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EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of the 22nd day of July 1999, among XXXX XXXXXX
FINANCIAL CORP., ("Corporation") a Pennsylvania business corporation having a
place of business at 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
XXXX XXXXXX BANK & TRUST COMPANY ("Bank") a state chartered bank and trust
company having a place of business at 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000, and XXXXXXX X. XXXX ("Executive"), an individual residing at
000 Xxxxxxxx Xxxx, XxXxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
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WHEREAS, Corporation is a registered bank holding company;
WHEREAS, Corporation, CSB Bank and Clearfield Bank & Trust Company have
entered into an Agreement and Plan of Reorganization dated December 31, 1998
(the "Reorganization Agreement");
WHEREAS, pursuant to the Reorganization Agreement, Bank will be a
wholly-owned subsidiary of Corporation on the Effective Date as set forth in
Section 11.2 of the Reorganization Agreement;
WHEREAS, Corporation and Bank desire to employ Executive to serve in the
capacity of Executive Vice President of the Corporation and Bank under the terms
and conditions set forth herein;
WHEREAS, Executive desires to accept employment with Corporation and Bank
on the terms and conditions set forth herein.
AGREEMENT:
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NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment. Corporation and Bank hereby employ Executive and Executive
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hereby accepts employment with Corporation and Bank, under the terms and
conditions set forth in this Agreement.
2. Duties of Employee. Executive shall perform and discharge well and
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faithfully such duties as an executive officer of Corporation and Bank as
may be assigned to Executive from time to time by the Board of Directors of
Corporation and Bank. Executive shall be employed as Executive Vice
President of Corporation and Bank, and shall hold such other titles as may
be given to him from time to time by the Board of Directors of Corporation
and Bank. Executive shall devote his full time, attention and energies to
the business of Corporation and Bank during the Employment Period (as
defined in Section 3 of this Agreement); provided, however, that this
Section 2 shall not be construed as preventing Executive from (a) engaging
in activities incident or necessary to personal investments so long as it
does not exceed 5% of the outstanding shares of any publicly held company,
(b) acting as a member of the Board of Directors of any other corporation
or as a member of the Board of Trustees
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of any other organization, with the prior approval of the Board of
Directors of Corporation and Bank, or (c) being involved in any other
activity with the prior approval of the Board of Directors of Corporation
and Bank. The Executive shall not engage in any business or commercial
activities, duties or pursuits which compete with the business or
commercial activities of Corporation or Bank, nor may the Executive serve
as a director or officer or in any other capacity in a company which
competes with Corporation or Bank.
3. Term of Agreement.
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(a) This Agreement shall be for a three (3) year period (the "Employment
Period") beginning on the Effective Date as set forth in Section 11.2
of the Reorganization Agreement, and if not previously terminated
pursuant to the terms of this Agreement, the Employment Period shall
end three (3) years later.
(b) Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically for Cause (as defined herein)
upon written notice from the Board of Directors of each of Corporation
and Bank to Executive. As used in this Agreement, "Cause" shall mean
any of the following:
(i) Executive's conviction of or plea of guilty or nolo contendere
to a felony, a crime of falsehood or a crime involving moral
turpitude, or the actual incarceration of Executive for a
period of thirty (30) consecutive days or more;
(ii) Executive's failure to follow the good faith lawful
instructions of the Board of Directors of Corporation or Bank
with respect to their operations following written notice of
such instructions; or
(iii) Executive's failure to substantially perform Executive's duties
to Corporation or Bank, other than a failure resulting from
Executive's incapacity because of physical or mental illness, as
provided in subsection (d) of this Section 3, which failure
results in injury to Corporation or Bank, monetarily or
otherwise.
(iv) Executive's intentional violation of the provisions of this
Agreement;
(v) dishonesty or gross negligence of the Executive in the
performance of his duties;
(vi) conduct on the part of the Executive which brings public
discredit to Corporation or Bank;
(vii) Executive's breach of fiduciary duty involving personal profit;
or
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(viii) Executive's violation of any law, rule or regulation governing
banks or bank officers or any final cease and desist order
issued by a bank regulatory authority.
If this Agreement is terminated for Cause, all of Executive's rights
under this Agreement shall cease as of the effective date of such
termination.
(c) Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically upon Executive's voluntary
termination of employment (other than in accordance with Section 5 of
this Agreement) for Good Reason. The term "Good Reason" shall mean (i)
the assignment of duties and responsibilities inconsistent with
Executive's status as Executive Vice President of Corporation and
Bank, (ii) a reduction in salary or significant reduction in benefits,
except in cases of a national financial depression or emergency when
such reduction has been implemented by the Board of Directors for
Corporation and Bank's senior management, or (iii) a reassignment
which requires Executive to move his principal residence more than one
hundred (100) miles from Corporation and Bank's principal executive
office immediately prior to this Agreement. If such termination occurs
for Good Reason, then Bank shall pay Executive an amount equal to the
greater of the remaining balance of the Agreed Compensation otherwise
due to the Executive for the remainder of the then existing Employment
Period or 1.0 times the Executive's Agreed Compensation as defined in
subsection (g) of Section 3, which amount shall be payable in twelve
(12) equal monthly installments and shall be subject to federal, state
and local tax withholdings. In addition, for a period of one (1) year
from the date of termination of employment, or until Executive secures
substantially similar benefits through other employment, whichever
shall first occur, Executive shall receive a continuation of all life,
disability, medical insurance and other normal health and welfare
benefits in effect with respect to Executive during the two (2) years
prior to his termination of employment, or, if Bank cannot provide
such benefits because Executive is no longer an employee, a dollar
amount equal to the cost to Executive of obtaining such benefits (or
substantially similar benefits). If permitted under the terms of the
plan, Executive shall receive the additional retirement benefits to
which he would have been entitled had his employment continued through
the then remaining term of the Agreement. However, in the event the
payment described herein, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with his
termination of employment, would result in the imposition of an excise
tax under Code Section 4999, such payments shall be retroactively (if
necessary) reduced to the extent necessary to avoid such excise tax
imposition. Upon written notice to Executive, together with
calculations of Corporation's independent auditors, Executive shall
remit to Corporation the amount of the reduction plus such interest as
may be necessary to avoid the imposition of such excise tax.
Notwithstanding the foregoing or any other provision of this contract
to the contrary, if any portion of the amount herein payable to the
Executive is determined to be non-deductible pursuant to the
regulations promulgated under Section 280G of the Internal Revenue
Code of 1986, as amended
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(the "Code"), then Corporation shall be required only to pay to
Executive the amount determined to be deductible under Section 280G.
At the option of the Executive, exercisable by the Executive within
ninety (90) days after the occurrence of the event constituting "Good
Reason," the Executive may resign from employment under this Agreement
by a notice in writing (the "Notice of Termination") delivered to
Corporation and Bank and the provisions of this Section 3(c) hereof
shall thereupon apply.
(d) Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically upon Executive's Disability
and Executive's rights under this Agreement shall cease as of the date
of such termination; provided, however, that Executive shall
nevertheless be entitled to receive an amount equal to and no greater
than 70% of the Executive's Agreed Compensation as defined in
subsection (g) of this Section 3, less amounts payable under any
disability plan of Corporation and Bank, until the earliest of (i)
Executive's return to employment, (ii) his attainment of age 65, (iii)
his death, or (iv) the end of the then existing Employment Period.
Executive's Disability rights under this Agreement are not intended to
preclude Executive from securing benefits under any other disability
plan in effect from time to time. However, the obligation of
Corporation and Bank under this Agreement can be satisfied through the
receipt of disability benefits by Executive under any other disability
plan that may be in effect from time to time. In addition, Executive
shall receive for such period a continuation of all life, disability,
medical insurance and other normal health and welfare benefits in
effect with respect to Executive during the two (2) years prior to his
disability, or, if Corporation and Bank cannot provide such benefits
because Executive is no longer an employee, a dollar amount equal to
the cost to Executive of obtaining such benefits (or substantially
similar benefits). For purposes of this Agreement, the Executive shall
have a Disability if, as a result of physical or mental injury or
impairment, Executive is unable to perform all of the essential job
functions of his position on a full time basis with or without a
reasonable accommodation and without posting a direct threat to
himself and others, for a period of ninety (90) days.
(e) Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically upon Executive's death and
Executive's rights under this Agreement shall cease as of the date of
such termination.
(f) Executive agrees that in the event his employment under this Agreement
is terminated, Executive shall resign as a director of Corporation and
Bank, or any affiliate or subsidiary thereof, if he is then serving as
a director of any of such entities.
(g) The term "Agreed Compensation" shall equal the Executive's highest
Annual Base Salary under the Agreement.
4. Employment Period Compensation.
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(a) Annual Base Salary. For services performed by Executive under this
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Agreement, Corporation or Bank shall pay Executive an Annual Base
Salary during the Employment Period at the rate of $101,004 per year,
minus applicable withholdings and deductions, payable at the same
times as salaries are payable to other executive employees of
Corporation or Bank. In no event will the total annual compensation to
Executive be less than the total annual compensation received by
Executive for the 12 month period prior to the effective date of this
Agreement. Corporation or Bank may, from time to time, increase
Executive's Annual Base Salary, and any and all such increases shall
be deemed to constitute amendments to this Section 4(a) to reflect the
increased amounts, effective as of the date established for such
increases by the Board of Directors of Corporation or Bank or any
committee of such Board in the resolutions authorizing such increases.
(b) Bonus. For services performed by Executive under this Agreement,
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Corporation or Bank may, from time to time, pay a bonus or bonuses to
Executive as Corporation or Bank, in their sole discretion, deem
appropriate. The payment of any such bonuses shall not reduce or
otherwise affect any other obligation of Corporation or Bank to
Executive provided for in this Agreement.
(c) Vacations. During the term of this Agreement, Executive shall be
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entitled to paid annual vacation in accordance with the policies as
established from time to time by the Boards of Directors of
Corporation and Bank. However, Executive shall not be entitled to
receive any additional compensation from Corporation and Bank for
failure to take a vacation unless an emergency work situation arises
where Executive is required to work in lieu of a vacation in order to
meet the Corporation's or Bank's needs. Executive shall not be able to
accumulate unused vacation time from one year to the next, except to
the extent authorized by the Boards of Directors of Corporation and
Bank.
(d) Employee Benefit Plans. During the term of this Agreement, Executive
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shall be entitled to participate in or receive the benefits of any
employee benefit plan currently in effect at Corporation or Bank,
subject to the terms of said plan, until such time that the Boards of
Directors of Corporation and Bank authorize a change in such benefits.
(e) Business Expenses. During the term of this Agreement, Executive shall
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be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him, which are properly accounted for, in
accordance with the policies and procedures established by the Boards
of Directors of Corporation and Bank for their executive officers.
5. Termination of Employment Following Change in Control.
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(a) If a Change in Control (as defined in Section 5(b) of this Agreement) shall
occur after the effective date of the merger, and if thereafter at any time
during the term of this Agreement there shall be:
(i) any involuntary termination of Executive's employment (other than for
the reasons set forth in Section 3(b), 3(d), or 3(e) of this
Agreement);
(ii) any reduction in Executive's title, responsibilities, including
reporting responsibilities, or authority, including such title,
responsibilities or authority as such may be increased from time to
time during the term of this Agreement;
(iii) the assignment to Executive of duties inconsistent with Executive's
office on the date of the Change in Control or as the same may be
increased from time to time after the Change in Control;
(iv) any reassignment of Executive to a location greater than one hundred
(100) miles from the location of Executive's office on the date of the
Change in Control;
(v) any reduction in Executive's Annual Base Salary in effect on the date
of the Change in Control or as the same may be increased from time to
time after the Change in Control;
(vi) any failure to provide Executive with benefits at least as favorable
as those enjoyed by Executive under any of Corporation or Bank's
retirement or pension, life insurance, medical, health and accident,
disability or other employee plans in which Executive participated at
the time of the Change in Control, or the taking of any action that
would materially reduce any of such benefits in effect at the time of
the Change in Control;
(vii) any requirement that Executive travel in performance of his duties on
behalf of Corporation or Bank for a significantly greater period of
time during any year than was required of Executive during the year
preceding the year in which the Change in Control occurred; or
(viii) any sustained pattern of interruption or disruption of Executive for
matters substantially unrelated to Executive's discharge of
Executive's duties on behalf of Corporation and Bank.
then, at the option of Executive, exercisable by Executive within one
hundred twenty (120) days of the occurrence of any of the foregoing events,
Executive may resign from employment with Bank (or, if involuntarily
terminated, give notice of intention to collect benefits under this
Agreement) by delivering a notice in writing (the "Notice of Termination")
to Corporation and Bank and the provisions of Section 6 of this Agreement
shall apply.
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(b) As used in this Agreement, "Change in Control" shall mean the
occurrence of any of the following:
(i) (A) a merger, consolidation or division involving Corporation,
(B) a sale, exchange, transfer or other disposition of
substantially all of the assets of Corporation, or (C) a purchase
by Corporation of substantially all of the assets of another
entity, unless (y) such merger, consolidation, division, sale,
exchange, transfer, purchase or disposition is approved in
advance by seventy percent (70%) or more of the members of the
Board of Directors of Corporation who are not interested in the
transaction and (z) a majority of the members of the Board of
Directors of the legal entity resulting from or existing after
any such transaction and of the Board of Directors of such
entity's parent corporation, if any, are former members of the
Board of Directors of Corporation; or
(ii) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act")), other
than Corporation or Bank or any "person" who on the date hereof
is a director or officer of Corporation or Bank is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Corporation or
Bank representing twenty-five (25%) percent or more of the
combined voting power of Corporation or Bank's then outstanding
securities, or
(iii) during any period of two (2) consecutive years during the term
of Executive's employment under this Agreement, individuals who
at the beginning of such period constitute the Board of Directors
of Corporation or 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; or
(iv) any other change in control of Corporation similar in effect to
any of the foregoing.
6. Rights in Event of Termination of Employment Following Change in Control.
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(a) In the event that Executive delivers a Notice of Termination (as
defined in Section 5(a) of this Agreement) to Corporation and Bank,
Executive shall be absolutely entitled to receive the compensation and
benefits set forth below:
If, at the time of termination of Executive's employment, a "Change in
Control" (as defined in Section 5(b) of this Agreement) has also
occurred, Bank shall pay Executive an amount equal to and no greater
than 2.99 times the Executive's Agreed Compensation as defined in
subsection (g) of Section 3, minus applicable taxes and withholdings,
which shall be payable in thirty-six (36) equal monthly installments.
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In addition, for a period of three (3) years from the date of
termination of employment, or until Executive secures substantially
similar benefits through other employment, whichever shall first
occur, Executive shall receive a continuation of all life, disability,
medical insurance and other normal health and welfare benefits in
effect with respect to Executive during the two (2) years prior to his
termination of employment, or, if Bank cannot provide such benefits
because Executive is no longer an employee, a dollar amount equal to
the cost to Executive of obtaining such benefits (or substantially
similar benefits). If permitted under the terms of the plan, Executive
shall receive additional retirement benefits to which he would have
been entitled had his employment continued through the then remaining
term of the Agreement. However, in the event the payment described
herein, when added to all other amounts or benefits provided to or on
behalf of the Executive in connection with his termination of
employment, would result in the imposition of an excise tax under Code
Section 4999, such payments shall be retroactively (if necessary)
reduced to the extent necessary to avoid such excise tax imposition.
Upon written notice to Executive, together with calculations of
Corporation's independent auditors, Executive shall remit to
Corporation the amount of the reduction plus such interest as may be
necessary to avoid the imposition of such excise tax. Notwithstanding
the foregoing or any other provision of this contract to the contrary,
if any portion of the amount herein payable to the Executive is
determined to be non-deductible pursuant to the regulations
promulgated under Section 280G of the Code, then Corporation shall be
required only to pay to Executive the amount determined to be
deductible under Section 280G.
(b) Executive shall not be required to mitigate the amount of any payment
provided for in this Section 6 by seeking other employment or
otherwise. Unless otherwise agreed to in writing, the amount of
payment or the benefit provided for in this Section 6 shall not be
reduced by any compensation earned by Executive as the result of
employment by another employer or by reason of Executive's receipt of
or right to receive any retirement or other benefits after the date of
termination of employment or otherwise.
7. Rights in Event of Termination of Employment Absent Change in Control.
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(a) If Executive's employment is involuntarily terminated by Bank without
Cause and no Change in Control shall have occurred at the date of such
termination, then Bank shall pay Executive an amount equal to the
greater of the remaining balance of the Agreed Compensation otherwise
due to the Executive for the remainder of the then existing Employment
Period or 1.0 times the Executive's Agreed Compensation as defined in
subsection (g) of Section 3, which amount shall be payable in twelve
(12) equal monthly installments and shall be subject to federal, state
and local tax withholdings. In addition, for a period of one (1) year
from the date of termination of employment, or until Executive secures
substantially similar benefits through other employment, whichever
shall first occur, Executive shall receive a continuation of all life,
disability, medical insurance and other normal health and welfare
benefits in effect with respect to Executive during the two (2) years
prior to his termination
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of employment, or, if Bank cannot provide such benefits because
Executive is no longer an employee, a dollar amount equal to the cost
to Executive of obtaining such benefits (or substantially similar
benefits). In addition, if permitted pursuant to the terms of the
plan, Executive shall receive additional retirement benefits to which
he would have been entitled had his employment continued through the
then remaining term of the Agreement. However, in the event the
payment described herein, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with his
termination of employment, would result in the imposition of an excise
tax under Code Section 4999, such payments shall be retroactively (if
necessary) reduced to the extent necessary to avoid such excise tax
imposition. Upon written notice to Executive, together with
calculations of Corporation's independent auditors, Executive shall
remit to Corporation the amount of the reduction plus such interest as
may be necessary to avoid the imposition of such excise tax.
Notwithstanding the foregoing or any other provision of this contract
to the contrary, if any portion of the amount herein payable to the
Executive is determined to be non-deductible pursuant to the
regulations promulgated under Section 280G of the Code, then Bank
shall be required only to pay to Executive the amount determined to be
deductible under Section 280G.
(b) Executive shall not be required to mitigate the amount of any payment
provided for in this Section 7 by seeking other employment or
otherwise. Unless otherwise agreed to in writing, the amount of
payment or the benefit provided for in this Section 7 shall not be
reduced by any compensation earned by Executive as the result of
employment by another employer or by reason of Executive's receipt of
or right to receive any retirement or other benefits after the date of
termination of employment or otherwise.
8. Covenant Not to Compete.
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(a) Executive hereby acknowledges and recognizes the highly competitive
nature of the business of Corporation and Bank and accordingly agrees
that, during and for the applicable period set forth in Section 8(c)
hereof, Executive shall not:
(i) be engaged, directly or indirectly, either for his own account or
as agent, consultant, employee, partner, officer, director,
proprietor, investor (except as an investor owning less than 5%
of the stock of a publicly owned company) or otherwise of any
person, firm, corporation or enterprise engaged in (1) the
banking (including bank holding company) or financial services
industry, or (2) any other activity in which Corporation or Bank
or any of their subsidiaries are engaged during the Employment
Period, in any county in which, at any time during the Employment
Period or at the date of termination of the Executive's
employment, a branch, office or other facility of Corporation or
Bank or any of their subsidiaries is located, or in any county
contiguous to such a county, including contiguous counties
located outside of the Commonwealth of Pennsylvania (the
"Non-Competition Area"); or
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(ii) provide financial or other assistance to any person, firm,
corporation, or enterprise engaged in (1) the banking (including
bank holding company) or financial services industry, or (2) any
other activity in which Corporation or Bank or any of their
subsidiaries are engaged during the Employment Period, in the
Non-Competition Area;
(iii) solicit current and former customers of Corporation, Bank or any
Corporation subsidiary in the Non-Competition Area; or
(iv) solicit current or former employees of Corporation, Bank or any
Corporation subsidiary.
(b) It is expressly understood and agreed that, although Executive and
Corporation and Bank consider the restrictions contained in Section
8(a) hereof reasonable for the purpose of preserving for Corporation
and Bank and their subsidiaries their good will and other proprietary
rights, if a final judicial determination is made by a court having
jurisdiction that the time or territory or any other restriction
contained in Section 8(a) hereof is an unreasonable or otherwise
unenforceable restriction against Executive, the provisions of Section
8(a) hereof shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such other extent
as such court may judicially determine or indicate to be reasonable.
(c) The provisions of this Section 8 shall be applicable commencing on the
effective date of the merger and ending on one of the following dates,
as applicable:
(i) if Executive's employment terminates in accordance with the
provisions of Section 3 (other than Section 3(b) relating to
termination for Cause), the first anniversary date of the
effective date of termination of employment; or
(ii) if Executive's employment terminates in accordance with the
provisions of Section 3(b) of this Agreement (relating to
termination for Cause), the second anniversary date of the
effective date of termination of employment; or
(iii) if the Executive voluntarily terminates his employment in
accordance with the provisions of Section 5 hereof, the third
anniversary date of the effective date of termination of
employment; or
(iv) if the Executive's employment is involuntarily terminated in
accordance with the provisions of Section 7 hereof, the first
anniversary date of the effective date of termination of
employment.
9. Unauthorized Disclosure. During the term of his employment hereunder, or at
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any later time, the Executive shall not, without the written consent of the
Boards of Directors of Corporation and Bank or a person authorized thereby,
knowingly disclose to any person, other than an employee of Corporation or
Bank or a person to whom disclosure is reasonably necessary or appropriate
in connection with the performance by the Executive of his duties
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as an executive of Corporation and Bank, any material confidential
information obtained by him while in the employ of Corporation and Bank
with respect to any of Corporation and Bank's services, products,
improvements, formulas, designs or styles, processes, customers, methods of
business or any business practices the disclosure of which could be or will
be damaging to Corporation or 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
person with the assistance, consent or direction of the Executive) or any
information of a type not other considered confidential by persons engaged
in the same business or a business similar to that conducted by Corporation
and Bank or any information that must be disclosed as required by law.
10. Liability Insurance. Corporation and Bank shall use their best efforts to
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obtain insurance coverage for the Executive under an insurance policy
covering officers and directors of Corporation and Bank against lawsuits,
arbitrations or other legal or regulatory proceedings; however, nothing
herein shall be construed to require Corporation and/or Bank to obtain such
insurance, if the Board of Directors of the Corporation and/or Bank
determine that such coverage cannot be obtained at a reasonable price.
11. Notices. Except as otherwise provided in this Agreement, any notice
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required or permitted to be given under this Agreement shall be deemed
properly given if in writing and if mailed by registered or certified mail,
postage prepaid with return receipt requested, to Executive's residence, in
the case of notices to Executive, and to the principal executive offices of
Corporation and Bank, in the case of notices to Corporation and Bank.
12. Waiver. No provision of this Agreement may be modified, waived or
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discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Executive and an executive officer specifically
designated by the Boards of Directors of Corporation and Bank. No waiver by
either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to similar
or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
13. Assignment. This Agreement shall not be assignable by any party, except by
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Corporation and Bank to any successor in interest to their respective
businesses.
14. Entire Agreement. This Agreement contains the entire agreement of the
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parties relating to the subject matter of this Agreement.
15. Successors; Binding Agreement.
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(a) Corporation and Bank will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the businesses and/or assets of Corporation and
Bank to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Corporation and Bank would be
required to perform it if no such succession had taken place. Failure
by Corporation and Bank to obtain such assumption and agreement prior
to the effectiveness of any such succession shall constitute a breach
of this Agreement
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and the provisions of Section 3 of this Agreement shall apply. As used
in this Agreement, "Corporation" and "Bank" shall mean Corporation and
Bank, as defined previously and any successor to their respective
businesses and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. If
Executive should die after a Notice of Termination is delivered by
Executive, or following termination of Executive's employment without
Cause, and any amounts would be payable to Executive under this
Agreement if Executive had continued to live, all such amounts shall
be paid in accordance with the terms of this Agreement to Executive's
devisee, legatee, or other designee, or, if there is no such designee,
to Executive's estate.
16. Arbitration. Corporation, Bank and Executive recognize that in the event a
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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 are to be submitted
for resolution, in Pittsburgh, Pennsylvania, to the American Arbitration
Association (the "Association") in accordance with the Association's
National Rules for the Resolution of Employment Disputes or other
applicable rules then in effect ("Rules"). Corporation, Bank or Executive
may initiate an arbitration proceeding at any time by giving notice to the
other in accordance with the Rules. Corporation and Bank and Executive may,
as a matter or right, mutually agree on the appointment of a particular
arbitrator from the Association's 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, Corporation, Bank
and 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.
17. Validity. The invalidity or unenforceability of any provision of this
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Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
18. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the domestic, internal laws of the Commonwealth of
Pennsylvania, without regard to its conflicts of laws principles.
19. Headings. The section headings of this Agreement are for convenience only
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and shall not control or affect the meaning or construction or limit the
scope or intent of any of the provisions of this Agreement.
12
Execution Copy
--------------
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ATTEST: XXXX XXXXXX FINANCIAL CORP.
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxx
--------------------- ---------------------
Xxxxxx X. Xxxxxxx, Secretary Xxxxx X. Xxxxxxxx, President
XXXX XXXXXX BANK & TRUST COMPANY
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxx
--------------------- ---------------------
, Secretary Xxxxx X. Xxxxxxxx, President
WITNESS:
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxxx X. Xxxx
--------------------- -------------------
Xxxxxxx X. Xxxx
"Executive"
13
