EMPLOYMENT AGREEMENT
Exhibit
99.2
NOTICE
TO XXXXX X. XXXXXX:
This
is a very important legal document, and you should carefully review and
understand the terms and effect of this document before signing it. This
Agreement is being entered into in exchange for your entering into a termination
of an existing Employment Agreement you have with EAST PENN FINANCIAL
CORPORATION and EAST PENN BANK (the “Termination Agreement”). Therefore, you
should consult with an attorney before signing this Agreement or the Termination
Agreement. You have twenty one (21) days from the day of receipt of this
document, May 10, 2007, to consider this Agreement and the Termination
Agreement. The twenty one (21) days will begin to run on the day after receipt.
If you choose to sign this Agreement and the Termination Agreement, you will
have an additional seven (7) days following the date of your signature to revoke
the Termination Agreement. If you revoke the Termination Agreement
within that seven (7) day period, this Agreement and the Termination Agreement
shall not become effective or enforceable by you or any other
party.
THIS
AGREEMENT (“Agreement”) is made as of November 16, 2007, between
HARLEYSVILLE MANAGEMENT SERVICES, LLC (“HMS”), a corporation
having a place of business at 000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
and XXXXX X. XXXXXX ("Executive"), an individual residing at
0000 X. Xxxx Xxxxx, Xxxxxxxx, XX 00000.
WITNESSETH:
WHEREAS,
HMS is a subsidiary of HARLEYSVILLE NATIONAL BANK AND TRUST
COMPANY (the "Bank"), a national bank having a place of business at 000
Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
WHEREAS,
Bank is a subsidiary of HARLEYSVILLE NATIONAL CORPORATION
("HNC"), a Pennsylvania business corporation having a place of business at
000
Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
WHEREAS,
HMS desires to employ Executive as President of the East Penn Bank
Division of the Bank and Executive Vice President of HNC and the Bank, effective
the date of this Agreement, under the terms and conditions set forth
herein;
WHEREAS,
Executive desires to accept that assignment under the terms and conditions
set
forth herein.
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AGREEMENT:
NOW,
THEREFORE, the parties hereto intending to be legally bound hereby
agree as follows:
1.
Employment. HMS hereby employs
Executive and Executive hereby accepts employment with HMS on the terms and
conditions set forth in this Agreement.
2.
Duties and Positions of
Employee.
(a)
Executive shall perform and discharge well and faithfully such duties as an
executive officer of the Bank and HNC as may be assigned to Executive from
time
to time by the Board of Directors of the Bank and HNC. Executive shall be
President of the East Penn Bank Division of the Bank and Executive Vice
President of HNC and the Bank and in such capacities shall report to the chief
executive officer of HNC, and shall hold such other titles as may be given
to
him from time to time by the Board of Directors of the Bank and HNC. Executive
shall devote his full time, attention and energies to the business of the Bank
and HNC during the Employment Period (as defined in Section 3 of this
Agreement).
(b)
During the Employment Period, so long as the Bank and HNC maintain an Executive
Council, Executive shall be a member of the Executive Council.
(c)
During the Employment Period, Executive shall be a member of the Executive
Committee of the Bank’s Board of Directors.
(d)
During the Employment Period, Executive shall be a member of the Bank’s ALCO,
Senior Loan, Problem Asset, Credit Policy, Disclosure, Senior Staff and
Strategic Planning Committees, so long as the Bank and HNC maintain
them.
(e)
During the Employment Period, the Bank and HNC will cause Executive to be
appointed or elected to the Boards of Directors of HNC and HNB for at least
three (3) years from the date of this Agreement.
(f)
Notwithstanding any other provision of this Section 2, this Section 2 shall
not
be construed as preventing Executive from (a) engaging in activities incident
or
necessary to personal investments so long as such investment 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 the Bank and HNC. The Executive shall not engage in any business
or
commercial activities, duties or pursuits that compete with the business or
commercial activities of HNC, or any of its subsidiaries or affiliates, nor
may
the Executive serve as a director or officer or in any other capacity in a
company that competes with HNC or any of its subsidiaries or
affiliates.
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3.Term
of Agreement.
(a)
This
Agreement shall be for a three (3) year period (the "Employment Period")
beginning on the date of this Agreement and ending three (3) years from the
date
of this Agreement. On the third anniversary of the date of this Agreement,
and
on the same date of each subsequent year (each, a "Renewal Date") the Employment
Period shall be automatically extended for a period ending one (1) year from
the
current Renewal Date, unless either party shall give written notice of
non-renewal to the other party at least ninety (90) days prior to that 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 the Bank and HNC 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;
(ii)
Executive's willful failure to follow the good faith lawful instructions of
the
Board of Directors of the Bank and HNC with respect to the operations of the
Bank and HNC; or
(iii)
Executive's willful failure to perform Executive's duties to the Bank and HNC
(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 the Bank and HNC, 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 that brings public discredit to HNC or
the
Bank;
(vii)
Executive's breach of fiduciary duty involving personal profit;
(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;
(ix)
Executive's unlawful discrimination, including harassment, against employees,
customers, business associates, contractors or visitors of HNC or the
Bank;
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(x)
Executive's theft or abuse of HNC's or the Bank’s property or the property of
customers, employees, contractors, vendors or business associates of HNC or
the
Bank;
(xi)
any
final removal or prohibition order to which the Executive is subject, by a
federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance
Act;
(xii)
any
act of fraud or misappropriation by Executive; or
(xiii)
intentional misrepresentation of a material fact, or intentional omission of
information necessary to make the information supplied not materially
misleading, in any application or other information provided by the Executive
to
HNC or the Bank or any representative of HNC or the Bank in connection with
the
Executive's employment with HMS and the Bank.
If
this
Agreement is terminated for Cause, 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
of
the East Penn Bank Division of the Bank and Executive Vice President of HNC
and
the Bank, (ii) a reduction in salary or benefits, except such reductions that
are the result of a national financial depression or national or bank emergency
when such reduction has been implemented by the Board of Directors for HNC
and
Bank's senior management, or (iii) a reassignment which requires Executive
to
move his principal office more than fifty (50) miles from Executive's office
on
the date of this Agreement. If such termination occurs for Good Reason and
upon
execution of a mutual release, then HMS will provide Executive with the
following pay and benefits: (i) a payment in an amount equal to the greater
of:
that portion of Executive’s Agreed Compensation, as defined in subsection (g) of
this Section 3, for the then existing Employment Period that has not been paid
to Executive as of the date his employment terminates or 1.0 times the
Executive's Agreed Compensation. Such amount shall be payable in twelve (12)
equal monthly installments; and (ii) subject to plan terms, Executive’s
continued participation in HMS's employee benefit plans for twelve (12) months
or until Executive secures substantially similar benefits through other
employment, whichever shall first occur. If Executive is no longer eligible
to
participate in an employee benefit plan because he is no longer an employee,
HMS
will pay Executive the amount of money that it would have cost HMS to provide
the benefits to Executive.
However,
in the event
the payments 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 HMS's
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independent
auditors, Executive shall remit to HMS 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 Agreement 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"),
then
HNC shall be required only to pay to Executive the amount determined to be
deductible under Section 280G. Notwithstanding any other provision of
this Agreement, the provisions of this paragraph of this subsection (c) shall
apply only in the event that Executive terminates this Agreement with Good
Reason more than 15 months after the effective date of this
Agreement.
Executive
shall not be required to mitigate the amount of any payment provided for in
this
Section 3(c) by seeking employment or otherwise. Unless otherwise agreed to
in
writing, the amount of payment or benefit provided for in this section 3(c)
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 or right to
receive any retirement or other benefit after the date of termination of
employment or otherwise.
(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 absolutely entitled to receive
an
amount equal to and no greater than seventy (70%) of the Executive's Agreed
Compensation as defined in subsection (g) of this Section 3, less amounts
payable under any disability plan of HMS, until the earliest of (i) his return
to employment, (ii) his attainment of age 65, or (iii) his death. In addition,
Executive shall be entitled to a continuation of HMS's employee benefits for
such period. If Executive is no longer eligible to participate in an employee
benefit plan because he no longer is an employee, HMS will pay the Executive
the
amount of money that it would have cost HMS to provide the benefits to
Executive. For purposes of this Agreement, Disability shall mean Executive's
incapacitation by accident, sickness or otherwise which renders Executive
mentally or physically incapable of performing all of the essential functions
of
his job, taking into account any reasonable accommodation required by law,
without posing a direct threat to himself or others, for a period of six (6)
months.
(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)
Notwithstanding the provisions of Section 3(a) of this Agreement, this Agreement
shall terminate automatically upon Executive's voluntary termination of
employment absent Good Reason, except for the provisions of Sections 5 and
6.
(g)
The
term "Agreed Compensation" shall equal the Executive's highest
Annual Base Salary under the Agreement.
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(h)
Executive agrees that in the event his employment under this Agreement is
terminated, Executive shall resign as a director of HNC, the Bank and any
affiliate or subsidiary thereof, if he is then serving as a director of any
such
entities.
4.
Employment Period
Compensation.
(a)
Annual Base Salary. For services performed by
Executive under this Agreement, HMS shall pay Executive an Annual Base Salary
in
the aggregate during the Employment Period at the rate of $296,000.00 per year,
payable at the same times as salaries are payable to other executives of the
Bank and HNC. HMS 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 the Bank and HNC
or
any committee of such Board in the resolutions authorizing such
increases.
(b)
Incentive Plans. Executive shall be
entitled to participate in HMS’ Annual and Long Term Incentive Plans which
provide incentives based on goals and objectives as specified by
HMS.
(c)
Vacations. During the term of this Agreement, Executive
shall be entitled to four (4) weeks paid annual vacation in accordance with
the
policies as established from time to time by the Board of Directors of the
Bank
and HNC. However, Executive shall not be entitled to receive any additional
compensation from HMS for failure to take a vacation, nor shall Executive be
able to accumulate unused vacation time from one year to the next, except to
the
extent authorized by the Board of Directors of the Bank.
(d)
Employee Benefit Plans. During the term of this
Agreement, Executive shall be entitled to participate in and receive the
benefits of any Employee Benefit Plan currently in effect at HMS at the level
of
comparable HMS executives, until such time that the Board of Directors of the
Bank and HNC authorizes a change in such benefits. 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.
(e)
Automobile. During the term of this
Agreement, HMS shall provide Executive with exclusive use of an automobile
mutually agreed upon by HMS and Executive. HMS 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. HMS shall provide Executive with use of a replacement
automobile at approximately the time Executive's automobile reaches three (3)
years of age or sixty thousand (60,000) miles, whichever is first, and
approximately every three (3) years or sixty thousand (60,000) miles thereafter,
upon the same terms and conditions. The automobile shall at all times
remain the property of HMS.
(f) Business
Expenses. During the term of this Agreement,
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him, to the extent properly accounted for, in accordance
with the policies and procedures established by the Board of Directors of HMS
for its executive officers. HMS shall reimburse Executive for any
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and
all
dues and reasonable HMS related business expenses associated with the
Executive's membership in a country club, social club, or service organization,
including but not limited to, The Rotary Club, The Chamber of Commerce and
Brookside Country Club.
5.
Termination of Employment Following Change in
Control.
(a)If
a
Change in Control (as defined in Section 5(b) of this Agreement) shall occur,
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) or 3(d) of this Agreement);
(ii)
any
reduction in Executive's title, responsibilities, including reporting
responsibilities, or authority, including such title, responsibilities or
authority as such title, responsibilities or authority 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 HMS'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; or
(vii)
any
requirement that Executive travel in performance of his duties on behalf of
the
Bank or any of its subsidiaries or affiliates 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;
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 HMS (or, if involuntarily terminated, give notice
of
intention to collect benefits under this Agreement) by delivering such notice
in
writing (the "Notice of Termination") to HMS 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 HNC only (not the Bank), (B) a
sale,
exchange, transfer or other disposition of substantially all of the assets
of
HNC only (not the Bank), or (c) a purchase by HNC only (not the Bank) of
substantially all of the assets of another entity, unless (x) 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 HNC only (not the Bank) who are not interested in the
transaction and (y) 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 HNC only (not the Bank); or
(ii)
any
other change in control of HNC only (not the Bank) similar in effect to any
of
the foregoing.
6.
Rights in Event of Termination of Employment Following Change
in
Control.
(a)
In
the event that Executive delivers a Notice of Termination (as defined in Section
5(a) of this Agreement) to HMS only (not the 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, upon execution
of
a release satisfactory to HMS, HMS will provide Executive with the following
pay
and benefits: (i) a payment in an amount equal to and no greater than 2.0 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
(ii) subject to plan terms, Executive’s continued participation in HMS's
employee benefit plans for twelve (12) months or until Executive secures
substantially similar benefits through other employment, whichever shall first
occur. If Executive is no longer eligible to participate in an employee benefit
plan because he no longer is an employee, HMS will pay Executive the amount
of
money that it would have cost HMS to provide the benefits to Executive. However,
in the event the payments 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 HMS's independent auditors,
Executive shall remit to HMS the amount of the reduction plus such interest
as
maybe necessary to avoid the imposition of such excise tax. Notwithstanding
the
foregoing or any other provision of this Agreement 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 HMS shall be required only to pay to Executive the amount determined
to be deductible under Section 280G.
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(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
o£
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.
(a)
In
the event that Executive's employment is involuntarily terminated by HMS without
Cause and no Change in Control shall have occurred as of the date of such
termination, upon execution of a mutual release, HMS will provide Executive
with
the following pay and benefits: (i) a payment in an amount equal to the greater
of: that portion of the Executive’s Agreed Compensation for the then existing
Employment Period that has not been paid to Executive as of the date his
employment terminates, or 1.0 times the Executive’s Agreed Compensation. Such
amount shall be payable in a lump sum; and (ii) subject to plan terms,
Executive’s continued participation in HMS's employee benefit plans for twelve
(12) months or until Executive secures substantially similar benefits through
other employment, whichever shall first occur. If Executive is no longer
eligible to participate in an employee benefit plan because he is no longer
an
employee, HMS will pay Executive the amount of money that it would have cost
HMS
to provide the benefits to Executive.
However,
in the payments 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 imposition. Upon written notice to Executive, together
with calculations of HMS's independent auditors, Executive shall remit to HMS
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 Agreement 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 HMS shall be
required only to pay to Executive the amount determined to be deductible under
Section 280G. Notwithstanding any other provision of this Agreement,
the provisions of this paragraph of this subsection (a) shall apply only in
the
event that Executive's employment is involuntarily terminated by HMS without
Cause more than 15 months after the effective date of this
Agreement.
(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. 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.
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(c)
The
amounts payable pursuant to this Section 7 shall constitute Executive's sole
and
exclusive remedy in the event of involuntary termination of Executive's
employment by HMS without cause in the absence of a Change in
Control.
8.
Covenant Not to Compete
(a)
Executive hereby acknowledges and recognizes the highly competitive nature
of
the business of HNC and the Bank and accordingly agrees that, during his
employment and for a period of one (1) year following the date of termination
of
Executive’s employment, regardless of the reason for termination, Executive
shall not:
(i)
in
any county in which, at any time during the Employment Period or as of the
date
of termination of the Executive's employment, a branch, office or other facility
of HNC or any of its 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") 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 the banking (including bank and financial holding
company) or financial services industry, or any other activity in which HNC
or
any of its subsidiaries are engaged during the Employment Period;
or
(ii)
in
the Non-Competition area provide financial or other assistance to any person,
firm, corporation, or enterprise engaged in the banking (including bank and
financial holding company) or financial services industry, or any other activity
in which HNC or any of its subsidiaries are engaged during the Employment
Period; or
(iii)
directly or indirectly contact, solicit or attempt to induce any person,
corporation or other entity who or which is a customer or referral source of
HNC, or any of its subsidiaries or affiliates, during the term of Executive's
employment or on the date of termination of Executive's employment, to become
a
customer or referral source of any person or entity other then HNC or one of
its
subsidiaries or affiliates; or
(iv)
directly or indirectly solicit, induce or encourage any employee of HNC or
any
of its subsidiaries or affiliates, who is employed during the term of
Executive's employment or on the date of termination of Executive’s employment,
to leave the employ of HNC or any of its subsidiaries or affiliates, or to
seek,
obtain or accept employment with any person or entity other than HNC or any
of
their subsidiaries or affiliates.
(b)
It is
expressly understood and agreed that, although Executive and HNC consider the
restrictions contained in Section 8(a) hereof reasonable for the purpose of
preserving for HNC and its 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
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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.
9.
Unauthorized Disclosure. During the
term of his employment hereunder, or at any later time, the Executive shall
not,
without the written consent of the Board of Directors of the Bank and HNC or
a
person authorized thereby, knowingly disclose to any person, other than an
employee of the Bank, HNC 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 material confidential information obtained
by
him while in the employ of HMS with respect to any of HNC's or the 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 HNC or the Bank; provided, however, that
confidential information shall not include any information known generally
to
the public (other than as a result of unauthorized disclosure by the Executive
or any 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 HNC or the
Bank
or any information that must be disclosed as required by law.
10.
Work Made for Hire. Any work performed by the Executive
under this Agreement should be considered a "Work Made for Hire" as that phrase
is defined by the U.S. patent laws and its subsidiaries and affiliates. In
the
event it should be established that such work does not qualify as a Work Made
for Hire, the Executive agrees to and does hereby assign to HNC and its
affiliates and subsidiaries, all of his rights, title, and/or interest in such
work product, including, but not limited to, all copyrights, patents,
trademarks, and property rights.
11.
Return of Company Property and Documents. The
Executive agrees that, at the time of termination of his employment, regardless
of the reason for termination, he will deliver to the Bank, any and all Bank,
HNC or HMS property, including, but not limited to, automobiles, keys, security
codes or passes, mobile telephones, pagers, computers, devices, confidential
information, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, software programs, equipment,
other documents or property, or reproductions of any of the aforementioned
items
developed or obtained by the Executive during the course of his
employment.
12.
Liability Insurance. The Bank shall use its best efforts
to obtain 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 determines that such coverage cannot be obtained at a reasonable
price.
13.
Notices. Except as otherwise provided
in this Agreement, any notice 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; to the principal
executive offices of the Bank, in the case of notices to the Bank, and to the
principal executive offices of HNC, in the case of notices to HNC.
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14.
Waiver. No provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by Executive and an executive
officer specifically designated by the Board of Directors of the 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.
15.
Assignment. This Agreement shall not be
assignable by any party, except by HNC and the Bank to any successor in interest
to their respective businesses.
16.
Entire Agreement. This Agreement contains the entire
agreement of the parties and supersedes all other agreements, written or oral,
between the parties relating to the subject matter of this
Agreement.
17.
Successors, Binding Agreement.
(a)
The
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 the Bank to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Bank would
be
required to perform it if no such succession had taken place. Failure by the
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 "HNC"
and
“Bank” shall mean HNC and Bank, as defined previously and any successor to its
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 he has
delivered a Notice of Termination to HMS pursuant to Section 5 above, or
following HMS’s termination of Executive's employment without Cause, such
amounts that would have been payable to Executive under this Agreement if
Executive had continued to live, 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.
18.
Arbitration. The Bank, HMS and
Executive recognize that in the event a dispute should arise between them
concerning the interpretation or implementation of this Agreement, lengthy
and
expensive litigation will not afford a practical resolution of the issues within
a reasonable period of time. Consequently, each party agrees that all disputes,
disagreements and questions of interpretation concerning this Agreement (except
for any enforcement sought with respect to Sections 8, 9, 10 or 11, which maybe
litigated in court through an action for an injunction or other relief) are
to
be submitted for resolution, in Xxxxxxxxxx County, 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"). The Bank, HMS or Executive may initiate an
arbitration proceeding at any time by giving notice to the other in accordance
with the Rules. The Bank,
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HMS
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, the Bank, HMS 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
or any enforcement sought with respect to Sections 8, 9, 10 or 11, which may
be
litigated through an action for injunction or other relief.
19.
Validity. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall
remain in full force and effect.
20.
Applicable Law. This Agreement shall be governed by and
construed in accordance with the domestic, internal laws of the Commonwealth
of
Pennsylvania, without regard to its conflicts of laws principles.
21.
Headings. The section headings of this
Agreement are for convenience only 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:
By: /s/
XxXxx X. Xxxxx
(Signature)
Print
Name: XxXxx X.
Xxxxx
Title: Sr.
VP & Corp. Sec.
|
HARLEYSVILLE
MANAGEMENT SERVICES, LLC
By: /s/
Xxxxxxx X. High
Print
Name: Xxxxxxx X. High
Title:
Vice
President
|
|
WITNESS:
/s/
Xxxx Xxxxxxx
(Signature)
Print
Name: Xxxx
Xxxxxxx
Title:
______________________
|
/s/
Xxxxx X. Xxxxxx
Xxxxx
X. Xxxxxx
|
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