EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of September, 1986, by and between QNB,
Corp., a registered bank holding company ("QNB") and Xxxxxx X. Xxxxx
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by QNB as its President, and
is willing to serve QNB on a full-time basis during the period, and on the terms
and conditions hereinafter set forth; and
WHEREAS, QNB has determined that the future services of the Executive will
be of value to QNB and desires to provide an inducement to the Executive to
remain an employee of QNB;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, it is agreed as follows:
1. Employment. QNB hereby employs the Executive and the Executive hereby
accepts employment upon the terms and conditions hereinafter set forth.
2. Term of Employment. The term of this Agreement shall begin on September
1, 1986, and shall terminate on December 31, 2013; provided that either party
hereto may give three years prior written notice to the other party of the
intention of that party not to have the Agreement extended, in which case this
Agreement shall terminate three years from the date of such notice.
3. Duties.
3.1 Job Description. The Executive is engaged as President and agrees
to perform such duties and render such services consistent therewith as
may from time to time be reasonably required by him by the Board of
Directors of QNB (the "Board"). In addition, the Executive is engaged as
President of Quakertown National Bank, a wholly owned subsidiary of QNB
(the "Bank") and agrees to perform such services as may be requested of
him by The Quakertown National Bank's Board of Directors, provided that
such services are consistent with his position as President. Executive
shall devote his entire productive time, ability and attention (except
for normal vacation periods or illness) to the performance of his duties
for The Quakertown National Bank and QNB.
3.2 Reassignment. The Executive may be reassigned and asked services
consistent with his position as President to any other banking
corporations which become affiliated with QNB and agrees to perform such
services, provided, however, that the Executive shall not be appointed to
a position at a location is excess of 15 miles from his personal
residence in Quakertown, Pennsylvania.
3.3 Evaluations. The Executive will report directly to the Board or to
such other person as the Board may designate. Executive's job performance
will be evaluated at least annually for consideration of merit increases
in salary, bonus and any other form of supplemental income or benefits
that QNB or The Quakertown National Bank may award to its senior
officers.
4. Base Salary and Reimbursement for Expenses.
4.1 Base Salary. During the term of this agreement, QNB will pay to
Executive a base salary at an annual rate not less than $ 67,580 subject
to an annual review and subject to such upward adjustment based on
performance as may be deemed appropriate by the Board or a designated
committee thereof. Such base salary is payable at regular intervals in
accordance with QNB's normal payroll practices now or hereafter in
effect.
4.2 Reimbursement for Expenses. QNB shall reimburse Executive for all
expenses incurred by Executive which QNB determines to be reasonable and
necessary (in accordance with its normal reimbursement practices now or
hereafter in effect) for Executive to carry out his duties hereunder.
5. Fringe Benefits.
5.1 Programs. The Executive shall be entitled to participate in any and
all fringe benefit programs presently offered or hereafter established by
QNB, including without limitation, profit sharing plans, thrift and
savings plans, insurance plans, supplemental insurance and benefit plans,
and other benefits which are generally available to QNB's executives at
the Executive's level. QNB shall establish and maintain fringe benefit
programs for its executive officers substantially comparable to the
fringe benefit programs for executive officers established and maintained
by The Quakertown National Bank. However, nothing contained herein shall
be construed as requiring The Quakertown National Bank to establish any
fringe benefit program or QNB to maintain any fringe benefit programs not
maintained by The Quakertown National Bank.
6. Facilities. The Executive shall be furnished with such office, supplies
and personnel which, after consultation with the Board's Executive Committee,
The Quakertown National Bank shall deem necessary and appropriate for the
adequate performance by the Executive of this duties for The Quakertown National
Bank.
7. Non-Disclosure. The Executive shall not, at any time during the term of
the Agreement of thereafter, except as properly required in the conduct of the
business of QNB, and as authorized by QNB, disclose or authorize anyone else to
disclose: (i) any secret, confidential, technical, planning or policy matter
relating to any aspect of QNB's business; (ii) any operational, technical,
management, financial control system or tax matter, information or process
relating to QNB or its customers; (iii) any trade name, trademark, patent,
copyright, product, design, system, formula, product composition, label,
document, book record, or any other printed or nonprinted matter used by, or
contemplated for use by QNB or any of its customers; or (iv) any mailing or
customer list.
8. Termination.
8.1 Discharge Prior to a Change in Control. Prior to a change in
control, as defined in section 8.2 hereof, QNB may, at any time,
discharge the Executive, provided that QNB has just or proper cause for
such discharge. Without limiting the foregoing, such just or proper cause
shall include:
(a) Executive's failure to properly perform his duties under this
Agreement;
(b) Executive's violation of any covenants or commitments set forth in
this Agreement;
(c) Executive's failure or refusal to comply with the proper and
reasonable written policies or directives of the Board which do not
violate any of the provisions hereof.
(d) Any conduct on the part of the Executive which violates any
applicable state of federal law.
(e) Any conduct on the part of the Executive which, in the reasonable
discretion of the Board, would make Executive's continued employment
hereunder prejudicial to the best interest of QNB.
8.2 Discharge Following a Change in Control. If any one person or group
obtains voting control of common shares representing 25% of the
outstanding common stock of QNB (a "change in control"), thereafter
Section 8.1 shall be inoperative and QNB may only terminate Executive's
employment if Executive:
(a) materially breaches his obligation hereunder;
(b) fails or refuses to comply with the proper and reasonable written
policies or directives of the Board which do not violate any of the
provisions hereof;
(c) is convicted of any felony.
8.3 Deemed Termination. If the Executive is required to perform
services inconsistent with his position as President, or it the Executive
is appointed to a position at a location in excess of 15 miles from his
personal residence in contravention of Paragraph 3.2 hereof, the
executive's employment shall be deemed terminated by QNB for reasons
other that conduct specified in Paragraph 8.1 or 8.2 hereof.
8.4 Death or Disability. If the Executive dies or if in the opinion of
a physician selected by QNB, he becomes mentally or physically disabled,
and if he has for six successive months, or for shorter periods
aggregating, 9 months in any period of 18 consecutive months, been unable
to perform the duties assigned to him, Executive's employment hereunder
shall terminate automatically.
8.5 Payment Upon Termination. If Executive's employment hereunder is
terminated by QNB for reasons other than death or disability or conduct
specified in paragraphs 8.1 or 8.2 hereof or is deemed terminated
pursuant to Paragraph 8.3 hereof, The Quakertown National Bank shall pay
to the Executive, in a lump sum, severance pay equal to 2.99 times
Executive's then current base salary, which shall be due and payable
within 30 days of such termination.
8.6 Payment Upon Death or Disability. If the Executive's employment
hereunder is terminated due to death or disability pursuant to Paragraph
8.4 hereof, The Quakertown National Bank shall pay to the Executive, the
Executive's estate or a beneficiary designated by the Executive, as the
case may be, in twelve equal monthly installments, an amount equal to the
Executive's then current annual base salary. QNB's obligation hereunder
shall be offset by all payments made to the Executive, the Executives
estate or a designated Beneficiary, pursuant to any life or disability
insurance contract maintained by, and at the expense of, QNB.
9. Notices. Unless either party notifies the other to the contrary, any
notice required hereunder shall be duly given if delivered in person or by
registered first class mail:
If to QNB, to:
QNB, Corp.
Xxxxx xxx Xxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, XX
Attn: Chairman, Executive Compensation
Committee, Board of Directors
If to Executive, to:
Xxxxxx X. Xxxxx
0 Xxxxxx Xxxx
Xxxxxxxxxx, XX
10. General Provisions.
10.1 This Agreement shall be binding upon and inure to the benefit of QNB
and its successors and assigns and Executive, his designees, and his
estate. Neither Executive, his designees, nor his estate shall commute,
pledge, encumber, sell of or otherwise dispose of the rights to receive
the payments provided in this Agreement, which payments and the rights
thereto are expressly declared to be nontransferable and nonassignable.
10.2 This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania from time to time in effect.
10.3 If Executive resorts to the courts to recover any amounts due to him
in the event his employment is terminated following a "change in
control", Executive shall be reimbursed by QNB for his legal fees and the
costs of the proceedings on a monthly basis. Provided, however, if a
court later determines that Executive's action was commenced and
maintained in bad faith, Executive shall repay such reimbursements to
QNB. Further, provided, if Executive wins an award in such action
resulting from a termination following a "change in control", he shall be
entitled to receive interest on such award payable from the date of
termination to the date of payment at the rate of prime plus 5% per
annum, compounded monthly, with prime being equal to the rate designated
as such by The Quakertown National Bank or its successor.
10.4 This Agreement represents the entire agreement between Executive
and QNB with respect to the subject matter hereof, and replaces all prior
agreements between the parties. This Agreement may not be amended or
modified except by a writing signed by the parties hereto. Any written
amendment, waiver or termination hereof executed by QNB and Executive (or
his estate) shall be binding upon them and upon all Persons, without the
necessity of securing the consent of any other Person and no person shall
be deemed to be a third party beneficiary under this Agreement.
10.5 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which taken together
shall constitute one and the same Agreement.
10.6 Except as otherwise expressly set forth herein, no failure on the
part of any party hereto to exercise and no delay in exercising any
right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.
10.7 The headings of the Paragraphs of this Agreement have been
inserted for convenience of reference only and shall in no way restrict
any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ATTEST: QNB CORP.
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
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Secretary Chairman
WITNESS: EXECUTIVE
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxx
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Quakertown National Bank, intending to be legally bound hereby, agrees to act as
surety for and guarantor of all obligations of QNB to Executive under this
Agreement, and under any amendment hereto binding upon QNB and Executive,
regardless of whether Quakertown National Bank consents to such amendment.
ATTEST: QUAKERTOWN NATIONAL BANK
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Secretary Chairman
