SENIOR EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT is made as of March 31, 1998 by and between CENTRAL
NATIONAL BANK, CANAJOHARIE, a national banking association located in
Canajoharie, New York (the "Bank"), CNB FINANCIAL CORP., the bank holding
company for the Bank (the "Corporation"), and XXXXXX X. BRASS (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors (the "Board") of the Corporation has
authorized the Corporation to enter into severance agreements with certain key
executives of the Corporation and the Bank; and
WHEREAS, the Executive is a key executive of the Corporation and/or
the Bank and has been selected by the Board as a key executive to be a party to
this Agreement; and
WHEREAS, should the Corporation receive any proposal from a third
person concerning any possible business combination with, or acquisition of
equity securities of, the Corporation, the Board believes it imperative that the
Corporation and the Board be able to rely upon the Executive to continue in his
position, and that the Corporation be able to receive and rely upon his advice,
if it requests it, as to the best interests of the Corporation and its
shareholders without concern that he might be distracted by the personal
uncertainties and risks created by such a proposal; and
WHEREAS, should the Corporation receive any such proposals, in
addition to the Executive's regular duties, he may be called upon to assist in
the assessment of such proposals, to advise management and the Board as to
whether such proposals would be in the best interests of the Corporation and its
shareholders, and to take such other actions as the Board might determine to be
appropriate; and
WHEREAS, the Board also desires to encourage the continued
dedication of the Executive to the Corporation and the Bank and to promote the
stability of the Corporation's and the Bank's management by providing certain
protections for the Executive in the event that a Change in Control (as
hereinafter defined) occurs with respect to the Corporation;
NOW, THEREFORE, to assure the Corporation and the Bank that they
will have the continued dedication of the Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of the Corporation, and to induce the Executive to
remain in the employ of the Corporation, and for other good and valuable
consideration, the Corporation, the Bank and the Executive agree as follows:
1. Services During Certain Events. In the event a "person" or
"group" (as such quoted terms are defined in Section 4(a)(ii) below) begins a
tender or exchange offer, circulates a proxy to shareholders, or takes other
steps seeking to effect a Change of Control (as defined in
Section 4(a) below), the Executive agrees that he will not voluntarily leave the
employ of the Corporation and will render the services contemplated in the
recitals to this Agreement until the earlier of (i) the date such person or
group has abandoned or terminated his or its efforts to effect a Change of
Control, or (ii) three (3) months after a Change of Control has occurred.
2. Termination After Change of Control.
(a) In the event of a Termination (as defined in Section
4(b)below) of the Executive's employment with the Corporation (including
the Bank) within 24 months after a Change of Control of the Corporation,
the Corporation shall be obligated, subject to the limitation contained in
Section 2(b) below, to pay the Executive, as compensation for services
rendered to the Corporation and as consideration for the covenant not to
compete set forth in Section 6, an amount equal to 2.99 times the
Executive's annualized base salary (exclusive of all bonus amounts) in
effect immediately prior to the date of Termination. Such amount shall be
payable to the Executive in eight (8) equal quarterly installments
(subject to any applicable payroll or other taxes required to be
withheld), over a two (2) year period, without interest, with the first
such payment made not later than 30 days after the Executive's last day of
employment with the Corporation and each succeeding payment being due on
the same day of every third calendar month thereafter. In the event the
Executive dies at any time during the two years following his Termination,
any remaining unpaid installments provided for by this Section 2(a) shall
be paid to his estate. Notwithstanding the foregoing, at the sole election
of the Corporation, the entire amount payable to the Executive pursuant to
this Section 2(a) may be paid in a lump sum, not later than the 30th day
following the Executive's last day of employment with the Corporation.
(b) Notwithstanding anything in this Agreement to the
contrary, in the event that the amount payable to the Executive pursuant
to Section 2(a) above, when added to all other amounts paid or to be paid
to, and the value of all property received or to be received by, the
Executive in anticipation of or following a Change of Control, whether
paid or received pursuant to this Agreement or otherwise (such other
amounts and property being referred to herein as "Other Change in Control
Payments"), would constitute an excess parachute payment within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(or any successor or renumbered section), then the amount payable pursuant
to Section 2(a) of this Agreement or, as directed by the Executive, such
Other Change in Control Payments shall be reduced to the maximum amount
which, when added to such Other Change in Control Payments, does not
constitute an excess parachute payment. For purposes of determining the
extent to which payments pursuant to this Agreement and/or Other Change in
Control Payments must be reduced, the value of the covenant not to compete
set forth in Section 6 shall be valued by an independent certified public
accounting firm retained by the Corporation.
3. Other Employment. The Executive shall not be obligated to seek
other employment for mitigation of the amounts payable or arrangements made
under any provision of this
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Agreement, nor shall any payments under this Agreement be reduced on account of
any compensation, benefits or service credits for benefits from any employment
that the Executive may obtain following his Termination.
4. Definitions. For purposes of this Agreement, the following terms
shall have the following respective meanings:
(a) A "Change of Control" shall be deemed to have taken place
if either:
(i) as the result of, or in connection with any
tender or exchange offer, consolidation, merger or other
business combination, sale of assets or contested
election or any combination of the foregoing
transactions (a "Transaction"), the persons who were
directors of the Corporation before the Transaction
shall cease for any reason to constitute at least 50% of
the Board of Directors of the Corporation or any
successor to the Corporation; or
(ii) any "person" (as that term is used in Section
13(d) and 14(d)(2) of the Securities and Exchange Act of
1934 (the "Exchange Act") as in effect on the date
hereof), including a "group" as defined in Section
13(d)(3) of the Exchange Act, becomes the beneficial
owner, directly or indirectly, of shares of the
Corporation having more than 50% of the total number of
votes that may be cast for the election of Directors of
the Corporation; or
(iii) the Corporation is merged or consolidated
with another corporation and as a result of the merger
or consolidation less than 50% of the outstanding voting
securities of the surviving or resulting corporation
shall then be owned in the aggregate by the former
stockholders of the Corporation, other than affiliates
within the meaning of the Exchange Act or any party to
the merger or consolidation; or
(iv) a tender offer or exchange offer is made and
consummated for the ownership of securities of the
Corporation representing more than 50% of the combined
voting power of the Corporation's then outstanding
voting securities; or
(v) the Bank transfers substantially all of its
assets to another Corporation which is not a direct or
indirect wholly-owned subsidiary of the Corporation.
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(b) "Termination" shall mean (1) termination by the
Corporation of the employment of the Executive with the Corporation
(including the Bank) for any reason other than death, Disability (as
defined in Section 4(d)) or Cause (as defined in Section 4(c)), or (2) the
resignation of the Executive upon the occurrence of either of the
following events:
(i) A reasonable determination (as defined below)
that there has been a significant change in the nature
or scope of the Executive's authority from that prior to
a Change of Control, a reduction in the Executive's
total compensation (including all bonuses, incentive
compensation and benefits) from that prior to a Change
of Control, or a change in the location where the
Executive is required to perform services from that
prior to a Change of Control; or
(ii) A reasonable determination (as defined below)
that, as a result of a Change of Control and a change in
circumstances thereafter significantly affecting the
Executive's position, he is unable to exercise the
authority, powers, function or duties attached to his
position.
(c) "Cause" shall mean the Executive's unreasonable neglect or
refusal to perform the material duties of his position, fraud,
misappropriation or intentional material damage to the property or
business of the Corporation or commission of a felony.
(d) "Disability" shall mean the Executive's absence from his
duties with the Corporation on a full time basis for six (6) successive
months, or for shorter periods aggregating seven (7) months or more in any
year, as a result of the Executive's incapacity due to physical or mental
illness, unless within 30 days after the Corporation gives written notice
of termination following such absence the Executive shall have returned to
the full time performance of his duties.
(e) "Reasonable Determination". Termination of the Executive's
employment in the judgment of the Personnel/Compensation Committee's
"reasonable determination" shall mean termination based on:
(i) subsequent to a Change in Control of the
Corporation, and without the Executive's express written
consent, the assignment to him of any duties
inconsistent with his positions, duties,
responsibilities and status with the Corporation
immediately prior to a Change in Control, or a change in
the Executive's reporting responsibilities and status
with the Corporation immediately prior to a Change in
Control, or a change in the Executive's reporting
responsibilities, or offices as in effect immediately
prior to a Change
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in Control, or any removal of the Executive from, or any
failure to re-elect him to, any of such positions,
except in connection with the termination of his
employment for Cause, Disability or retirement or as a
result of his death; or
(iii) subsequent to a Change in Control of the
Corporation, a failure by the Corporation to continue
any bonus plans in which the Executive is presently
entitled to participate (the "Bonus Plans") as the same
may be modified from time to time but substantially in
the forms currently in effect, or a failure by the
Corporation to continue the Executive as a participant
in the Bonus Plans on at least the same basis as he
presently participates in accordance with the Bonus
Plans; or
(iv) subsequent to a Change in Control of the
Corporation and without the Executive's express written
consent, the Corporation's requiring him to be based
anywhere other than his present office location, except
for required travel on the Corporation's business to an
extent substantially consistent with his present
business travel obligations; or
(v) subsequent to a Change in Control of the
Corporation, the failure by the Corporation to continue
in effect any benefit or compensation plan, stock
ownership plan, stock purchase plan, stock option plan,
life insurance plan, health and accident plan or
disability plan in which the Executive is participating
at the time of Change in Control of the Corporation (or
plans providing him with substantially similar
benefits), the taking of any action by the Corporation
which would adversely affect the Executive's
participation in or materially reduce his benefits under
any of such plans or deprive him of any material fringe
benefit enjoyed by him at the time of the Change in
Control, or the failure by the Corporation to provide
him with the number of paid vacation days to which he is
then entitled in accordance with the Corporation's
normal vacation policy in effect on the date hereof; or
(vi) subsequent to a Change in Control of the
Corporation, the failure by the Corporation to obtain
the assumption of the agreement to perform this
Agreement by any successor as contemplated in Section 7
hereof.
For purposes of this subsection (e), "reasonable determinations" shall be
made by an affirmative vote of at least 50% of the individuals who are
both (A) members of the Board
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immediately prior to the applicable Change of Control, and (B) members of
the board of directors of the successor entity by which the Executive is
employed immediately prior to his resignation. If no individual is
described in both (A) and (B) above, then "reasonable determinations"
shall be made at the sole discretion of the Executive.
5. Trade Secrets. It is recognized that the Corporation and the Bank
have acquired and developed and will continue to acquire and develop techniques,
plans, processes, computer programs, and lists of customers and their particular
requirements which may pertain to Bank related services and equipment, and
related trade secrets, know-how, research and development, which are proprietary
and confidential in nature and are and will continue to be of unique value to
the Corporation and the Bank and its business (all hereinafter referred to as
"Confidential Information"). All Confidential Information known or in the
possession of Executive shall be kept and maintained by him as confidential and
proprietary to the Corporation and the Bank. The Executive shall not disclose
any Confidential Information at any time directly or indirectly, in any manner
to any person or firm, except to other employees of the Corporation and/or the
Bank on a "need to know" basis. Upon termination of his employment for any
reason, the Executive shall without demand therefore deliver to the Corporation
all Confidential Information in his possession. The obligations of this Section
shall survive the termination of this Agreement indefinitely.
6. Covenants Not to Compete
(a) For a period of two (2) years following the termination of
the Executive's employment with the Bank for any reason, Executive
covenants and agrees that he will not at any time directly or indirectly
in any manner or under any circumstances or conditions whatsoever be or
become interested, as an individual, partner, principal, agent, clerk,
employee, stockholder, officer, director, trustee, or in any other
capacity whatsoever, except as a nominal owner of stock of a public
corporation, in any other business in any city or town where the Bank
maintains an office at the time of the Executive's termination that in any
way competes with the business of the Bank as it exists at the time of the
Executive's termination, or engage or participate in, directly or
indirectly (whether as an officer, director, employee, partner,
consultant, holder of an equity or debt investment, lender or in any other
manner or capacity), or lend his name (or any part or variant thereof) to,
any business in any city or town where the Bank maintains an office at the
time of the Executive's termination which is, or as a result of the
Executive's engagement or participation would become, competitive with any
aspect of the business of the Bank as it exists at the time of the
Executive's termination or solicit any officer, director, employee or
agent of the Bank or any subsidiary or affiliate of the Bank to become an
officer, director, employee or agent of the Executive, his respective
affiliates or anyone else; ownership, in the aggregate, of less than one
percent (1%) of the outstanding shares of capital stock of any corporation
with one or more classes of its capital stock listed on a national
securities exchange or publicly traded in the over-the-counter market
shall not constitute a violation of the foregoing provision.
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(b) The Executive hereby acknowledges that his services are
unique and extraordinary, and are not readily replaceable, and hereby
expressly agrees that the Bank, in enforcing the covenants contained in
Sections 5 and 6, in addition to any other remedies provided for herein or
otherwise available at law, shall be entitled in any court of equity
having jurisdiction to an injunction restraining him in the event of a
breach, actual or threatened, of the agreements and covenants contained in
these Sections.
(c) The parties hereto believe that the restrictive covenants
of these Sections are reasonable. However, if at any time it shall be
determined by any court of competent jurisdiction that these Sections or
any portion of them as written, are unenforceable because the restrictions
are unreasonable, the parties hereto agree that such portions as shall
have been determined to be unreasonably restrictive shall thereupon be
deemed so amended as to make such restrictions reasonable in the
determination of such court, and the said covenants, as so modified, shall
be enforceable between the parties to the same extent as if such
amendments had been made prior to the date of any alleged breach of said
covenants.
(d) The provisions of this Section 6 shall not apply following
the Executive's termination of employment with the Bank, if the Executive
is not entitled to payment pursuant to this Agreement as a result of such
termination.
7. Successors. This Agreement shall be binding upon and inure to the
benefit of the Executive and his estate, and the Corporation and any successors
of the Corporation, but neither this Agreement nor any rights arising hereunder
may be assigned or pledged by the Executive.
8. Miscellaneous. This Agreement represents the entire agreement
between the parties with respect to the subject matter of this Agreement and
specifically supersedes any and all oral or written agreements on its subject
matter previously entered into by the parties, including without limitation the
Change in Control Agreement, dated as of May 1, 1995, between the Bank, the
Corporation and the Executive.
9. Severability. Any provision in this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability without invalidating or affecting the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not be invalidate or render unenforceable such provision in
any other jurisdiction.
10. Controlling Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of New
York.
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11. Term of Agreement.
(a) The initial term of this Agreement shall commence as of
March 31, 1998 and shall continue through December 31, 1999, unless
earlier terminated as provided herein. Thereafter, this Agreement shall be
renewed for additional one year periods, unless either party gives written
notice of non-renewal of this Agreement to the other party at least ninety
(90) days prior to the expiration of the initial term or any renewal term;
provided, however, that in no case shall this Agreement terminate; (i)
within 24 months after the occurrence of a Change of Control, or (ii)
during any period of time when the Corporation has knowledge that any
person or group (such terms are defined in Section 4(a)(ii) above) has
taken steps reasonably calculated to effect a Change in Control until, in
the opinion of the Board, such person or group has abandoned or terminated
his or its efforts to effect a Change of Control. Any determination by the
Board that such person or group has abandoned or terminated his or its
efforts to effect a Change of Control shall be conclusive and binding as
the Executive.
(b) Notwithstanding any provisions of this Agreement, this
Agreement shall not confer upon the Executive the right to be retained in
the service of the Corporation (including the Bank) nor limit the right of
the Corporation or the Bank to discharge or otherwise deal with the
Executive. It is the express understanding of the Executive, the
Corporation and the Bank that the Executive's employment shall at all
times be "at will", notwithstanding any provisions of this Agreement.
Accordingly, the Executive or the Corporation and Bank may terminate the
Executive's employment with the Bank at any time for any reason.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date specified in the first paragraph of this Agreement.
CNB FINANCIAL CORP.
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------
XxxXxxx X. Xxxxxxxx, Chair
Executive Committee
CENTRAL NATIONAL BANK, CANAJOHARIE
By: /s/ XXXXXX X. BRASS
------------------------------
Xxxxxx X. Brass, President
EXECUTIVE:
/s/ XXXXX X. XXXXX
------------------------------
Xxxxx X. Xxxxx
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SENIOR EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT is made as of March 31, 1998 by and between CENTRAL
NATIONAL BANK, CANAJOHARIE, a national banking association located in
Canajoharie, New York (the "Bank"), CNB FINANCIAL CORP., the bank holding
company for the Bank (the "Corporation"), and XXXXX X. XXXXX (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors (the "Board") of the Corporation has
authorized the Corporation to enter into severance agreements with certain key
executives of the Corporation and the Bank; and
WHEREAS, the Executive is a key executive of the Corporation and/or
the Bank and has been selected by the Board as a key executive to be a party to
this Agreement; and
WHEREAS, should the Corporation receive any proposal from a third
person concerning any possible business combination with, or acquisition of
equity securities of, the Corporation, the Board believes it imperative that the
Corporation and the Board be able to rely upon the Executive to continue in his
position, and that the Corporation be able to receive and rely upon his advice,
if it requests it, as to the best interests of the Corporation and its
shareholders without concern that he might be distracted by the personal
uncertainties and risks created by such a proposal; and
WHEREAS, should the Corporation receive any such proposals, in
addition to the Executive's regular duties, he may be called upon to assist in
the assessment of such proposals, to advise management and the Board as to
whether such proposals would be in the best interests of the Corporation and its
shareholders, and to take such other actions as the Board might determine to be
appropriate; and
WHEREAS, the Board also desires to encourage the continued
dedication of the Executive to the Corporation and the Bank and to promote the
stability of the Corporation's and the Bank's management by providing certain
protections for the Executive in the event that a Change in Control (as
hereinafter defined) occurs with respect to the Corporation;
NOW, THEREFORE, to assure the Corporation and the Bank that they
will have the continued dedication of the Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of the Corporation, and to induce the Executive to
remain in the employ of the Corporation, and for other good and valuable
consideration, the Corporation, the Bank and the Executive agree as follows:
1. Services During Certain Events. In the event a "person" or
"group" (as such quoted terms are defined in Section 4(a)(ii) below) begins a
tender or exchange offer, circulates a proxy to shareholders, or takes other
steps seeking to effect a Change of Control (as defined in
Section 4(a) below), the Executive agrees that he will not voluntarily leave the
employ of the Corporation and will render the services contemplated in the
recitals to this Agreement until the earlier of (i) the date such person or
group has abandoned or terminated his or its efforts to effect a Change of
Control, or (ii) three (3) months after a Change of Control has occurred.
2. Termination After Change of Control.
(a) In the event of a Termination (as defined in Section
4(b)below) of the Executive's employment with the Corporation (including
the Bank) within 24 months after a Change of Control of the Corporation,
the Corporation shall be obligated, subject to the limitation contained in
Section 2(b) below, to pay the Executive, as compensation for services
rendered to the Corporation and as consideration for the covenant not to
compete set forth in Section 6, an amount equal to 2.99 times the
Executive's annualized base salary (exclusive of all bonus amounts) in
effect immediately prior to the date of Termination. Such amount shall be
payable to the Executive in eight (8) equal quarterly installments
(subject to any applicable payroll or other taxes required to be
withheld), over a two (2) year period, without interest, with the first
such payment made not later than 30 days after the Executive's last day of
employment with the Corporation and each succeeding payment being due on
the same day of every third calendar month thereafter. In the event the
Executive dies at any time during the two years following his Termination,
any remaining unpaid installments provided for by this Section 2(a) shall
be paid to his estate. Notwithstanding the foregoing, at the sole election
of the Corporation, the entire amount payable to the Executive pursuant to
this Section 2(a) may be paid in a lump sum, not later than the 30th day
following the Executive's last day of employment with the Corporation.
(b) Notwithstanding anything in this Agreement to the
contrary, in the event that the amount payable to the Executive pursuant
to Section 2(a) above, when added to all other amounts paid or to be paid
to, and the value of all property received or to be received by, the
Executive in anticipation of or following a Change of Control, whether
paid or received pursuant to this Agreement or otherwise (such other
amounts and property being referred to herein as "Other Change in Control
Payments"), would constitute an excess parachute payment within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(or any successor or renumbered section), then the amount payable pursuant
to Section 2(a) of this Agreement or, as directed by the Executive, such
Other Change in Control Payments shall be reduced to the maximum amount
which, when added to such Other Change in Control Payments, does not
constitute an excess parachute payment. For purposes of determining the
extent to which payments pursuant to this Agreement and/or Other Change in
Control Payments must be reduced, the value of the covenant not to compete
set forth in Section 6 shall be valued by an independent certified public
accounting firm retained by the Corporation.
3. Other Employment. The Executive shall not be obligated to seek
other employment for mitigation of the amounts payable or arrangements made
under any provision of this
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Agreement, nor shall any payments under this Agreement be reduced on account of
any compensation, benefits or service credits for benefits from any employment
that the Executive may obtain following his Termination.
4. Definitions. For purposes of this Agreement, the following terms
shall have the following respective meanings:
(a) A "Change of Control" shall be deemed to have taken place
if either:
(i) as the result of, or in connection with any
tender or exchange offer, consolidation, merger or other
business combination, sale of assets or contested election
or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the
Corporation before the Transaction shall cease for any
reason to constitute at least 50% of the Board of
Directors of the Corporation or any successor to the
Corporation; or
(ii) any "person" (as that term is used in Section
13(d) and 14(d)(2) of the Securities and Exchange Act of
1934 (the "Exchange Act") as in effect on the date
hereof), including a "group" as defined in Section
13(d)(3) of the Exchange Act, becomes the beneficial
owner, directly or indirectly, of shares of the
Corporation having more than 50% of the total number of
votes that may be cast for the election of Directors of
the Corporation; or
(iii) the Corporation is merged or consolidated with
another corporation and as a result of the merger or
consolidation less than 50% of the outstanding voting
securities of the surviving or resulting corporation shall
then be owned in the aggregate by the former stockholders
of the Corporation, other than affiliates within the
meaning of the Exchange Act or any party to the merger or
consolidation; or
(iv) a tender offer or exchange offer is made and
consummated for the ownership of securities of the
Corporation representing more than 50% of the combined
voting power of the Corporation's then outstanding voting
securities; or
(v) the Bank transfers substantially all of its
assets to another Corporation which is not a direct or
indirect wholly-owned subsidiary of the Corporation.
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(b) "Termination" shall mean (1) termination by the
Corporation of the employment of the Executive with the Corporation
(including the Bank) for any reason other than death, Disability (as
defined in Section 4(d)) or Cause (as defined in Section 4(c)), or (2) the
resignation of the Executive upon the occurrence of either of the
following events:
(i) A reasonable determination (as defined below)
that there has been a significant change in the nature or
scope of the Executive's authority from that prior to a
Change of Control, a reduction in the Executive's total
compensation (including all bonuses, incentive
compensation and benefits) from that prior to a Change of
Control, or a change in the location where the Executive
is required to perform services from that prior to a
Change of Control; or
(ii) A reasonable determination (as defined below)
that, as a result of a Change of Control and a change in
circumstances thereafter significantly affecting the
Executive's position, he is unable to exercise the
authority, powers, function or duties attached to his
position.
(c) "Cause" shall mean the Executive's unreasonable neglect or
refusal to perform the material duties of his position, fraud,
misappropriation or intentional material damage to the property or
business of the Corporation or commission of a felony.
(d) "Disability" shall mean the Executive's absence from his
duties with the Corporation on a full time basis for six (6) successive
months, or for shorter periods aggregating seven (7) months or more in any
year, as a result of the Executive's incapacity due to physical or mental
illness, unless within 30 days after the Corporation gives written notice
of termination following such absence the Executive shall have returned to
the full time performance of his duties.
(e) "Reasonable Determination". Termination of the
Executive's employment in the judgment of the Personnel/Compensation
Committee's "reasonable determination" shall mean termination based on:
(i) subsequent to a Change in Control of the
Corporation, and without the Executive's express written
consent, the assignment to him of any duties inconsistent
with his positions, duties, responsibilities and status
with the Corporation immediately prior to a Change in
Control, or a change in the Executive's reporting
responsibilities and status with the Corporation
immediately prior to a Change in Control, or a change in
the Executive's reporting responsibilities, or offices as
in effect immediately prior to a Change
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in Control, or any removal of the Executive from, or any
failure to re-elect him to, any of such positions, except
in connection with the termination of his employment for
Cause, Disability or retirement or as a result of his
death; or
(iii) subsequent to a Change in Control of the
Corporation, a failure by the Corporation to continue any
bonus plans in which the Executive is presently entitled
to participate (the "Bonus Plans") as the same may be
modified from time to time but substantially in the forms
currently in effect, or a failure by the Corporation to
continue the Executive as a participant in the Bonus Plans
on at least the same basis as he presently participates in
accordance with the Bonus Plans; or
(iv) subsequent to a Change in Control of the
Corporation and without the Executive's express written
consent, the Corporation's requiring him to be based
anywhere other than his present office location, except
for required travel on the Corporation's business to an
extent substantially consistent with his present business
travel obligations; or
(v) subsequent to a Change in Control of the
Corporation, the failure by the Corporation to continue in
effect any benefit or compensation plan, stock ownership
plan, stock purchase plan, stock option plan, life
insurance plan, health and accident plan or disability
plan in which the Executive is participating at the time
of Change in Control of the Corporation (or plans
providing him with substantially similar benefits), the
taking of any action by the Corporation which would
adversely affect the Executive's participation in or
materially reduce his benefits under any of such plans or
deprive him of any material fringe benefit enjoyed by him
at the time of the Change in Control, or the failure by
the Corporation to provide him with the number of paid
vacation days to which he is then entitled in accordance
with the Corporation's normal vacation policy in effect on
the date hereof; or
(vi) subsequent to a Change in Control of the
Corporation, the failure by the Corporation to obtain the
assumption of the agreement to perform this Agreement by
any successor as contemplated in Section 7 hereof.
For purposes of this subsection (e), "reasonable determinations" shall
be made by an affirmative vote of at least 50% of the individuals who
are both (A) members of the Board
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immediately prior to the applicable Change of Control, and (B) members
of the board of directors of the successor entity by which the
Executive is employed immediately prior to his resignation. If no
individual is described in both (A) and (B) above, then "reasonable
determinations" shall be made at the sole discretion of the Executive.
5. Trade Secrets. It is recognized that the Corporation and the Bank
have acquired and developed and will continue to acquire and develop techniques,
plans, processes, computer programs, and lists of customers and their particular
requirements which may pertain to Bank related services and equipment, and
related trade secrets, know-how, research and development, which are proprietary
and confidential in nature and are and will continue to be of unique value to
the Corporation and the Bank and its business (all hereinafter referred to as
"Confidential Information"). All Confidential Information known or in the
possession of Executive shall be kept and maintained by him as confidential and
proprietary to the Corporation and the Bank. The Executive shall not disclose
any Confidential Information at any time directly or indirectly, in any manner
to any person or firm, except to other employees of the Corporation and/or the
Bank on a "need to know" basis. Upon termination of his employment for any
reason, the Executive shall without demand therefore deliver to the Corporation
all Confidential Information in his possession. The obligations of this Section
shall survive the termination of this Agreement indefinitely.
6. Covenants Not to Compete
(a) For a period of two (2) years following the termination of
the Executive's employment with the Bank for any reason, Executive
covenants and agrees that he will not at any time directly or indirectly
in any manner or under any circumstances or conditions whatsoever be or
become interested, as an individual, partner, principal, agent, clerk,
employee, stockholder, officer, director, trustee, or in any other
capacity whatsoever, except as a nominal owner of stock of a public
corporation, in any other business in any city or town where the Bank
maintains an office at the time of the Executive's termination that in any
way competes with the business of the Bank as it exists at the time of the
Executive's termination, or engage or participate in, directly or
indirectly (whether as an officer, director, employee, partner,
consultant, holder of an equity or debt investment, lender or in any other
manner or capacity), or lend his name (or any part or variant thereof) to,
any business in any city or town where the Bank maintains an office at the
time of the Executive's termination which is, or as a result of the
Executive's engagement or participation would become, competitive with any
aspect of the business of the Bank as it exists at the time of the
Executive's termination or solicit any officer, director, employee or
agent of the Bank or any subsidiary or affiliate of the Bank to become an
officer, director, employee or agent of the Executive, his respective
affiliates or anyone else; ownership, in the aggregate, of less than one
percent (1%) of the outstanding shares of capital stock of any corporation
with one or more classes of its capital stock listed on a national
securities exchange or publicly traded in the over-the-counter market
shall not constitute a violation of the foregoing provision.
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(b) The Executive hereby acknowledges that his services are
unique and extraordinary, and are not readily replaceable, and hereby
expressly agrees that the Bank, in enforcing the covenants contained in
Sections 5 and 6, in addition to any other remedies provided for herein or
otherwise available at law, shall be entitled in any court of equity
having jurisdiction to an injunction restraining him in the event of a
breach, actual or threatened, of the agreements and covenants contained in
these Sections.
(c) The parties hereto believe that the restrictive covenants
of these Sections are reasonable. However, if at any time it shall be
determined by any court of competent jurisdiction that these Sections or
any portion of them as written, are unenforceable because the restrictions
are unreasonable, the parties hereto agree that such portions as shall
have been determined to be unreasonably restrictive shall thereupon be
deemed so amended as to make such restrictions reasonable in the
determination of such court, and the said covenants, as so modified, shall
be enforceable between the parties to the same extent as if such
amendments had been made prior to the date of any alleged breach of said
covenants.
(d) The provisions of this Section 6 shall not apply following
the Executive's termination of employment with the Bank, if the Executive
is not entitled to payment pursuant to this Agreement as a result of such
termination.
7. Successors. This Agreement shall be binding upon and inure to the
benefit of the Executive and his estate, and the Corporation and any successors
of the Corporation, but neither this Agreement nor any rights arising hereunder
may be assigned or pledged by the Executive.
8. Miscellaneous. This Agreement represents the entire agreement
between the parties with respect to the subject matter of this Agreement and
specifically supersedes any and all oral or written agreements on its subject
matter previously entered into by the parties, including without limitation the
Change in Control Agreement, dated as of May 1, 1995, between the Bank, the
Corporation and the Executive.
9. Severability. Any provision in this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability without invalidating or affecting the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not be invalidate or render unenforceable such provision in
any other jurisdiction.
10. Controlling Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of New
York.
-7-
11. Term of Agreement.
(a) The initial term of this Agreement shall commence as of
March 31, 1998 and shall continue through December 31, 1999, unless
earlier terminated as provided herein. Thereafter, this Agreement shall be
renewed for additional one year periods, unless either party gives written
notice of non-renewal of this Agreement to the other party at least ninety
(90) days prior to the expiration of the initial term or any renewal term;
provided, however, that in no case shall this Agreement terminate; (i)
within 24 months after the occurrence of a Change of Control, or (ii)
during any period of time when the Corporation has knowledge that any
person or group (such terms are defined in Section 4(a)(ii) above) has
taken steps reasonably calculated to effect a Change in Control until, in
the opinion of the Board, such person or group has abandoned or terminated
his or its efforts to effect a Change of Control. Any determination by the
Board that such person or group has abandoned or terminated his or its
efforts to effect a Change of Control shall be conclusive and binding as
the Executive.
(b) Notwithstanding any provisions of this Agreement, this
Agreement shall not confer upon the Executive the right to be retained in
the service of the Corporation (including the Bank) nor limit the right of
the Corporation or the Bank to discharge or otherwise deal with the
Executive. It is the express understanding of the Executive, the
Corporation and the Bank that the Executive's employment shall at all
times be "at will", notwithstanding any provisions of this Agreement.
Accordingly, the Executive or the Corporation and Bank may terminate the
Executive's employment with the Bank at any time for any reason.
-8-
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date specified in the first paragraph of this Agreement.
CNB FINANCIAL CORP.
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------
XxxXxxx X. Xxxxxxxx, Chair
Executive Committee
CENTRAL NATIONAL BANK, CANAJOHARIE
By: /s/ XXXXXX X. BRASS
------------------------------
Xxxxxx X. Brass, President
EXECUTIVE:
/s/ XXXXXX X. BRASS
------------------------------
Xxxxxx X. Brass
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