement to benefits under any
supplemental executive retirement plan to which he would otherwise be entitled
as an executive of NBTB or an affiliate of NBTB.
(d) Vacation and Sick Leave. During the Term of Employment,
Executive shall be entitled to paid annual vacation periods and sick leave in
accordance with the policies of NBTB as in effect as of the Commencement Date or
as may be modified by NBTB from time to time as may be applicable to officers of
Executive's rank employed by NBTB or its affiliates, but in no event less than
four weeks of paid vacation per year.
(e) Automobile. During the Term of Employment, Executive shall
be entitled to the use of an automobile owned by LA Bank, the make, model, and
year of which automobile shall be appropriate to an officer of Executive's rank
employed by NBTB or its affiliates. Executive shall be responsible for all
expenses of ownership and use of such automobile, subject to reimbursement of
expenses for business use in accordance with section 3(h).
(f) Country Club Dues. During the Term of Employment,
Executive shall be reimbursed for dues and assessments incurred in relation to
Executive's membership at Country Club of Scranton.
(g) Life Insurance. During the Term of Employment, life
insurance paid by LA Bank on the life of Executive for the benefit of his
designated beneficiary or beneficiaries shall be maintained at no less than the
level of insurance maintained as of June 30, 1999.
(h) Withholding. All compensation to be paid to Executive
hereunder shall be subject to required withholding and other taxes.
(i) Expenses. During the Term of Employment, Executive shall
be reimbursed for reasonable travel and other expenses incurred or paid by
Executive in connection with the performance
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of his services under this Agreement, upon presentation of expense statements or
vouchers or such other supporting information as may from time to time be
requested, in accordance with such policies of NBTB as are in effect as of the
Commencement Date and as may be modified by NBTB from time to time, under such
terms as may be applicable to officers of Executive's rank employed by NBTB or
its affiliates.
4. Confidential Business Information; Non-Competition.
(a) Executive acknowledges that certain business methods,
creative techniques, and technical data of NBTB and its affiliates and the like
are deemed by NBTB to be and are in fact confidential business information of
NBTB or its affiliates or are entrusted to third parties. Such confidential
information includes but is not limited to procedures, methods, sales
relationships developed while in the service of NBTB or its affiliates,
knowledge of customers and their requirements, marketing plans, marketing
information, studies, forecasts, and surveys, competitive analyses, mailing and
marketing lists, new business proposals, lists of vendors, consultants, and
other persons who render service or provide material to NBTB or LA Bank or their
affiliates, and compositions, ideas, plans, and methods belonging to or related
to the affairs of NBTB or LA Bank or their affiliates. In this regard, NBTB
asserts proprietary rights in all of its business information and that of its
affiliates except for such information as is clearly in the public domain.
Notwithstanding the foregoing, information that would be generally known or
available to persons skilled in Executive's fields shall be considered to be
"clearly in the public domain" for the purposes of the preceding sentence.
Executive agrees that he will not disclose or divulge to any third party, except
as may be required by his duties hereunder, by law, regulation, or order of a
court or government authority, or as directed by NBTB, nor shall he use to the
detriment of NBTB or its affiliates or use in any business or on behalf of any
business competitive with or substantially similar to any business of NBTB or LA
Bank or their affiliates, any confidential business information obtained during
the course of his employment by LA Bank. The foregoing shall not be construed as
restricting Executive from disclosing such information to the employees of NBTB
or LA Bank or their affiliates.
(b) Executive hereby agrees that from the Commencement Date
until the second anniversary of the Termination Date, Executive will not (i)
engage in the banking business other than on behalf of NBTB or LA Bank or their
affiliates within the Market Area (as hereinafter defined), (ii) directly or
indirectly own, manage, operate, control, be employed by, or provide management
or consulting services in any capacity to any firm, corporation, or other entity
(other than NBTB or LA Bank or their affiliates) engaged in the banking business
in the Market Area, or (iii) directly or indirectly solicit or otherwise
intentionally cause any person known to Executive to be an employee, officer, or
member of the respective Boards of Directors of LA Bank or any of its affiliates
to engage in any action prohibited under (i) or (ii) of this section 4(b);
provided that the ownership by Executive as an investor of not more than five
percent of the outstanding shares of stock of any corporation, or the shares of
any investment company as defined in section 3 of the Investment Company Act of
1940, as amended, shall not in itself constitute a violation of Executive's
obligations under this section 4(b).
(c) Executive acknowledges and agrees that irreparable injury
will result to NBTB in the event of a breach of any of the provisions of this
section 4 (the "Designated Provisions") and that
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NBTB will have no adequate remedy at law with respect thereto. Accordingly, in
the event of a material breach of any Designated Provision, and in addition to
any other legal or equitable remedy NBTB or LA Bank may have, NBTB shall be
entitled to the entry of a preliminary and permanent injunction (including,
without limitation, specific performance) by a court of competent jurisdiction
in Chenango County, New York, Xxxxx County, Pennsylvania, or elsewhere, to
restrain the violation or breach thereof by Executive, and Executive submits to
the jurisdiction of such court in any such action.
(d) It is the desire and intent of the parties that the
provisions of this section 4 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this section
4 shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. In
addition, should any court determine that the provisions of this section 4 shall
be unenforceable with respect to scope, duration, or geographic area, such court
shall be empowered to substitute, to the extent enforceable, provisi
ons similar
hereto or other provisions so as to provide to NBTB, to the fullest extent
permitted by applicable law, the benefits intended by this section 4.
(e) As used herein, "Market Area" shall mean the area or areas
delineated by circles formed by radii extending twenty-five miles from (i) the
head office of LA Bank, (ii) the authorized branches of LA Bank as they may
exist from time to time, and (iii) each branch of a depository institution
affiliated with LA Bank for which Executive has or has had significant executive
or managerial responsibilities.
5. Life Insurance. In light of the unusual abilities and experience of
Executive, NBTB in its discretion may apply for and procure as owner and for its
own benefit insurance on the life of Executive, in such amount and in such form
as NBTB may choose. NBTB shall make all payments for such insurance and shall
receive all benefits from it. Executive shall have no interest whatsoever in any
such policy or policies but, at the request of NBTB, shall submit to medical
examinations and supply such information and execute such documents as may
reasonably be required by the insurance company or companies to which NBTB has
applied for insurance.
6. Representations and Warranties.
(a) Executive represents and warrants to NBTB that his
execution, delivery, and performance of this Agreement will not result in or
constitute a breach of or conflict with any term, covenant, condition, or
provision of any commitment, contract, or other agreement or instrument,
including, without limitation, any other employment agreement, to which
Executive is or has been a party.
(b) Executive shall indemnify, defend, and hold harmless NBTB
for, from, and against any and all losses, claims, suits, damages, expenses, or
liabilities, including court costs and counsel fees, which NBTB has incurred or
to which NBTB may become subject, insofar as such losses,
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claims, suits, damages, expenses, liabilities, costs, or fees arise out of or
are based upon any failure of any representation or warranty of Executive in
section 6(a) hereof to be true and correct when made.
7. Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed to have
been duly given if delivered personally or by messenger, transmitted by telex or
telegram, by express courier, or sent by registered or certified mail, return
receipt requested, postage prepaid. All communications shall be addressed to the
appropriate address of each party as follows:
If to NBTB:
NBT Bancorp Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
With a required copy to:
Xxxxx X. Xxxxxx, Esq.
Duane, Morris & Heckscher LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to Executive:
Xx. Xxxx X. Xxxxxxxx
R.D. 1, Xxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
All such notices shall be deemed to have been given on the date delivered,
transmitted, or mailed in the manner provided above.
8. Assignment. Neither party may assign this Agreement or any rights or
obligations hereunder without the consent of the other party.
9. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflict of law thereof. The parties hereby
designate the Chancery Court in New Castle County, Delaware to be the proper
jurisdiction and venue for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in such venue for such a
proceeding and agrees that it may be served with process in any action with
respect to this Agreement or the transactions contemplated thereby by certified
or registered mail, return receipt requested, or to its registered agent for
service of
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process in the State of Delaware. Each of the parties irrevocably and
unconditionally waives and agrees, to the fullest extent permitted by law, not
to plead any objection that it may now or hereafter have to the laying of venue
or the convenience of the forum of any action or claim with respect to this
Agreement or the transactions contemplated thereby brought in the courts
aforesaid.
10. Entire Agreement. This Agreement constitutes the entire
understanding among NBTB, LA Bank, and Executive relating to the subject matter
hereof. Any previous agreements or understandings between the parties hereto or
between Executive and LA Bank or any of its affiliates regarding the subject
matter hereof, including without limitation the terms and conditions of
employment, compensation, benefits, retirement, competition following
employment, and the like, are merged into and superseded by this Agreement.
Neither this Agreement nor any provisions hereof can be modified, changed,
discharged, or terminated except by an instrument in writing signed by the party
against whom any waiver, change, discharge, or termination is sought.
11. Illegality; Severability.
(a) Anything in this Agreement to the contrary
notwithstanding, this Agreement is not intended and shall not be construed to
require any payment to Executive which would violate any federal or state
statute or regulation, including without limitation the "golden parachute
payment regulations" of the Federal Deposit Insurance Corporation codified to
Part 359 of title 12, Code of Federal Regulations.
(b) If any provision or provisions of this Agreement shall
be held to be invalid, illegal, or unenforceable for any reason whatsoever:
(i) the validity, legality, and enforceability of
the remaining provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to
be invalid, illegal, or unenforceable) shall not in any way be affected or
impaired thereby; and
(ii) to the fullest extent possible, the provisions
of this Agreement (including, without limitation, each portion of any section of
this Agreement containing any such provisions held to be invalid, illegal, or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal, or unenforceable.
12. Arbitration. Subject to the right of each party to seek specific
performance (which right shall not be subject to arbitration), if a dispute
arises out of or related to this Agreement, or the breach thereof, such dispute
shall be referred to arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). A dispute subject to the
provisions of this section will exist if either party notifies the other party
in writing that a dispute subject to arbitration exists and states, with
reasonable specificity, the issue subject to arbitration (the "Arbitration
Notice"). The parties agree that, after the issuance of the Arbitration Notice,
the parties will try in good faith to resolve the dispute by mediation in
accordance with the Commercial Rules of Arbitration of AAA between the date of
the issuance of the Arbitration Notice and the date the dispute
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is set for arbitration. If the dispute is not settled by the date set for
arbitration, then any controversy or claim arising out of this Agreement or the
breach hereof shall be resolved by binding arbitration and judgment upon any
award rendered by arbitrator(s) may be entered in a court having jurisdiction.
Any person serving as a mediator or arbitrator must have at least ten years'
experience in resolving commercial disputes through arbitration. In the event
any claim or dispute involves an amount in excess of $100,000, either party may
request that the matter be heard by a panel of three arbitrators; otherwise all
matters subject to arbitration shall be heard and resolved by a single
arbitrator. The arbitrator shall have the same power to compel the attendance of
witnesses and to order the production of documents or other materials and to
enforce discovery as could be exercised by a United States District Court judge
sitting in the Northern District of New York. In the event of any arbitration,
each party shall have a reasonable right to conduct discovery to the same extent
permitted by the Federal Rules of Civil Procedure, provided that such discovery
shall be concluded within ninety days after the date the matter is set for
arbitration. In the event of any arbitration, the arbitrator or arbitrators
shall have the power to award reasonable attorney's fees to the prevailing
party. Any provision in this Agreement to the contrary notwithstanding, this
section shall be governed by the Federal Arbitration Act and the parties have
entered into this Agreement pursuant to such Act.
13. Costs of Litigation. In the event litigation is commenced to
enforce any of the provisions hereof, or to obtain declaratory relief in
connection with any of the provisions hereof, the prevailing party shall be
entitled to recover reasonable attorney's fees. In the event this Agreement is
asserted in any litigation as a defense to any liability, claim, demand, action,
cause of action, or right asserted in such litigation, the party prevailing on
the issue of that defense shall be entitled to recovery of reasonable attorney's
fees.
14. Affiliation. A company will be deemed to be "affiliated" with
NBTB or LA Bank according to the definition of "Affiliate" set forth in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended.
15. Headings. The section and subsection headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.
16. Agreement Contingent Upon Merger. This Agreement is contingent
upon the occurrence of the Merger and, if the Merger fails to occur, this
Agreement will be null and void and of no past or future effect.
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IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.
NBT BANCORP INC.
By:
---------------------------------------------
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
XXXX X. XXXXXXXX
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