EXHIBIT 10.7
AMENDED AND RESTATED AGREEMENT
THIS AGREEMENT is effective as of the 28th day of February 2003, between
Laurel Capital Group, Inc. (the "Corporation"), a Pennsylvania-charted bank
holding company, and Laurel Savings Bank (the "Bank"), a Pennsylvania-charted
savings bank and wholly owned subsidiary of the Corporation (collectively the
"Employers"), and Xxxxx X. Xxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and the
Bank, and the Employers desire to be ensured of the Executive's continued active
participation in the business of the Employers; and
WHEREAS, the Corporation and the Bank first entered into a written
agreement on February 10, 1994 with respect to the employment of the Executive
which agreement was amended from time to time and most recently amended pursuant
to the terms of an Amended and Restated Agreement dated February 28, 2002; and
WHEREAS, the Employers and the Executive believe certain revisions to the
Amended and Restated Agreement are appropriate; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Employers (and not compete against the Employers as set forth herein) and in
consideration of the Executive's agreeing to remain in the employ of the
Employers (and not compete against the Employers as set forth herein), the
parties desire to increase the Executive's compensation and also increase the
severance benefits which shall be due the Executive in the event that his
employment with the Employers is terminated under certain specified
circumstances; and
WHEREAS, Executive is desirous of receiving the increase in compensation
and the increase in severance benefits, and as a condition thereof Executive is
willing and has agreed to abide by and faithfully perform the obligations of
Employee set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings set
forth below for the purposes of this Agreement:
(a) ANNUAL COMPENSATION. The Executive's "Annual Compensation" for
purposes of this Agreement shall be deemed to mean the highest level of Base
Salary and bonus paid to the Executive by the Employers or any subsidiary
thereof during the calendar year in which the Date of Termination occurs
(determined on an annualized basis) or either of the two calendar years
immediately preceding the calendar year in which the Date of Termination occurs.
(b) BASE SALARY. "Base Salary" shall have the meaning set forth in Section
3(a) hereof.
(c) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
For purposes of this subparagraph, no act or failure to act on the Executive's
part shall be considered "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Employers.
(d) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any successor thereto, whether or not the Corporation is registered
under the Exchange Act; provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation or the Bank representing 25% or
more of the combined voting power of the Corporation's or the Bank's then
outstanding securities; or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation or the Bank cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at least two thirds
of the directors then still in office who were directors at the beginning of the
period.
(e) CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(g) DISABILITY. Termination by the Employers of the Executive's employment
based on "Disability" shall mean termination because of any physical or mental
impairment which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
change in Control of the Corporation based on:
(i) Without the Executive's express written consent, the failure to
elect or to re-elect or to appoint or to re-appoint the Executive to
the offices of President and Chief Executive Officer of the
Employers or a material adverse change made by the Employers in the
Executive's functions, duties or responsibilities as President and
Chief Executive Officer of the Employers immediately prior to a
Change in Control of the Corporation;
(ii) Without the Executive's express written consent, a reduction by the
Employers in the Executive's Base Salary as the same may be
increased form time to time or, except to the extent permitted by
Section 3(b) hereof, a reduction in the package of fringe benefits
provided to the Executive, taken as a whole;
(iii) The principal executive office of the Employers is relocated outside
of the Pittsburgh, Pennsylvania metropolitan area or, without the
Executive's express written consent, the Employers require the
Executive to be based anywhere other than an area in which the
Employer's principal executive office is located, except for
required travel on business of the Employers to an extent
substantially consistent with the Executive's present business
travel obligations;
(iv) Any purported termination of the Executive's employment for Cause,
Disability or Retirement which is not effected pursuant to a Notice
of Termination satisfying the requirements of paragraph (j) below;
or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as contemplated
in Section 13 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by a written "Notice
of Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less that thirty (30) nor
more that ninety (90) days after such Notice of Termination is given, except in
the case of the Employer's termination of Executive's employment for Cause; and
(iv) is given in the manner specified in Section 14 hereof.
(k) RETIREMENT. Termination by the Employers of the Executive's employment
based on "Retirement" shall mean voluntary termination by the Employee in
accordance with the Employers' retirement policies, including early retirement,
generally applicable to their salaried employees.
2. TERM OF EMPLOYMENT.
(a) The Employers hereby employ the Executive as President and Chief
Executive Officer of the Corporation and President and Chief Executive Officer
of the Bank and Executive hereby accepts said employment and agrees to render
such services to the Employers on the terms and conditions set forth in this
Agreement. The term of employment under this Agreement shall be for three years,
commencing on the effective date of this Agreement and, subject to the
requirements of the succeeding sentence, shall be deemed automatically, without
further action, to extend for an additional year on each annual anniversary of
the date of this Agreement. Prior to the anniversary of the date of this
Agreement and each annual anniversary thereafter, the Boards of Directors of the
Employers shall consider and review (with appropriate corporate documentation
thereof, and after taking into account all relevant factors, including the
Executive's performance hereunder) extension of the term under this Agreement,
and the term shall continue to extend in the manner set forth above unless
either the Boards of Directors does not approve such extension and provides
written notice to the Executive of such event or the Executive gives written
notice to the Employers of the Executive's election not to extend the term, in
each case with such written notice to be given not less than thirty (30) days
prior to any such anniversary date. References herein to the term of this
Agreement shall refer both to the initial term and successive terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as may be consistent with his titles and
from time to time assigned to him by the Employers' Boards of Directors.
3. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay Executive for his services
during the term of this Agreement at a minimum base salary of $186,000 per year
("Base Salary"), which may be increased from time to time in such amounts as may
be determined by the Boards of Directors of the Employers, and may not be
decreased without the Executive's express written consent. In addition to his
Base Salary, the Executive shall be entitled to receive during the term of this
Agreement such bonus payments as may be determined by the Boards of Directors of
the Employers.
(b) During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change in the rights of or
benefits to Executive as compared with any other executive officer of the
Employers. 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 3(a) hereof.
(c) During the term of this Agreement, Executive shall be entitled to paid
annual vacation in accordance with the policies as established from time to time
by the Boards of Directors of the Employers, which in no event shall be less
than four weeks per annum. Executive shall not be entitled to receive any
additional compensation from the Employers for failure to take a vacation.
Executive shall be able to accumulate unused vacation time from one year to the
next, not to exceed eight (8) weeks.
(d) During the term of this Agreement, including any renewal thereof, the
Employers shall provide the Executive with a full-sized, four-door automobile
for the Executive's use, which automobile shall be replaced during the term
hereof and any renewal thereof no less frequently than every three years. The
Executive may purchase the Employers-provided automobile at fair market value.
(e) During the term of this Agreement, the Employers shall provide medical
coverage for the benefit of the Executive and his spouse until the Executive and
his spouse shall have attained the age of 65. In the event of the death of the
Executive prior to attaining age 65, the Employers shall pay to the Executive's
spouse a monthly payment equal to the premium to continue medical coverage
pursuant to the Consolidated Omnibus Medical Coverage Act of 1985, as amended
("COBRA") (or payment for similar coverage after the expiration of said spouse's
COBRA rights) until such spouse is eligible for state or federal government
subsidized medical benefits; but in no event shall such spouse be entitled to
said payment after attaining age 65 or if such spouse has obtained equivalent
medical coverage from another source.
4. EXPENSES. The Employers shall reimburse Executive or otherwise provide
for or pay for all reasonable expenses incurred by Executive in furtherance or
in connection with the business of the Employers, including, but not by way of
limitation, automobile and traveling expenses, and all reasonable entertainment
expenses (whether incurred at the Executives' residence, while traveling or
otherwise), subject to such reasonable documentation and other limitations as
may be established by the Boards of Directors of the Employers. If such expenses
are paid in the first instance by the Executive, the Employers shall reimburse
the Executive therefor.
5. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice of
Termination to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and the Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by the
Employers for Cause, Disability or Retirement or in the event of the Executive's
death, or (ii) Executive terminates his employment hereunder other than for Good
Reason, the Executive shall have no
right pursuant to the terms of this Agreement to compensation or other benefits
for any period after the applicable Date of Termination except as otherwise
provided herein.
(c)(i) In the event that the Executive's employment is terminated by the
Employers for other than Cause, Disability, Retirement or the Executive's death,
or such employment is terminated by the Executive due to a material breach of
this Agreement by the Employers which has not been cured within fifteen (15)
days after a written notice of non-compliance has been given by the Executive to
the Employers, and as of the Executive's Date of Termination no Change in
Control of the Corporation has occurred, no written agreement which contemplated
a Change in Control of the Corporation and which still is in effect has been
entered into by either or both of the Employers and no discussions and/or
negotiations are being conducted which relate to the same, then the Employers
shall, subject to the provisions of Section 6 hereof, if applicable:
(A) pay to the Executive, in monthly installments beginning with
the first business day of the month following the Date of
Termination, an aggregate cash severance amount equal to the amount
of the Executive's Annual Compensation divided by 12 and multiplied
by the number of months remaining under the term of the Agreement
(as such term may have been extended pursuant to Section 2(a)) had
the Executive's employment not been terminated. Provided, that the
aggregate cash severance amount payable under this subparagraph (A)
shall not exceed 2.99 times the Executive's Annual Compensation.
Provided further, that said payments shall be made over the number
of months remaining under the term of the Agreement (as such term
may have been extended pursuant to Section 2(a)) had the Executive's
employment not been terminated.
(B) For a period ending at the earlier of (i) the expiration of
twelve (12) months from the Executive's Date of Termination or (ii)
the date of the Executive's full-time employment by another employer
(provided that the Executive is entitled under the terms of such
employment to benefits substantially similar to those covered by
this subparagraph (B), at same relative cost to the Executive as
paid thereby prior to the Date of Termination), Employers shall make
a monthly payment to Executive in an amount equal to the greater of
$1,500 or the aggregate amount of premium paid by Executive during
said month for coverage under those plans and programs for which
Executive made an election to continue coverage pursuant to COBRA.
(C) At the election of Executive, the severance amount required to
be paid to the Executive under subparagraph (A) above may be paid to
the Executive in a lump sum within five (5) days of the Date of
Termination.
(ii) In the event that the Executive's employment is terminated by the
Employers for other than Cause, Disability, Retirement or the Executive's death,
or such employment is terminated by the Executive due to a material breach of
this Agreement by the employers which has not been cured within fifteen (15)
days after written notice of non-compliance has been given
by the Executive to the Employers or for Good Reason, and on or prior to the
Executive's Date of Termination there has been a Change in Control of the
Corporation or a written agreement which contemplates a Change in Control of the
Corporation and which still is in effect has been entered into by either or both
of the Employers or discussions and/or negotiations are being conducted by
either of such entities which relate to the same, then the Employers shall,
subject to the provisions of Section 6 hereof, if applicable:
(A) pay to the Executive, in thirty-six (36) equal monthly
installments beginning with the first business day of the month
following the Date of Termination, an aggregate cash severance
amount equal to 2.99 times the Executive's Annual Compensation, and
(B) For a period ending at the earlier of (i) the expiration of
thirty-six (36) months from the Executive's Date of Termination or
(ii) the date of the Executive's full-time employment by another
employer (provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those covered
by this subparagraph (B), at the same relative cost to the Executive
as paid thereby prior to the Date of Termination), Employers shall
make a monthly payment to Executive in an amount equal to the
greater of $1,500 or the aggregate amount of premium paid by
Executive during said month for coverage under those plans and
programs for which Executive made an election to continue coverage
pursuant to COBRA (or similar plans and programs after the
expiration of Executive's COBRA rights).
(C) At the election of Executive, more than 90 days before a change
in control of the Corporation, the severance amount required to be
paid to the Executive under subparagraph (A) above may be paid to
the Executive in the manner he elects using the form attached as
Exhibit A.
(D) At any time not later than 10 business days after a Change in
Control of the Corporation, the Employers shall (i) establish a
grantor trust (the "Trust") that has terms consistent with Revenue
Procedure 9264 and has a corporate trustee reasonably acceptable to
the Executive (ii) contribute to the Trust an amount that the
Employers and the Executive reasonably project to be sufficient to
fund the payment of all benefits that are or may become payable
pursuant to any subsection of Section 5 (a)(ii) of this Agreement,
(iii) provide the Trust with a written direction to both hold said
amount and any investment return thereon in a segregated account for
the benefit of the Executive, and (iv) authorize the trustee to
distribute Trust assets to the Executive in accordance with the
Executive's written election on the form attached as Exhibit A. Upon
the Trust's final payment of all amounts due under this Agreement,
the trustee shall pay to the Employers the entire balance remaining
in the segregated account maintained for the benefit of the
Executive. The Executive shall thereafter have no further interest
in the Trust.
6. PAYMENT OF ADDITIONAL BENEFITS UNDER CERTAIN CIRCUMSTANCES.
(a) If the payments and benefits pursuant to Section 5 hereof, either
alone or together with other payments and benefits which the Executive has the
right to receive from the Employers would constitute a "parachute payment" as
defined in Section 280G(b)(2) of the Code (the "Initial Parachute Payment"),
then the Employers shall pay to the Executive, in either thirty-six (36) equal
monthly installments beginning with the first business day of the month
following the Date of Termination or in a lump sum as of the Date of Termination
(at the Executive's election), a cash amount equal to the sum of the following:
(A) twenty (20) percent (or such other percentage equal to the tax
rate imposed by Section 4999 of the Code) of the amount by which the
Initial Parachute Payment exceeds the Executive's "base amount" from
the Employers, as defined in Section 280G(b)(3) of the Code, with
the difference between the Initial Parachute Payment and the
Executive's base amount being hereinafter referred to as the
"Initial Excess Parachute Payment";
(B) such additional amount (tax allowance) as may be necessary to
compensate the Executive for the payment by the Executive of state
and federal income and excise taxes on the payment provided under
clause (A) above. Notwithstanding the preceding sentence, the
Executive shall be responsible for the payment of any additional
state and federal income and excise taxes that may be imposed on the
payment of the tax allowance under this paragraph. In computing such
tax allowance, the payment to be made under clause (A) above shall
be multiplied by the "gross up percentage" ("GUP"). The GUP shall be
determined as follows:
Tax Rate
GUP = _______________
1 - Tax Rate
The Tax Rate for purposes of computing the GUP shall be the highest
marginal federal and state income and employment-related tax rate,
including any applicable excise tax rate, applicable to and payable
by the Executive in the year in which the payment under clause (A)
above is made.
(b) Notwithstanding the foregoing, if it shall subsequently be determined
in a final judicial determination or a final administrative settlement to which
the Executive is a party that the actual excess parachute payment as defined in
Section 280G(b)(l) of the Code is different from the Initial Excess Parachute
Payment (such different amount being hereafter referred to as the "Determinative
Excess Parachute Payment"), then the Employers' independent tax counsel or
accountants shall determine the amount (the "Adjustment Amount") which either
the Executive must pay to the Employers or the Employers must pay to the
Executive in order to put the Executive (or the Employers, as the case may be)
in the same position the Executive (or the Employers, as the case may be) would
have been if the Initial Excess Parachute Payment had
been equal to the Determinative Excess Parachute Payment. In determining the
Adjustment Amount, the independent tax counsel or accountants shall take into
account any and all taxes (including any penalties and interest) paid by or for
the Executive or refunded to the Executive or for the Executive's benefit. As
soon as practicable after the Adjustment Amount has been so determined, the
Employers shall pay the Adjustment Amount to the Executive or the Executive
shall repay the Adjustment Amount to the Employers, as the case may be.
(c) In each calendar year that the Executive receives payments of benefits
under this Section 6, the Executive shall report on his state and federal income
tax returns such information as is consistent with the determination made by the
independent tax counsel or accountants of the Employers as described above.
Provided that the Executive reports such information in accordance with the
Employers' written directions, the Employers shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys' fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information. The
Executive shall promptly notify the Employers in writing whenever the Executive
receives notice of the institution of a judicial or administrative proceeding,
formal or informal, in which the federal tax treatment under Section 4999 of the
Code of any amount paid or payable under this Section 6 is being reviewed or is
in dispute. The Employers shall assume control at their expense over all legal
and accounting matters pertaining to such federal tax treatment (except to the
extent necessary or appropriate for the Executive to resolve any such proceeding
with respect to any matter unrelated to amounts paid or payable pursuant to this
Section 6) and the Executive shall cooperate fully with the Employers in any
such proceeding. The Executive shall not enter into any compromise or settlement
or otherwise prejudice any rights the Employers may have in connection therewith
without the prior written consent of the Employers.
7. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor, except as
otherwise provided herein, shall the amount of any such benefits be reduced by
any compensation earned by the Executive as a result of employment by another
employer after the Date of Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefits plans
of the Employers or otherwise.
8. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. ACKNOWLEDGEMENTS OF THE EXECUTIVE. Executive acknowledges that:
(a) The Employers have conferred the benefit of an increase in annual
compensation and an increase in severance benefits upon the Executive because
and on condition of Executive's willingness to commit Executive's best efforts
and loyalty to the Employers including abiding by the confidentiality and
noncompetition provisions, as well as the other provisions hereof;
(b) In the event of any violation of Sections 10 or 11 of this Agreement
by Executive, monetary damages alone will be inadequate to compensate the
Employers and the Employers will be entitled to injunctive relief against
Executive in addition to any other remedies provided by law or in equity; and
(c) The Executive hereby acknowledges that the Executive has read and
fully understands the Executive's duties and obligations as set forth in
Sections 10 and 11 and that by virtue of the Executive's background and
experience such duties and obligations would not unduly restrict the Executive's
legitimate efforts to earn a livelihood following any termination of the
Executive's employment with the Employers.
10. CONFIDENTIALITY.
(a) Executive recognizes and acknowledges that during Executive's term of
employment with the Employers, Executive has had and will have access to, has
been and will be provided with and, in some cases, has prepared or will prepare
certain confidential and proprietary business information and trade secrets of
the Employers, including but not limited to business plans and information all
of which are of substantial value to the Employers in their business.
(b) Executive understands and agrees that if, during the term of
employment or at any time thereafter, Executive discloses to third parties, uses
for Executive's own benefit or for the benefit of third parties, or copies or
makes notes of any of the aforementioned confidential and proprietary
information and trade secrets (except as may be required by Executive's duties
with the Employers), such conduct shall constitute a breach of the confidence
and trust bestowed upon the Executive by the Employers and the Executive herein
expressly agrees that injunctive relief, in addition to any other remedies
provided by law or in equity, shall be necessary and appropriate in the event of
such conduct by the Executive.
(c) Executive agrees not to use or cause to be used for Executive's own
benefit or for the benefit of any third parties or to disclose to any third
party in any manner, directly or indirectly, any information of a confidential
or proprietary nature, trade secrets or any other knowledge or information,
except that which is public knowledge, of or relating to the business of the
Executive at any time during or after the Executive's employment with the
Employers without the express prior written consent of the Employers.
(d) The Executive agrees to return to the Employers either before or
immediately upon the termination of the Executive's employment with the
Employers any and all written
information, materials or equipment which constitutes, contains or relates in
any way to proprietary or confidential information or trade secrets of the
Employers, as well as any other documents, equipment and materials of any kind
relating in any way to the business of the Employers which are or may be in the
possession, custody or control of the Executive which are or may be the property
of the Employers whether confidential or not, including any and all copies
thereof which may have been made by or for Executive.
(e) The Executive agrees that, during the Executive's term of employment
with the Employers and thereafter, and except as may be required in the
performance of the Executive's duties with the Employers, the Executive will not
utilize for the Executive's own benefit or that of any third party and will not
use or disclose to any third party the Executive's knowledge of or any
information concerning the internal organization or business structure of the
Employers or the work assignments or capabilities of any officer and/or employee
of the Employers without the express prior written consent of the Employers.
11. NONCOMPETITION AGREEMENT. The Executive agrees that:
(a) During the Executive's term of employment with the Employers, the
Executive will not compete in any way with the Employers, directly or
indirectly, and will not consult with or have any interest in any business,
firm, person, partnership, corporation or other entity, whether as employee,
officer, director, agent, security holder, creditor, consultant or otherwise,
which competes with the Employers, directly or indirectly, in any aspect of the
business of the Employers; provided, however, that this Section 11 shall not be
deemed to prevent Executive's mere ownership of 5 % or less of the capital stock
of any publicly held entity.
(b) During the period of six (6) months following the termination of the
Executive's employment with the Employers, the Executive, without the express
prior written consent of the Employers, will not consult with, accept employment
with or have any interest in any business, firm, person, partnership,
corporation or other entity which competes, directly or indirectly, with the
Employers.
(c) The Executive acknowledges and agrees that such businesses which
compete with the Employers include, without limitation, those businesses which
provide banking and lending services in the Commonwealth of Pennsylvania.
(d) The Executive agrees that for six (6) months following the termination
of his employment with the Employers, Executive shall not directly or indirectly
solicit or induce, or attempt to solicit or induce, any employee of the
Employers to leave such employ for any reason whatsoever or directly or
indirectly solicit the trade of or trade with any customers of the Employers.
(e) For a period of six (6) months following the termination of his
employment with the Employers, Executive agrees to inform any subsequent
employer in any competing business and other entities in any competing business
for whom Executive performs services, prior to accepting Executive's employment
or engagement, of the existence of this Agreement and the
restrictions hereunder and to inform the Employers, upon the acceptance of
employment or engagement in any competing business, of the identity of
Executive's new employer, the nature of such new employer's business and
Executive's new position, duties and responsibilities.
(f) The Executive expressly agrees (i) in the event of a violation of
these noncompetition provisions by the Executive, monetary damages alone will be
inadequate to compensate the Employers and the Employers will be entitled to
injunctive relief against the Executive in addition to any other remedies
provided by law or in equity and (ii) that the noncompetition obligations
contained herein shall be extended by the length of time during which the
Executive shall have been in breach thereof.
12. SEVERABILITY. If any term, provision, paragraph or section of this
Agreement shall be determined by a court of competent jurisdiction to be invalid
or unenforceable for any reason, such determination shall not effect the
remaining terms, provisions or paragraphs or sections of this Agreement which
shall continue to be given full force and effect. If any term, provision,
paragraph or section of this Agreement shall be determined by a court of
competent jurisdiction to be unenforceable because of the duration thereof or
the geographical area included therein, the parties hereby expressly agree that
the court making such determination shall have the power to reduce the duration
and/or restrict the geographical areas of such term, provision, paragraph or
section and/or to delete such specific works or phrases which the court shall
deem necessary to permit enforcement of such term, provision, paragraph or
section in restricted form. Should any court of competent jurisdiction find any
term, provision, paragraph or section of this Agreement invalid or
unenforceable, or enforceable only in restricted form, then any such finding
shall apply only to the jurisdiction of such Court and shall not serve to alter
or amend this Agreement in any other jurisdiction.
13. ASSIGNABILITY. The Employers may assign this Agreement and their
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
their assets, if in any such case said corporation, bank or other entity shall
by operation of laws or expressly in writing assume all obligations of the
Employers hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or its rights and obligations
hereunder. The Executive may not assign or transfer this Agreement or any rights
or obligations hereunder.
14. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Chairman of the Board
Laurel Capital Group, Inc.
0000 Xxxxx Xxx Xxxx
Xxxxxxx Xxxx, Xxxxxxxxxxxx 00000
To the Executive: Xxxxx X. Xxxx
0000 Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
15. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
their behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
16. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the Commonwealth of
Pennsylvania. Any actions brought with respect to this Agreement or performance
of services hereunder may be brought only in the state or federal courts of
Allegheny County, Pennsylvania and the parties consent to the jurisdiction and
venue therein.
17. NATURE OF OBLIGATIONS. To the extent that the Executive acquires a
right to receive benefits from the Employers hereunder, such right shall be no
greater than the right of any unsecured general creditor of the Employers.
18. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
20. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. Section
1828(k)) and any regulations promulgated thereunder, including 12 C.F.R. Part
359.
21. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between
the Employers and the Executive with respect to the matters agreed to herein.
All prior agreements between the Employers and the Executive with respect to the
matters agreed to herein are hereby superseded and shall have no force or
effect.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
Attest: LAUREL CAPITAL GROUP, INC.
______________________________ By: _______________________________
Xxxx X. Xxxxxx, Xx., Secretary Xxxxxxx X. Xxxxxx
Chairman of the Board
Attest: LAUREL SAVINGS BANK
______________________________ By: _______________________________
Xxxx X. Xxxxxx, Xx., Secretary Xxxxxxx X. Xxxxxx
Chairman of the Board
Witness:
______________________________ By: _______________________________
Xxxxx X. Xxxx
XXXXXX CAPITAL GROUP, INC.
LAUREL SAVINGS BANK
EMPLOYMENT AGREEMENT
Special Election of Payment Method
After a Change in Control
AGREEMENT, made this _______________day of _______________________, by and
between Laurel Capital Group, Inc. (the "Corporation"), Laurel Savings Bank (the
"Bank"), and the undersigned executive (the "Executive") of the Corporation and
the Bank with respect to the payment of severance benefits ("Benefits") to the
Executive pursuant to Section 5(c)(ii)(C) of the Executive's employment
agreement (the "Agreement") with the Corporation and the Bank (the "Employers")
dated ____________________.
NOW THEREFORE, it is mutually agreed as follows:
1. Form of Payment. The Executive's Benefits shall be distributed in cash as
follows:
[ ] in one lump sum payment.
[ ] in substantially equal annual payments over a period of ____________
years (no more than 15).
2. Timing of Payment. Distribution of the Executive's Benefits shall begin as
soon as practicable after -
[ ] a change in control closes.
[ ] the January 1st after a change in control closes.
[ ] the ____________annual anniversary of the January 2nd after a change in
control closes.
3. Frequency of Payment. The Executive shall receive installment payments, if
elected as a form of payment, on a __________monthly,
____________quarterly, __________semi-annual, or ____________annual basis.
4. Form of Payment to Beneficiary. In the event of the Executive's death any
unpaid Benefits shall be distributed to his or her designated
beneficiary -
[ ] in one lump sum payment, determined in the manner described in
paragraphs 1 and 2 hereof.
Exhibit "A"
[ ] in accordance with the payment schedule selected in paragraphs 1, 2, and
3 hereof (with payments made as though the Executive survived to collect
all Benefits, and as though the Executive terminated service on the date
of his or her death, if payments had not already begun).
5. Designation of Beneficiary. In the event of the Executive's death before
he or she has collected all of the Benefits payable under the Agreement,
the Executive hereby directs that any amounts unpaid under the Agreement
be distributed to the beneficiary or beneficiaries designed under
subparagraphs a and b of this paragraph 5 in the manner elected pursuant
to paragraph 4 above:
a. Primary Beneficiary. The Executive hereby designates the person(s)
named below to be his or her primary beneficiary and to receive the balance of
any unpaid Benefits under the Agreement.
Name of Primary
Beneficiary Mailing Address Percentage of Death Benefit
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
b. Contingent Beneficiary. In the event that the primary beneficiary or
beneficiaries named above are not living at the time of the Executive's death,
the Executive hereby designates the following person(s) to be his or her
contingent beneficiary for purposes of the Agreement.
Name of Contingent
Beneficiary Mailing Address Percentage of Death Benefit
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
6. Effect of Election. The elections made in paragraphs 1, 2, and 3 hereof
shall become irrevocable on the date 90 days before the closing of a
change in control. The Executive may, by submitting an effective
superseding Distribution Election Form at any time and from time to time,
prospectively change the beneficiary designation and the manner of payment
to a Beneficiary. Such elections shall, however, become irrevocable upon
the Executives' death.
7. Mutual Commitments. The Employers agree to make payment of all amounts due
the Executive in accordance with the terms of the Agreement and the
elections made by the Executive herein. The Executive agrees to be bound
by the terms of the Agreement, as in effect on the date hereof or properly
amended hereafter. The parties recognize and agree that this Agreement
supercedes and nullifies any prior distribution election to the extent
that it is inconsistent herewith.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and
year first above-written.
Attest: LAUREL CAPITAL GROUP, INC.
______________________________ By: ________________________________________
Xxxx X. Xxxxxx, Xx., Secretary Xxxxxxx X. Xxxxxx
Chairman of the Board
Attest: LAUREL SAVINGS BANK
______________________________ By: ________________________________________
Xxxx X. Xxxxxx, Xx., Secretary Xxxxxxx X. Xxxxxx
Chairman of the Board
Witness:
_______________________________ By:_________________________________________
Xxxxx X. Xxxx
AMENDMENT NUMBER 1
TO THE
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN
LAUREL CAPITAL GROUP, INC.,
LAUREL SAVINGS BANK,
And
XXXXX X. XXXX
WHEREAS, Laurel Capital Group, Inc. (the "Corporation"), a
Pennsylvania-chartered bank holding company, and Laurel Savings Bank (the
"Bank"), a Pennsylvania-chartered savings bank and wholly owned subsidiary of
the Corporation (collectively the "Employers"), and Xxxxx X. Xxxx (the
"Executive") entered into an Amended and Restated Employment Agreement dated
February 28, 2003 (such Agreement referred to hereinafter as the "Agreement");
and
WHEREAS, the Board of Directors of the Employer and Executive desire to
amend the Agreement to reflect certain mutually agreed upon revisions.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the Employers and Executive do hereby agree to amend the Agreement as follows:
1. Section 1(h)(i) of the Agreement is hereby rescinded and deleted and
replaced in its entirety by the following:
1(h)(i) Without the Executive's express written consent, the failure to
elect or to re-elect or to appoint or to re-appoint the Executive to the
offices of President and Chief Executive Officer of the Employers or a
material adverse change made by the Employers in the Executive's
functions, duties or responsibilities as President and Chief Executive
Officer of the Employers immediately prior to a Change in Control of the
Corporation or the assignment by the Employers to the Executive of any
duties which are materially inconsistent with the Executive's positions,
duties, responsibilities and status with the Employers immediately prior
to a Change in Control of the Corporation;
2. The first paragraph of Section 5(c)(ii) of the Agreement is hereby
rescinded and deleted in its entirety and replaced by the following:
5(c)(ii) In the event that the Executive's employment is terminated by the
Employers for other than Cause, Disability, Retirement or the Executive's
death, or such employment is terminated by the Executive due to a material
breach of this Agreement by the Employers which has not been cured within
fifteen (15) days after written notice of non-compliance has been given by
the Executive to the Employers or for Good Reason or by the Executive for
any reason within the first sixty (60) days following the one year
anniversary of the Change in Control of the Corporation, and on or prior
to the
Executive's Date of Termination there has been a Change in Control of the
Corporation or a written agreement which contemplates a Change in Control
of the Corporation and which still is in effect has been entered into by
either or both of the Employers or discussions and/or negotiations are
being conducted by either of such entities which relate to the same, then
the Employers shall, subject to the provisions of Section 6 hereof, if
applicable:
3. Section 2(a) of the Agreement is hereby rescinded and deleted in its
entirety and replaced by the following:
(a) The Employers hereby employ the Executive as President and Chief
Executive Officer of the Corporation and President and Chief Executive
Officer of the Bank and Executive hereby accepts said employment and
agrees to render such services to the Employers on the terms and
conditions set forth in this Agreement. The term of employment under this
Agreement shall commence on February 28, 2004 and shall continue until
February 28, 2007. Subject to the requirements of the succeeding sentence,
commencing July 1, 2004 ("Renewal Date") and on each July 1st thereafter,
the term of this Agreement shall be deemed automatically, without further
action, to extend for an additional year. Prior to the anniversary of the
Renewal Date and each annual anniversary thereafter, the Boards of
Directors of the Employers shall consider and review (with appropriate
corporate documentation thereof, and after taking into account all
relevant factors, including the Executive's performance hereunder)
extension of the term under this Agreement, and the term shall continue to
extend in the manner set forth above unless either the Boards of Directors
do not approve such extension and provide written notice to the Executive
of such event or the Executive gives written notice to the Employers of
the Executive's election not to extend the term, in each case with such
written notice to be given not less than thirty (30) days prior to any
such anniversary date of the \Renewal Date. References herein to the term
of this Agreement shall refer both to the initial term and successive
terms.
4. All other sections and provisions in the Agreement shall continue in full
force and effect and are incorporated by reference into this Amendment No. 1
except that the compensation of Executive shall be that amount which is
presently in effect as determined by the Board of Directors of the Employer and
not the initial compensation referred to in Section 3(a) of the Agreement.
This Amendment No. 1 to the Agreement shall be deemed effective as of
February 28, 2004.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
No. 1 to the Agreement as of this _____ day of ________ 2004.
ATTEST: LAUREL CAPITAL GROUP, INC.
_________________________________ By:_______________________________
Witness Title:____________________________
ATTEST: LAUREL SAVINGS BANK
_________________________________ By:_______________________________
Witness Title:____________________________
EXECUTIVE
_________________________________ __________________________________
Witness Xxxxx X. Xxxx
