Contract
Exhibit
10.35
THIS
AGREEMENT (“Agreement”) is made this April
17, 2008, between HARLEYSVILLE
MANAGEMENT SERVICES, LLC (“HMS”), a corporation having a place of
business at 000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000; and Xxxxxx X.
Xxxxx (“Executive”), an individual residing at 000 Xxxxxxxxx Xxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxx 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 Executive Vice President of HNC and the Bank,
and President of Millennium Wealth
Management (“Millennium”), a division of 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.
AGREEMENT:
NOW,
THEREFORE, the parties hereto intending to be legally bound hereby agree
as follows:
1.
Employment.
(a)
HMS hereby employs Executive and Executive hereby accepts employment with HMS on
the terms and conditions set forth in this Agreement.
(b)
Executive hereby represents to HMS and HNC that (i) the execution and delivery
of this Agreement by the Executive and the performance by the Executive of the
Executive’s duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any other agreement or policy to which the Executive is
a party or by which he is otherwise bound; (ii) the agreements disclosed on
Schedule A to this Agreement are the only agreements to which Executive is a
party which contain non-solicitation or noncompetition provisions; and (iii)
Executive agrees to comply fully with the non-solicitation and noncompetition
provisions of the agreements disclosed on Schedule A.
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2.
Duties
and Positions of Employee.
(a)
Executive shall perform and discharge well and faithfully such duties as
President of Millennium as may be assigned to Executive from time to time by the
Chief Executive Officer of HNC or the Boards of Directors of HNC or Bank.
Executive shall be President of Millennium and shall hold such other titles as
may be given to him from time to time by the Boards of Directors of HNC and
Bank. Executive shall devote his full time, attention and energies to the
business of Millennium during the Employment Period (as defined in Section 3 of
this Agreement);
(b)
Provided however, that this Section 2 shall not be construed as preventing
Executive from (a) engaging in activities incident or necessary to personal
investments so long as such investment does not exceed 5% of the outstanding
shares of any publicly held company, (b) devoting a reasonable amount of time to
civic, charitable, trade association, political and similar activities with the
prior approval of the Board of Directors of HNC, which approval will not be
unreasonably withheld; or (c) 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 HNC, which
approval will not be unreasonably withheld. 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.
3.
Term
of Agreement.
(a)
This Agreement shall be for a two (2) year period (the “Term of Agreement”)
beginning on the date first mentioned above and ending two (2) years later. On
the second anniversary of the date of this Agreement, and on the same date of
each subsequent year (each, a “Renewal Date”) the Term of Agreement shall be
automatically extended for an additional year such that the Term of Agreement
shall end one (1) year from each Renewal Date, unless either party shall give
written notice of non-renewal to the other party at least one hundred and twenty
(120) days prior to that Renewal Date, in which event this Agreement shall
terminate at the end of the then existing Term of Agreement.
(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 Chief Executive Officer of 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;
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(ii) Executive’s
willful failure to follow the good faith lawful instructions of the Chief
Executive Officer of HNC or the Boards of Directors of HNC or the Bank with
respect to the operations of HNC;
(iii)
Executive’s willful failure to perform Executive’s duties to HNC, Bank or
Millennium (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 HNC, the Bank or Millennium, 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, the
Bank, or Millennium;
(vii) Executive’s
breach of fiduciary duty involving personal gain;
(viii)
Executive’s willful 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, the Bank, or
Millennium;
(x)
Executive's theft or abuse of HNC's, the Bank’s, or Millennium’s property or the
property of customers, employees, contractors, vendors or business associates of
HNC, the Bank, or Millennium;
(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;
(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, the Bank, or Millennium or any representative of HNC, the Bank, or
Millennium in connection with the Executive's employment with HMS and
Millennium;
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(xiv)
judgment of a court that he has violated any noncompetition or non-solicitation
agreement with any other entity, provided such violation shall not be a result
of the Board or Chief Executive Officer instructing him to do so;
or
(xv)
failure of Executive to meet performance standards as defined by annual goals
established by the Chief Executive Officer of HNC or the Boards of Directors of
HNC or the Bank. In the event a Change of Control as defined in
Section 5(b) occurs, this Section 3(b)(xv) shall cease to apply and shall be
considered null and void.
If
this Agreement is terminated for Cause, Executive's rights under this Agreement
shall cease as of the effective date of such termination and HMS shall have no
further obligation under this Agreement.
(c)
Notwithstanding the provisions of Section 3(a) of this Agreement and subject to
the provisions of Section 3(g) 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 Millennium, (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 or Bank’s senior
management or Millennium, or (iii) a reassignment which requires Executive to
move his principal office more than seventy-five (75) miles from Executive’s
office on the date of this Agreement.
If
such termination occurs for Good Reason and upon Executive’s execution of a
release of claims satisfactory to HMS, then HMS will provide Executive with the
following pay and benefits: (i) a payment in an amount equal to 1.0 times the
Executive’s then Annual Base Salary payable in twelve (12) equal monthly
installments; and (ii) HMS shall reimburse Executive in an amount equal to the
monthly premium paid by him to obtain substantially similar employee benefits
which he enjoyed prior to termination, which reimbursement shall continue until
the expiration of 12 months following the date of termination of employment or
until Executive secures substantially similar benefits through other employment,
whichever shall first occur, subject to Code Section 409A if
applicable.
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
Internal Revenue Code of 1986, as amended (“Code”) Section 4999, the severance
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 may be necessary to avoid the
imposition of such excise tax. Notwithstanding
the foregoing or any other provision of this Agreement to the
contrary,
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if
any portion of the amount herein payable to the Executive is determined to be
non-deductible pursuant to the regulations promulgated under Code Section 280G,
then HMS shall be required only to pay to Executive the amount determined to be
deductible under Section 280G.
If
when the Executive’s employment terminates, the Executive is a “specified
employee,” as defined in Code Section 409A(a)(2)(B)(i), then despite any
provision of this Employment Agreement or other plan or agreement to the
contrary, the Executive will not be entitled to the payments until the earliest
of: (a) the date that is at least six months after the Executive’s separation
from service (within the meaning of Code Section 409A) for reasons other than
the Executive’s death, (b) the date of the Executive’s death, or (c) any earlier
date that does not result in additional tax or interest to the Executive under
Code Section 409A. As promptly as possible after the end of the
period during which payments are delayed under this provision, the entire amount
of the delayed payments shall be paid to the Executive in a single lump sum with
any remaining payments to commence in accordance with the terms of this
Agreement or other applicable plan or agreement.
Executive
acknowledges that the amounts payable pursuant to this Section 3(c) shall
constitute Executive's sole and exclusive remedy in the event Executive
terminates employment for Good Reason and shall represent the maximum extent of
liability that Executive can claim against HMS, HNC, or Millennium.
(d)
Notwithstanding the provisions of Section 3(a) of this Agreement, this Agreement
shall terminate automatically upon Executive’s Disability and Executive’s rights
under this Agreement shall cease as of the date of such termination; provided,
however, that Executive shall nevertheless be entitled to receive an amount
equal to and no greater than seventy (70%) of the Executive’s then Annual Base
Salary as defined in subsection (a) of this Section 4, less amounts payable
under any disability plan of HMS, until the earliest of (i) his return to
employment, (ii) his attainment of age 65, (iii) his death, or (iv) the date
this Agreement would have expired. In addition, Executive shall be
entitled to a continuation of HMS’s employee benefits for such
period. In the event Executive is no longer eligible to participate
in any employee benefit plan because he is no longer an employee, HMS shall
reimburse Executive in an amount equal to the monthly premium paid by him to
obtain substantially similar employee benefits which he enjoyed prior to
termination, which reimbursement shall continue until the earliest of (i) his
return to employment, (ii) his attainment of age 65, (iii) his death, (iv) the
date this Agreement would have expired, or (v) until Executive secures
substantially similar benefits through other employment, whichever shall first
occur. 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
twelve (12) months.
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(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 (other than vested plan benefits) shall cease as of the
date of such termination.
(f)
Executive agrees that in the event his employment under this Agreement is
terminated, Executive shall resign, and upon such event does hereby 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.
(g)
Executive agrees that in the event of termination of this Agreement under
Section 3(a), HMS shall have no further obligation under this Agreement, other
than payment to Executive of the earned but unpaid portion of his Annual Base
Salary (defined in Section 4(a)) and employee benefits under Section 4(d), (e),
or (f), as of the date of the termination of this Agreement or until
Executive’s resignation from his employment after the date on which HMS provides
him notice of non-renewal of this Agreement, whichever first
occurs.
In
the event of termination of this Agreement under Section 3(a), HMS may terminate
Executive’s employment and shall have no further obligation under this
Agreement, except that HMS will pay to Executive his Annual Base Salary for the
period from his employment termination date to the end of the then existing Term
of Agreement and employee benefits under Sections 4(d), (e) and (f) for the
remainder of the then existing Term of Agreement.
To
the extent the Executive becomes entitled to the payments set forth in this
Section 3(g), such payments shall constitute Executive's sole and exclusive
remedy under this Agreement, shall further constitute liquidated damages for any
possible breach of this Agreement, and shall represent the maximum extent of
liability that Executive can claim against HMS, HNC, or Millennium.
4. Compensation
During the Term of Agreement.
(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 $275,000.00 per year, payable at the same times
as salaries are payable to other executives of the Bank and HNC. HMS shall
review Executive’s performance and salary at least on an annual
basis. HMS may, from time to time, in its sole discretion, 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 HNC or any committee of such Board or the Chief Executive Officer
with the approval of the Compensation Committee of the Board in the resolutions
authorizing such increases.
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(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 the Chief Executive Officer with the concurrence of the
Compensation Committee of the Board of Directors of HNC.
(c)
Vacations.
During the term of this Agreement, Executive shall be entitled to four (4) weeks
paid annual vacation (pro-rated to 3 weeks for 2008) in accordance with the
policies as established from time to time by the Board of Directors of 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 Chief Executive Officer.
(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, 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 an
automobile allowance of six hundred dollars ($600) per month.
(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.
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;
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(iv)
any reassignment of Executive to a location greater than seventy-five (75) 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; or
(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 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, Executive shall within ninety (90) days of the
occurrence of any of the foregoing events, provide notice to HMS of the
existence of the condition and provide HMS thirty (30) days in which to cure
such condition. In the event that HMS does not cure the condition
within thirty (30) days of such notice, 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.
(b)
As used in this Agreement, “Change in Control” shall mean the occurrence of any
of the following, provided the event constitutes a change in control within the
meaning of Code Section 409A and the rules, regulations, and guidance
promulgated thereunder:
(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), (C) a purchase by HNC only (not the Bank) of
substantially all of the assets of another entity, or (D) an acquisition of
common stock of HNC by a third party not HNC or an affiliate of HNC of more than
thirty-five percent (35%) of the total voting power of HNC, unless (x) such
merger, consolidation, division, sale, exchange, transfer, purchase,
disposition, or acquisition of common stock, 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
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(ii)
any other change in control of HNC only (not the Bank) similar in effect to any
of the foregoing.
(c)
A consolidation of the Bank’s subsidiary charters shall not constitute a Change
in Control under this Agreement.
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, 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 Executive’s
execution of a release of claims 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 1.0 times the Executive’s then Annual Base Salary, which amount
shall be payable in twelve (12) equal monthly installments commencing within
thirty (30) days of receiving an executed release subject to the requirements of
Code Section 409A; and (ii) HMS shall reimburse Executive in an amount equal to
the monthly premium paid by him to obtain substantially similar employee
benefits which he enjoyed prior to termination, which reimbursement shall
continue until the expiration of 12 months following the date of termination of
employment or until Executive secures substantially similar benefits through
other employment, whichever shall first occur, subject to Code Section 409A if
applicable.
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, the severance 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.
If
when the Executive’s employment terminates, the Executive is a “specified
employee,” as defined in Code Section 409A(a)(2)(B)(i), then despite any
provision of this Employment Agreement or other plan or agreement to the
contrary, the Executive will not be entitled to the payments until the earliest
of: (a) the date that is at least six months after the Executive’s separation
from service (within the meaning of
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Code
Section 409A) for reasons other than the Executive’s death, (b) the date of the
Executive’s death, or (c) any earlier date that does not result in additional
tax or interest to the Executive under Code Section 409A. As promptly
as possible after the end of the period during which payments are delayed under
this provision, the entire amount of the delayed payments shall be paid to the
Executive in a single lump sum with any remaining payments to commence in
accordance with the terms of this Agreement or other applicable plan or
agreement.
(b)
Executive shall not be required to mitigate the amount of any payment provided
for in this Section 6 by seeking other employment or otherwise. Unless otherwise
agreed to in writing, the amount of payment or the benefit provided for in this
Section 6 shall not be reduced by any compensation earned by Executive as the
result of employment by another employer or by reason of Executive’s receipt of
or right to receive any retirement or other benefits after the date of
termination of employment or otherwise.
(c)
The amounts payable pursuant to this Section 6 shall constitute Executive's sole
and exclusive remedy in the event Executive delivers a Notice of Termination
after a change in control and shall represent the maximum extent of liability
that Executive can claim against HMS, HNC, or Millennium.
7.
Rights
in Event of Termination of Employment Absent Change in
Control.
(a)
Notwithstanding the provisions of Section 3(a) of this Agreement, this Agreement
shall terminate automatically 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 Executive’s execution of
a release of claims satisfactory to HMS, HMS will provide Executive with the
following pay and benefits: (i) a payment in an amount equal to 1.0 times the
Executive’s then Annual Base Salary payable in twelve (12) equal monthly
installments; and (ii) HMS shall reimburse Executive in an amount equal to the
monthly premium paid by him to obtain substantially similar employee benefits
which he enjoyed prior to termination, which reimbursement shall continue until
the expiration of 12 months following the date of termination of employment
or until
Executive secures substantially similar benefits through other
employment, whichever shall first occur, subject to Code Section 409A if
applicable.
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, the severance 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
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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.
(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.
(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 and shall
represent the maximum extent of liability that Executive can claim against HMS,
HNC, or Millennium.
(d)
The provisions of Section 7(a) of this Agreement shall not apply in the event of
a non-renewal of this Agreement pursuant to Section 3(a). In that
event, Executive shall be limited to the pay and benefits described in Section
3(g) of this Agreement.
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 one 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 and not
exercising management discretion) 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
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(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 than 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
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 HNC or a person authorized thereby, knowingly disclose to any
person, other than an employee of the Bank, Millennium, HNC or a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by the Executive of his duties as President of Millennium, any
material confidential information obtained by him while in the employ of HMS
with respect to any of HNC’s, the Bank’s, or Millennium’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, the Bank, or Millennium; 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 or a business similar to that conducted by HNC, the Bank,
or Millennium 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. 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.
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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 HNC, any and all Bank, HNC, Millennium, 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. HNC shall use its best efforts to obtain insurance coverage
for the Executive under an insurance policy covering officers and directors of
HNC against lawsuits, arbitrations or other legal or regulatory proceedings;
however nothing herein shall be construed to require HNC to obtain such
insurance, if the Board of Directors of HNC 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 or Millennium, and to the principal executive offices of
HNC, in the case of notices to HNC.
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 the Board of Directors’ designee. 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, HMS, Bank,
or Millennium to any successor in interest to its 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) HNC
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 HNC to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that HNC would be required to perform it
if no such succession had taken place. Failure by HNC to obtain such assumption
and agreement prior to the effectiveness of any such succession shall constitute
a breach of this
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Agreement
and the provisions of Section 3 of this Agreement shall apply. As used in this
Agreement “HNC” and “Bank” and “Millennium” shall mean HNC, Bank, and
Millennium, 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.
HNC, 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”). HNC, HMS
or Executive may initiate an arbitration proceeding at any time by giving notice
to the other in accordance with the Rules. HNC, 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, HNC, 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.
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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: HARLEYSVILLE
MANAGEMENT
SERVICES, LLC
By: __/s/
Xxx
Kuhn________________ By: /s/ Xxx
Xxxxxx
Xxx
Xxxxxx
WITNESS: EXECUTIVE
/s/Xxx Xxxxxx /s/
Xxxxxx X. Xxxxx
Xxxxxx
X. Xxxxx
