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EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of the 22nd day of July, 1999, between 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 XXXXX X. XXXXXXXX ("Executive"), an individual residing
at Lincoln Avenue, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
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WHEREAS, the 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 banking 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 President and Chief Executive Officer of each 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
President and Chief Executive Officer 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
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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 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. The Employment Period shall be
automatically extended on the third anniversary date of the Effective
Date as set forth in Section 11.2 of the Reorganization Agreement (the
"Annual Renewal Date") and on the same date of each subsequent year
for a period ending one (1) year from each Annual Renewal Date, unless
written notice of nonrenewal is given at least ninety (90) days prior
to an Annual Renewal Date, in which event this Agreement shall
terminate at the end of the then existing Employment Period.
(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 forty-five (45) consecutive days or more;
(ii) Executive's willful failure to follow the good faith lawful
instructions of the Board of Directors of Corporation or Bank
with respect to its operations, after written notice from
Corporation or Bank and a failure to cure such violation
within ten (10) days of said written notice, unless it is
apparent under the circumstances that Executive is unable to
cure such violation; or
(iii) Executive's willful 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, after written notice from Corporation or Bank
and
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a failure to cure such violation within ten (10) days of said
written notice, unless it is apparent under the circumstances
that Executive is unable to cure such violation, which failure
results in injury to Corporation or Bank, monetarily or
otherwise.
(iv) Executive's willful violation of the provisions of this
Agreement, after written notice from Corporation or Bank and a
failure to cure such violation within ten (10) days of said
written notice, unless it is apparent under the circumstances
that Executive is unable to cure such violation;
(v) dishonesty of the Executive in the performance of his duties;
(vi) Executive's removal or prohibition from being an
institutional-affiliated party by a final order of an
appropriate federal banking agency pursuant to Section 8(e) of
the Federal Deposit Insurance Act or by the Office of the
Comptroller of the Currency pursuant to national law;
(vii) conduct on the part of the Executive which brings public
discredit to Corporation or Bank; or
(viii) Executive's breach of fiduciary duty involving personal
profit.
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 President
and Chief Executive Officer of Corporation and Bank, (ii) a
reassignment which requires Executive to move his principal
residence more than fifty (50) miles from the Corporation's and
Bank's principal executive office immediately prior to this
Agreement, (iii) any removal of the Executive from office or any
adverse change in the terms and conditions of the Executive's
employment, except for any termination of the Executive's
employment under the provisions of Section 3(b) hereof, (iv) any
reduction in the Executive's Annual Base Salary as in effect on the
date hereof or as the same may be increased from time to time,
except in cases of a national financial depression or national or
bank emergency when such reduction has been implemented by the
Board of Directors for the Corporation and Bank's senior
management, or (v) any failure of Corporation and Bank to provide
the Executive with benefits at least as favorable as those enjoyed
by the Executive under any of the pension, life insurance, medical,
health and accident, disability or other employee plans of
Corporation and Bank, or the taking of any
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action that would materially reduce any of such benefits unless
such reduction is part of a reduction applicable to all employees.
If such termination occurs for Good Reason, then Corporation or
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 2.99 times the Executive's Agreed Compensation as defined in
subsection (f) of this Section 3, which amount shall be payable in
thirty-six (36) equal monthly installments and shall be subject to
federal, state and local tax withholdings. 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 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). 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 (the "Code"), the
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
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receive an amount equal to and no greater than 70% of the
Executive's Agreed Compensation as defined in subsection (f) 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. 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 one hundred eighty (180) days.
(e) 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.
(f) The term "Agreed Compensation" shall equal the sum of (A) the
Executive's highest Annual Base Salary under the Agreement, and
(B) the average of the Executive's annual bonuses with respect to
the three (3) calendar years immediately preceding the Executive's
termination.
(g) 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.
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 $143,688 per
year, minus applicable withholdings and deductions, payable at the
same times as salaries are payable to other executive employees of
Corporation or Bank. 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.
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(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 its sole discretion, deems
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) Automobile. During the term of this Agreement, Corporation or Bank
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shall provide Executive with exclusive use of an automobile
mutually agreed upon by Corporation and Bank. Corporation or Bank
shall be responsible and shall pay for all costs of insurance
coverage, repairs, maintenance and other operating and incidental
expenses, including license, fuel and oil. Corporation or Bank
shall provide Executive with a replacement automobile at
approximately the time Executive's automobile reaches two (2) years
of age or 30,000 miles, whichever is first, and approximately every
two (2) years or 30,000 miles thereafter, upon the same terms and
conditions.
(e) Employee Benefit Plans. During the term of this Agreement,
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Executive shall be entitled to participate in or receive the
benefits of any employee benefit plan currently in effect at
Corporation and 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. Corporation and Bank shall not make any
changes in such plans or benefits which would adversely affect
Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executive officers
of Corporation and Bank and does not result in a proportionately
greater adverse change in the rights of or benefits to Executive as
compared with any other executive officer of Corporation and Bank.
Nothing paid to Executive under any plan or arrangement presently
in effect or made available in the future shall be deemed to be in
lieu of the salary payable to Executive pursuant to Section 4(a)
hereof.
(f) Business Expenses. During the term of this Agreement, Executive
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shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him, which are properly accounted
for, in accordance with the policies and
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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 or 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), and 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 fifty
(50) 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
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(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 Change in Control or
occurrence of any of the foregoing events, Executive may resign
from employment with Corporation and 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.
(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
or Bank, (B) a sale, exchange, transfer or other disposition
of substantially all of the assets of Corporation or Bank, or
(C) a purchase by Corporation or Bank 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
or Bank 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 Bank; 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
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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 and Bank 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 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, Corporation and Bank shall pay Executive a lump sum
amount equal to and no greater than 2.99 times the Executive's
Agreed Compensation as defined in subsection (f) of Section 3,
minus applicable taxes and withholdings. 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 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). 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, the 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
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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) In the event that Executive's employment is involuntarily
terminated by Corporation and/or Bank without Cause and no Change
in Control shall have occurred at the date of such termination,
Corporation and Bank shall pay Executive an amount equal to and no
greater than 2.99 times the Executive's Agreed Compensation as
defined in subsection (f) of Section 3, and shall be payable in
thirty-six (36) equal monthly installments and shall be subject to
federal, state and local tax withholdings. 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 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). 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, the 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 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
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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
(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; or
(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
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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 first
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 second
anniversary date of the effective date of termination of
employment.
9. Unauthorized Disclosure. During the term of his employment hereunder, or
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at 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 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 otherwise considered confidential by persons engaged in the
same business of 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
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to obtain insurance coverage for the Executive under an insurance policy
covering officers and
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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 supersedes any and all agreements, either
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oral or in writing, between the parties with respect to the employment of
the Executive by the Bank and Corporation and this Agreement contains all
the covenants and agreements between the parties with respect to the
employment. This Agreement shall supersede and replace the Employment
Agreement dated January 1, 1999, between Xxxx Xxxxxx Financial Corp., CSB
Bank and Xxxxx X. Xxxxxxxx.
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 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
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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
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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
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.
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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.
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/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, Secretary "Corporation"
XXXX XXXXXX BANK & TRUST
COMPANY
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxx X. Xxxxxxx
------------------------------- -------------------------------
"Bank"
WITNESS:
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxx
------------------------------- -------------------------------
"Executive"
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