EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made effective on the 1st day of January, 2001 (the
"Effective Date" of the Agreement) between AMERICAN BANK, 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, a Pennsylvania banking institution (the
"Bank") and XXXX X. XXXXXX, residing at 0000 Xxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000, an adult individual (the "Executive").
WHEREAS, the Bank desires to employ the Executive as its President and
Chief Executive Officer under the terms and conditions set forth herein; and
WHEREAS, the Executive desires to serve the Bank in an executive capacity
under the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound hereby, the parties agree as
follows:
1. TERMS OF EMPLOYMENT. The Bank hereby employs the Executive and the
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Executive hereby accepts employment with the Bank for a period of two and
ninety-nine hundredths (2.99) years.
Provided the Agreement is not terminated as provided herein in paragraph
11, the term shall be extended by one calendar day for each expired calendar day
after the Effective Date.
2. POSITION AND DUTIES. The Executive shall serve as the President and
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Chief Executive Officer and shall have such power and duties as may be from time
to time prescribed by the Board of Directors, provided that such duties are
consistent with the Executive's position as President and Chief Executive
Officer.
3. ENGAGEMENT IN OTHER EMPLOYMENT Under no circumstances shall the
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Executive serve as a director or employee in another business without the prior
approval of the Board of Directors. The terms provided in this paragraph 3 shall
not apply to organizations the Executive was involved in prior to the Effective
Date of the Agreement.
4. COMPENSATION.
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(a) ANNUAL DIRECT SALARY: As compensation for services rendered the
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Bank under this Agreement, the Executive shall be entitled to receive from
the Bank an annual direct salary of One Hundred Seventy-five Thousand
Dollars ($175,000) during the first year of this Agreement and an annual
direct salary of not less than Two Hundred Thousand Dollars ($200,000)
during the second year of this Agreement (the "Annual Direct Salary") less
withholdings required by law payable in substantially equal monthly
installments (or such other more frequent intervals as may be determined by
the Board of Directors of the Bank as payroll policy for senior executive
officers) prorated for any partial employment period. During any additional
year or extension of this Agreement, Executive's performance may be
reviewed by the Board and Executive's salary might be increased at the
discretion of the Board of Directors.
b) BONUS OR OTHER BENEFITS. The Board of Directors through its
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Compensation Committee in its sole discretion may provide for payment of a
yearly bonus or other benefits to the Executive in such an amount as it may
deem appropriate to provide incentive to the Executive and to reward the
Executive for his performance.
5. FRINGE BENEFITS, VACATION, EXPENSES, AND PERQUISITES.
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(a) EMPLOYEE BENEFIT PLANS. The Executive shall be entitled to
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participate in or receive benefits under all Bank employee benefit plans
when such plans are established; including but not limited to any
profit-sharing plan, savings plan, medical or health-and-accident plan or
arrangement made available by the Bank to its employees, subject to and on
a basis consistent with terms, conditions and overall administration of
such plans and arrangements.
(b) VACATION AND HOLIDAYS. The Executive shall be entitled to the
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number of paid vacation days in each calendar year as outlined by the Banks
Employee Handbook.
(c) BUSINESS EXPENSES. During the term of his employment hereunder,
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the Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him (in accordance with the policies and
procedures established by the Board of Directors of the Bank for its senior
executive officers) in performing services hereunder, provided that the
Executive properly accounts therefor in accordance with Bank policy.
(d) AUTO. The Executive shall be entitled to the use of a
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Bank-provided automobile. It is contemplated the Bank shall provide the
Executive with a leased automobile and reimbursement for ordinary expenses
associated with the use of the automobile, such as maintenance and
insurance.
6. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Bank shall obtain such
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insurance coverage for the Executive under an insurance policy covering officers
and directors of the Bank against lawsuits, arbitrations or other legal or
regulatory proceedings; however, nothing herein shall be construed to require
the Bank to obtain such insurance, if the Board of Directors of the Bank
determine that such coverage cannot be obtained at a commercially reasonable
price.
7. NON-DISCLOSURE/TRADE SECRETS. During the employment of Executive, or at
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any later time, the Executive shall not, without the written consent of the
Board of Directors of the Bank or a person authorized thereby, disclose to any
person, other than an employee of the Bank or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of the Bank, any confidential
information obtained by him while in the employ of the Bank with respect to any
of the Bank's services, products, improvements, formulas, designs or styles,
processes, customers, methods of distribution or any business practices the
disclosure of which could be or will be materially damaging to 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 the Bank. This provision shall survive
termination of Executive's employment under this Agreement and/or termination of
this Agreement.
8. RESTRICTIVE COVENANT. The Executive covenants and agrees as follows:
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a) the Executive shall not directly or indirectly, enter into or engage
generally in direct or indirect competition with the Bank or any subsidiary in
the business of internet banking, either as an individual on his own or as a
partner or joint venturer, or as a director, officer, shareholder, employee,
agent, independent contractor, lessor or creditor of or for any person, for a
period of two (2) years after the date of termination of his employment, whether
voluntary or in the event Executive is terminated for
Cause; b) the Executive shall not directly or indirectly, within the marketing
area of the Bank (defined as an area within a thirty (30) mile radius of the
Bank's main office or any branch office), enter into or engage generally in
direct or indirect competition with the Bank or any subsidiary in the business
of commercial banking, either as an individual on his own or as a partner or
joint venturer, or as a director, officer, shareholder, employee, agent,
independent contractor, lessor or creditor of or for any person, for a period of
one (1) year after the date of termination of his employment, whether voluntary
or involuntary. The existence of any claim or cause of action of the Executive
against the Bank, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Bank of this covenant. The
Executive agrees that the restrictions set forth in this Agreement do not
unreasonably interfere with his ability to obtain employment in his chosen
field. The Executive agrees that any breach of the restrictions set forth in
this Paragraph will result in irreparable injury to the Bank for which it shall
have no adequate remedy at law and the Bank shall be entitled to injunctive
relief in order to enforce the provisions hereof. In the event that this
Paragraph shall be determined by any court of 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.
9. NON-SOLICITATION. Executive covenants and agrees that while employed by
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the Bank and for a period of one (1) year after the termination of Executive's
employment, either voluntarily or involuntarily, Executive shall not, either
directly or indirectly in any capacity whatsoever, (a) obtain, solicit, divert,
appeal to, attempt to obtain, attempt to solicit, attempt to divert, or attempt
to appeal to any customers, clients or referral services of the Bank to divert
their business from the Bank; (b) solicit any person who was employed by the
Bank to leave the employ of the
Bank. For purposes of this covenant, "customers, clients, and referral sources"
shall include all persons who are or were customers, clients or referral sources
of the Bank at any time during the employment of Executive by the Bank.
The existence of any claim by Executive, whether predicated upon this
Agreement or otherwise, shall not constitute defense to the Bank's enforcement
of or attempts to enforce this provision.
10. NOTIFICATION OF NON-DISCLOSURE/TRADE SECRET, RESTRICTIVE COVENANT AND
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NON-SOLICITATION PROVISIONS. During his employment, and a period of one (1) year
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following termination of his employment with the Bank, Executive agrees to
inform any prospective employer of existence of the Non-Disclosure/Trade Secret,
Restrictive Covenant and Non-Solicitation provisions of this Agreement.
11. TERMINATION.
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(a) The Executive's employment hereunder shall terminate upon his
death.
(b) If the Executive becomes disabled (as certified by a licensed
physician chosen by the Bank and the Executive or in the event that the
Bank and the Executive cannot agree upon a physician, each shall designate
a licensed physician, and the licensed physician so designed shall appoint
a third physician whose decision shall be binding upon the parties) because
of sickness, physical or mental disability, or any other reason, and is
unable to substantially perform or complete his duties as outlined in his
job description and under this Agreement for a period of ninety (90)
consecutive days, the Bank shall have the option to terminate this
Agreement by giving written notice of termination to the Executive. Such
termination shall be without prejudice to any right the Executive may have
under the disability insurance program maintained by the Bank.
(c) The Bank may terminate the Executive's employment hereunder for
Cause if the Executive fails to correct, within 30 days of receipt by
Executive of written notification, the issues relating to Cause. For the
purposes of this agreement, the Bank shall have "Cause" to terminate the
Executive's employment hereunder only upon (1) the failure by the Executive
to substantially perform his duties hereunder, other than any such failure
resulting from the Executive's incapacity due to physical or mental
illness, or (2) the willful engaging by the Executive in conduct materially
injurious to the Bank, or (3) the willful violation by the Executive of the
provisions of Paragraphs 3, 7 or 9 hereof after notice from the Bank and a
failure to cure such violation within thirty (30) days of said notice, or
if said violation cannot be cured within thirty (30) days, within a
reasonable time thereafter if the Executive is diligently attempting to
cure the violation, or (4) the gross negligence of the Executive in the
performance of his duties or (5) receipt by the Bank of a recommendation of
any governmental body or entity having jurisdiction over the Bank requiring
or suggesting termination or removal of the Executive as President and
Chief Executive Officer or receipt of a written directive or order of any
governmental body or entity having jurisdiction over the Bank requiring
termination or removal of the Executive as President and Chief Executive
Officer.
(d) The Executive may terminate his employment hereunder, (1) if his
health should become impaired to an extent that his treating physician
states that termination of employment is required because continued
performance of
his duties hereunder are hazardous to his physical or mental health or his
life, or (2) for Good Reason. The term "Good Reason" shall only mean: (i)
any assignment to the Executive, without his consent, of any duties other
than those contemplated by, or any limitation of the powers of the
Executive not contemplated by his job description and/or Paragraph 2
hereof, or (ii) without Executives written approval, a reduction of the
Executive's rate of compensation as provided in Paragraph 4 hereof, or
(iii) failure of the Bank to comply with Paragraph 5 hereof, or (iv) any
other material breach by the Bank of this Agreement, provided that the
Executive shall have given the Board of Directors thirty (30) days written
notice of such breach and such breach shall not have been cured within such
thirty (30) day period after receipt of notice, or (v) any Change of
Control (as defined herein).
12. PAYMENTS UPON TERMINATION.
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(a) If the Executive's employment shall be terminated because of his
death (paragraph 11a), disability (11b), or for Cause (11c), the Bank shall
pay the Executive his full Annual Direct Salary through the date of
termination at the rate in effect at the time of termination and any other
amounts owing to the Executive at the date of termination, and the Bank
shall have no further obligations to the Executive under this Agreement.
(b) If the Executive's employment is terminated by the Bank (other
than pursuant to Paragraphs 11(a), 11(b), or 11(c) hereof), or if the
Executive shall terminate his employment for Good Reason, then the Bank
shall pay the Executive his full Annual Direct Salary from the date of
termination through the last day of the term of this Agreement. The Bank
shall maintain in full force and effect, for the continued benefit of the
Executive for the full term of this Agreement, all employee insurance
policies, benefit plans and programs to
which the Executive was entitled prior to the date of termination, if the
Executive's continued participation is possible under the general terms and
provisions of such insurance policies, plans and programs. In the event
that the Executive's participation in any such policy, plan or program is
prohibited by the terms of the policy, plan or program, the Executive shall
be entitled to receive an amount equal to the annual contribution,
payments, credits or allocations made by the Bank to him, to his account or
on his behalf under any such plans and programs from which his continued
participation is prohibited.
13. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this
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Agreement by either the Bank or the Executive, each hereby waive to the fullest
extent permitted by law the right to assert any claim against the other for
punitive or exemplary damages. Furthermore, Executive hereby waives any and all
rights to assert claims or recover damages in an amount in excess of that set
forth in Paragraph 12(b).
14. DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, the
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term "Change of Control" shall mean: A change in control of the Bank of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A and any successor rule or regulation promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act") if Bank was subject to the
Exchange Act reporting requirements; provided that, without limiting the
foregoing, such a change in control shall be deemed to have occurred if (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
subsequent to the Effective Date of this Agreement, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank representing twenty-five percent (25%) or
more of the combined voting power of the
Bank's then outstanding securities, or (b) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors of the Bank cease for any reason
to constitute at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period.
15. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this
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Agreement, the date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, become the beneficial owner(s) of
twenty-five percent (25%) or more of the Bank's voting securities, or
(b) the date of the transfer of all or substantially all of the Bank's
assets, or
(c) the date on which a merger, consolidation, combination is
consummated, as applicable, or
(d) the date on which individuals who formerly constituted a majority
of the Board of Directors of the Bank ceased to be a majority, provided
however that subsections (a) and (d) shall not apply if such events are the
result of additional shares being issued as approved by the Board of
Directors.
16. NOTICE. For the purposes of this Agreement, notices and all other
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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: Xxxx X. Xxxxxx
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
If to the Bank: Xxxxx X. Xxxxxx
AMERICAN BANK
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
17. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
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upon the Executive, his personal representatives, heirs or assigns and the Bank
and any of successors or assigns of the Bank.
18. SEVERABILITY. If any provision of this Agreement is declared
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unenforceable for any reason, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect.
19. AMENDMENT. This Agreement may be amended or cancelled only by mutual
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agreement of the parties in writing.
20. ATTORNEY'S FEES AND COSTS. If any action at law is necessary to enforce
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or interpret the terms of this Agreement, the Bank shall reimburse the Executive
for reasonable attorney's fees, costs, or disbursements.
21. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. If the Executive dies prior to
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the expiration of the term of employment, any monies that may
be due him from the Bank under this Agreement as of the date of death shall be
paid to the executor, administrator, or other personal representative of the
Executive's estate or the beneficiaries or legatees entitled to such monies
under the decedent Executive's last will or applicable testate laws.
22. LAW GOVERNING. This Agreement shall be governed by and construed in
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accordance with the laws of the Commonwealth of Pennsylvania. The parties agree
in the event of a dispute under this Agreement to submit to the jurisdiction of
the Court of Common Pleas of Lehigh County and that venue is proper thereunder.
23. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements,
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either oral or in writing, between the parties with respect to the employment of
the Executive by the Bank, and this Agreement contains all the covenants and
agreements between the parties with respect to the employment.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed in their respective names
and, in the case of the Bank, by its authorized representatives the day and year
above mentioned.
ATTEST: AMERICAN BANK
Xxxxxxxxx X. Xxxxxx \s\ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Chairman
Compensation Committee
WITNESS:
\s\ Xxxxx Xxxxxxxxxxx \s\ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
President/Chief Executive Officer