EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS AGREEMENT is dated as of the 1st day of March, 2010, between COMM BANCORP, INC., a
Pennsylvania business corporation (“Comm Bancorp”), COMMUNITY BANK AND TRUST COMPANY, a
Pennsylvania state-chartered banking institution (the “Bank”) and Xxxxxxx X. Xxxxxx, Xx., an adult
individual and resident of the Commonwealth of Pennsylvania (“Executive”).
WITNESSETH
WHEREAS, Comm Bancorp and the Bank each desire to employ the Executive as it’s President and
Chief Executive Officer under the terms and conditions set forth herein; and
WHEREAS, the Executive desires to serve Comm Bancorp and 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. Comm Bancorp and the Bank each employ the Executive and the
Executive accepts employment with them for an initial period of three (3) years beginning on the
1st day of March 2010, and ending on the 28th day of February, 2013 subject,
however, to one-year automatic extensions at the end of each one (1) year period so that this
Agreement “evergreens” so as to have a constant three (3) year term as of the end of each contract
year unless either Comm Bancorp, the Bank or Executive gives the other written notice at least six
(6) months prior to the expiration of the then current contract year of their intention not to
extend this Agreement (subject to Paragraph 10 hereof), and also subject to prior termination of
this Agreement as set forth below.
2. POSITION AND DUTIES. The Executive shall serve as the President and Chief Executive
Officer of Comm Bancorp and the Bank, reporting only to the respective Boards of Directors Comm
Bancorp and the Bank: shall have supervision and control over, and responsibility for, the general
financial management and operation and general senior executive oversight of Comm Bancorp and the
Bank; and shall have such other powers and duties as may from time to time be prescribed by the
respective Boards of Directors of Comm Bancorp and the Bank, provided that such duties are
consistent with the Executive’s position as President and Chief Executive Officer in charge of the
general management of each.
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3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote substantially all
his available working time, ability and attention
to the business of Comm Bancorp and the Bank during the term of this agreement. Except with
the prior written approval of the Boards of Directors of each, 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 Executive engage in any business or commercial activities, duties or
pursuits which compete with the business or commercial activities or either Comm Bancorp or the
Bank nor may the Executive serve as a director or officer or in any other capacity in a company or
financial institution which competes with either Comm Bancorp or the Bank. Passive investments and
personal activities not resulting in material compensation or a conflict of interest with either
Comm Bancorp or the Bank shall not be deemed a breach of the restrictions of this paragraph. With
the prior approval of the Board of Directors of Comm Bancorp, which approval shall not be
unreasonably withheld, the Executive may participate in trade associations, charitable, civic or
similar not-for-profit, philanthropic or eleemosynary organizations, including services as an
officer or a director. Such participation shall not be deemed a breach of this Agreement, but the
total amount of time spent by the Executive in such activities during normal working hours shall be
periodically reviewed by the Board of Directors of Comm Bancorp and the Bank.
4. COMPENSATION.
A. ANNUAL DIRECT SALARY:
1. ANNUAL SALARY: As compensation for services rendered under this Agreement, the
Executive shall be entitled to receive an annual salary of $168,000.00 Dollars per year, payable in
substantially equal bi-monthly installments (or such other more frequent intervals as may be
determined by the Board of Directors as payroll policy for senior executive officers) prorated for
any partial employment period. The annual salary shall be reviewed by the Board of Directors prior
to each calendar year of this Agreement beginning January 1, 2011 and shall be adjusted based on
performance. The increase in annual salary shall be communicated to the Executive on or before
April 1st and shall be effective as of January 1 of each year. In no event shall the annual salary
be decreased.
B. INCENTIVE COMPENSATION. Executive shall receive a yearly bonus as recommended by
the Executive Compensation Committee and Board of Directors.
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5. FRINGE BENEFITS, VACATION, EXPENSES AND PERQUISITES. It is agreed that nothing paid
to the Executive under any of the below-described benefit plans or arrangements shall be deemed to
be in lieu of compensation otherwise payable to the Executive hereunder and shall not be deemed to
be a part of Annual Direct Salary. The Executive shall be entitled to:
A. EMPLOYMENT BENEFIT PLANS. The Executive shall be entitled to participate in and to
receive benefits under all employee benefit plans for which he qualifies(e.g. health care and
disability insurance and 401K retirement plan),provided for other executive level employees of
either Comm Bancorp or the Bank, but it is not the parties intention to create duplicate
entitlements. The Executive may select which plan if more than one plan is available.
B. VACATION AND HOLIDAYS. 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 no less than twenty (20) days in any calendar year (pro-rated 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, personal days and sick days given by the
Bank to its senior executive officers.
C. BUSINESS EXPENSES. During the term of his employment hereunder, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses incurred by him in
performing services hereunder, upon presentation of proper receipts or other documents in
accordance with the then current policy of the Bank.
D. BANKING INDUSTRY FUNCTIONS. The Executive may devote reasonable time to attending
conventions, seminars and meetings sponsored by the Pennsylvania Banking Association, American
Bankers Association and other banking or educational organizations at the expense of the Bank or
Comm Bancorp, as the case may be. Such attendance at conventions will be approved by the Board of
Directors of the Bank.
E. CLUB MEMBERSHIP. The Bank shall provide Executive with application fees, bond costs
and annual dues in connection with his membership in such private clubs, social, civic and
community organizations that the Board of Directors of the Bank may reasonably determine during the
term of employment hereunder.
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F. AUTOMOBILE. The Executive shall be furnished a new automobile, model to be set by
the Board, every three years, with insurance, maintenance, fuel and all fees and costs paid by the
Bank.
G. OTHER PERQUISITES AND BENEFITS. The Executive shall be entitled to receive such
additional perquisites and fringe benefits as the Boards of Directors of either Comm Bancorp or the
Bank reasonably deem appropriate in their sole discretion.
6. INDEMNIFICATION. Comm Bancorp and the Bank agree that their By-Laws shall continue
to provide for indemnification of their directors, officers, employees and agents, to the fullest
extent allowed under Pennsylvania law, including the Executive during the full term of this
Agreement, and shall at all times provide adequate insurance for such purposes.
7. UNAUTHORIZED DISCLOSURE. At no time during the period of his employment hereunder
and thereafter, shall the Executive, without the written consent of the Boards of Directors of Comm
Bancorp or the Bank or a person authorized thereby, knowingly disclose to any person, other than an
employee of either Comm Bancorp or the Bank, as the case may be, 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, any material confidential information obtained by him while in the employ
of either Comm Bancorp or the Bank with respect to any of their services, products, improvements,
formulas, designs or styles, processes, customers, methods of distribution or any business practice
the disclosure of which he knows will be materially damaging to either Comm Bancorp or the Bank;
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 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 Comm Bancorp or the Bank.
8. RESTRICTIVE COVENANTS. The Executive covenants and agrees as follows: the Executive
shall not directly or indirectly, within the marketing area of the Bank (defined as Lackawanna
County, Susquehanna County, Xxxxx County, Wyoming County, and Monroe County, Pennsylvania), or any
future market area of the Bank (defined as an area within 20 miles of any branch office located
outside of those counties, and begun during the Executive’s employment under the terms of this
Agreement), enter into or engage generally in competition with the Bank either as sole proprietor
or as partner or joint venturer, or as a director, officer, shareholder (except as a shareholder of
less than five (5.0%)
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percent 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, during the term of this Agreement
and for a period of five (5) years after the date of termination of his employment hereunder for
any reason delineated under Sections 9B, C, D and E. The Executive agrees that any breach of the
restriction set forth in this paragraph shall result in irreparable injury to the Bank for which it
shall not have 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 competent jurisdiction to be unenforceable in part by reason of its 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.
9. TERMINATION.
A. DEATH. The Executive’s employment hereunder by Comm Bancorp or the Bank shall
terminate upon his death.
B. DISABILITY. The Executive’s employment hereunder shall, at Comm Bancorp’s or the
Bank’s option, terminate if he becomes totally and permanently disabled. The Executive shall be
deemed totally or permanently disabled if he becomes unable to perform a substantial portion of his
duties under this Agreement and a physician mutually selected by Bank and the Executive determines
such inability will continue for a period of one hundred eighty (180) days or more and is likely to
be permanent. The Executive shall be deemed disabled if he receives total disability benefits under
either Comm Bancorp’s or the Bank’s disability insurance plan. Such termination shall be without
prejudice to any right Executive may have to receive benefits under any disability insurance plan
maintained by either Comm Bancorp or the Bank.
C. CAUSE. Either Comm Bancorp or the Bank may terminate the Executive’s employment
hereunder for Cause. For the purposes of this Agreement, either Comm Bancorp, or 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 after
Comm Bancorp or the bank has given the Executive written notice of his failure to perform and the
Executive does not cure such failure within thirty (30) business days of the receipt of such
notice, other than any such failure resulting from the Executive’s incapacity due to physical
or mental illness; or
2. conviction of a felony; or
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3. the willful violation by the Executive of the provisions of Paragraphs 3, 7 or 8 of this
Agreement; or
4. the willful violation of state or federal banking, securities, tax or financial laws or
financial regulations in the operation of Comm Bancorp or the Bank.
The Executive will be notified in writing of the grounds for termination.
Either Comm Bancorp or the Bank may terminate this Agreement without notice upon receipt of a
final, unappealable written directive or order of any governmental body or entity having
jurisdiction over Comm Bancorp or the Bank, as the case may be, requiring termination, disciplinary
action, a fine, or removal of the Executive, as an officer or Director or both of Comm Bancorp or
the Bank. Such termination shall be deemed to be termination for cause.
Termination for cause by either Comm Bancorp or the Bank shall be deemed also to be
termination for cause by the other.
D. HEALTH AND GOOD REASON. 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 (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
specifically contemplated by, Section 2 hereof, (ii) any removal of the Executive from or any
failure to re-elect the Executive to any of the positions indicated in Section 2 hereof, except in
connection with termination of the Executive’s employment for Cause, (iii) failure of either Comm
Bancorp or the Bank, as the case may be, to comply with Section 5 hereof, (iv) any other material
breach by either Comm Bancorp or the Bank of this Agreement,(v) executive decides to retire after
giving Comm Bancorp and the Bank at least 6 months advanced notice in writing or(vi) any Change in
Control (as defined herein).
E. VOLUNTARY RETIREMENT. On or after February 28, 2011, the Executive may retire
from his positions indicated in Section 2 hereof after giving Comm Bancorp and the Bank at least
sixty (60) days notice thereof. The Executive shall be entitled to the post-retirement benefits as
set forth under Section 10 hereof. Should Executive terminate employment for reasons set forth in
Section 9D, notice thereof shall be given to Comm Bancorp or the Bank prior to thereto and Comm
Bancorp or the Bank shall have thirty (30) days to cure such condition, if applicable, which
precipitated Executive’s
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desire to terminate. These reasons set forth in said notice to Comm Bancorp or the Bank shall
thereby be established and fixed as “good reason” as the same is defined within this contract for
any future arbitration or court proceeding following termination.
10. PAYMENTS UPON TERMINATION/NON-EXTENSION.
A. DEATH OR FOR CAUSE. If the Executive’s employment shall be terminated because of
death or for Cause, Comm Bancorp and 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 in the case of
termination because of death, any other amounts owing to Executive at the time of termination (e.g.
reimbursements and the value of his accrued but unused fringe benefits) and death payments
otherwise thereafter coming due pursuant to Paragraph 5A hereof and neither Comm Bancorp nor the
Bank shall have further obligations to the Executive under this Agreement, except Executive shall
receive all other vested employee benefits to which Executive may be entitled when due and payable.
B. TERMINATION DUE TO NON-EXTENSION, DISABILITY, GOOD REASON OR VOLUNTARY RETIREMENT.
If Comm Bancorp or the Bank terminates this Agreement
because of non-extension or the disability of the Executive, or, if the Executive terminates this
Agreement because of Good Reason or voluntary retirement, then Comm Bancorp or the Bank, as the
case may be, shall pay to Executive, for sixty (60) consecutive months or until his death,
whichever occurs first (the “Post-Retirement Period”),the sum of $14,000 per month payable on the
last bank business day of each month in a lump sum as a post-retirement benefit and shall also pay
premiums on a commercially-reasonable comprehensible medical insurance plan with a then
commercially-reasonable deductible or retention of risk provision during the Post-Retirement
Period. The Executive shall also be entitled to the use of his current executive office suite at
the main corporate office of Comm Bancorp and the Bank and the provision of secretarial support for
a period of twelve (12) months after termination of employment.
C. PAYMENT LIMITATION. If the Executive is a “specified employee” (as such phrase is
defined in Treas. Reg. §1.409A-1(i) (“Specified Employee”) on the termination date of employment,
(a) the Executive shall receive payment of any lump sum amounts described in this Section 10 on the
first day of the seventh month following such termination date, and (b) to the extent an annuity is
payable to Executive under Section 10, or a benefit is scheduled to commence or be paid pursuant to
Section 10, the commencement date of such benefit shall be deferred until the first day of the
seventh month following such termination date of employment. The payments to which the Executive
would otherwise be entitled during
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the first six months following such termination date shall be accumulated and paid to the
Executive on the first business day of such seventh month and such amount shall be credited with
interest or earnings as provided for under the relevant underlying plan. If there is no underlying
plan or if the underlying plan does not provide for interest or earnings on deferral amounts, then
the amount deferred under this Section 10C shall be credited with interest at the applicable
federal rate determined under Section 1274 of the Internal Revenue Code, then in effect. If the
Executive is not a Specified Employee on such termination date, (i) the Executive shall receive
payment of the lump sum amounts described in Section 10 on the 60th day following such
termination date and (ii) the annuity payments provided to the Executive under Section 10 shall
commence on the 60th day following such termination date.
11. DEFINITION OF CHANGE OF CONTROL. A Change of Control shall be deemed to have
occurred when (a) substantially all of Comm Bancorp’s or the Bank’s assets and/or operations are
sold or otherwise disposed of; (b) any person becomes the beneficial owner directly or indirectly,
of securities of Comm Bancorp or the Bank with a combined voting power in sufficient amount to gain
majority control of either Board of Directors; or (c) at any time during any twenty-four (24)
consecutive months (commencing on March 1, 2010)
when a majority of the members of either Comm Bancorp’s and the Bank’s Board of Directors are
individuals who were not members of the respective Board of Directors at the beginning of such
period, unless such changes result from death or voluntary or historically-consistent retirement.
For purposes of this paragraph, “person and beneficial owner” shall have the meanings ascribed to
them pursuant to the Securities Exchange Act of 1934, as amended and the regulations promulgated
pursuant thereto. This Paragraph shall be liberally construed in favor of the Executive.
12. WORK MADE FOR HIRE. Any work performed by the Executive under this
Agreement should be considered a “Work Made for Hire”, as the phrase is defined by the U.S. patent
laws and shall be owned by and for the express benefit of Comm Bancorp, the Bank and their
subsidiaries and affiliates. In the event it should be established that such work does not qualify
as a Work Made for Hire, the Executive agrees to and does hereby assign to Comm Bancorp, the Bank,
and their affiliates and subsidiaries, all of his rights, title, and/or interest in such work
product, including, but not limited to, all copyrights, patents, trademarks, and propriety rights.
Comm Bancorp and the Bank shall be entitled to seek injunctive action to enforce this Section 12.
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13. 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:
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Xxxxxxx X. Xxxxxx, Xx. XX 0 Xxx 0000 Xxxxxxxxxx, XX. 00000 |
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with a required copy to:
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Xxxx Xxxxxxx, Esquire Xxxxxxx & Xxxxx P.C. 000 Xxxxxx Xxxxxx Xxxxxxxx, XX. 00000 |
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If to Comm Bancorp:
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Comm Bancorp, Inc. 000 Xxxxx Xxxxx Xxxxxx Xxxxxx Xxxxxx, XX 00000 |
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If to Bank:
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Community Bank and Trust Company 000 Xxxxx Xxxxx Xxxxxx Xxxxxx Xxxxxx, XX 00000 |
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with a required copy to:
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Xxxx X. Xxxxx, Esquire Saidis, Flower & Xxxxxxx 0000 Xxxxxx Xxxxxx Xxxx Xxxx, XX 00000 |
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.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon the
Executive, Comm Bancorp and the Bank and their respective heirs, personal representatives,
successors and assigns.
15. ARBITRATION. Comm Bancorp, the Bank and the Executive recognize that in the
event a dispute should arise between them concerning the interpretation or implementation of this
Agreement, lengthy and expensive litigation will not afford a practical resolution of the issues
within a reasonable period of time. Consequently, each party agrees that all disputes,
disagreements and questions of interpretation concerning this Agreement (except for any enforcement
sought with respect to Sections 7, 8, or 12 of this Agreement which may be litigated in court,
including an action for injunction or other relief) are to be submitted for resolution, in
Scranton, Pennsylvania, to the American Arbitration Association
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(the “Association”) in accordance with the Association’s National Rules for the Resolution of
Employment Disputes or other applicable rules then in effect (“Rules”). Comm Bancorp, the Bank or
the Executive may initiate an arbitration proceeding at any time by giving notice to the other in
accordance with the Rules. Comm Bancorp, the Bank and the Executive may, as a matter of right,
mutually agree on the appointment of a particular arbitrator from the Associations’ pool. The
arbitrator shall not be bound by the rules of evidence and procedure of the courts of the
Commonwealth of Pennsylvania, but shall be bound by the substantive law applicable to this
Agreement. The decision of the arbitrator, absent fraud, duress, incompetence or gross and obvious
error of fact, shall be final and binding upon the parties and shall be enforceable in courts of
proper jurisdiction. Following written notice of a request for arbitration, Comm Bancorp, the Bank
and the Executive shall be entitled to an injunction restraining all further proceedings in any
pending or subsequently filed litigation concerning this Agreement, except as otherwise provided
herein or any enforcement sought with respect to Sections 7, 8 or 12 of this Agreement, including
an action for injunction or other relief. All costs of the arbitration shall be borne in equal
halves — one-half by Comm Bancorp and the Bank and the other half by the Executive.
16. VALIDITY. The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.
17. ENTIRE AGREEMENT. This instrument contains the entire agreement of the parties
relating to the subject matter hereto and may not be waived, changed, modified, extended or
discharged orally but only by agreement in writing, consented to in a writing signed
by the parties.
18. GOVERNING LAW. This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania and the
United States of America.
19. RIGHTS AND REMEDIES; NO WAIVER. No course of action between Comm Bancorp, the Bank
and the Executive and no delay or omission of Comm Bancorp, the Bank or the Executive to exercise
any right or power given under this Agreement shall; (A) impair the subsequent exercise of any
right or power, or, (B) be construed to be a waiver of any default or any acquiescence in or
consent to the curing of any default or of any other right or power that shall have arisen. Every
power and remedy granted by law and by this Agreement to any party may be exercised as may be
deemed expedient.
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All such rights and powers shall be cumulative to the fullest extent permitted by law.
IN WITNESS WHEREOF, the parties have signed and sealed this Agreement the day and the year
first above written.
| COMM BANCORP, INC. |
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| By: | /s/ Xxxx X. Xxxxxx | |||
| XXXX X. XXXXXX, Secretary of the | ||||
| Board of Directors | ||||
| COMMUNITY BANK AND TRUST COMPANY |
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| By: | /s/ Xxxx X. Xxxxxx | |||
| XXXX X. XXXXXX, Secretary of the | ||||
| Board of Directors | ||||
| Executive |
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| By: | /s/ Xxxxxxx X. Xxxxxx, Xx. | |||
| Xxxxxxx X. Xxxxxx, Xx. | ||||
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