Exhibit 10
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is effective as of the
31st day of October 2006, between Harleysville Savings Financial Corporation, a
Pennsylvania corporation (the "Corporation"), Harleysville Savings Bank, a
Pennsylvania-chartered stock savings bank (the "Bank") and a wholly owned
subsidiary of the Corporation (collectively the "Employers"), and Xxxxxx 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;
WHEREAS, the Bank entered into a written agreement on May 1, 1987 with
respect to the employment of the Executive (the "Prior Agreement");
WHEREAS, the Employers and the Executive believe certain revisions to
the Prior Agreement are appropriate, including amending and restating the Prior
Agreement in its entirety as hereinafter set forth in order to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code"), including the guidance issued to date by the Internal Revenue
Service (the "IRS") and the proposed regulations issued by the IRS in the fall
of 2005; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to increase the severance benefits
which shall be due to the Executive in the event that his employment with the
Employers is terminated under certain specified circumstances.
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 average aggregate annual
compensation paid to the Executive and includible in the Executive's gross
income for federal income tax purposes during the five calendar years preceding
the 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; provided that any act or omission to act on the
Executive's behalf in reliance upon an opinion of counsel to the Bank or counsel
to the Executive shall not be deemed to be willful.
(d) Change in Control of the Corporation. "Change in Control of the
Corporation" shall mean a change in the ownership of the Corporation or the
Bank, a change in the effective control of the Corporation or the Bank or a
change in the ownership of a substantial portion of the assets of the
Corporation or the Bank as provided under Section 409A of the Code and the
regulations thereunder.
(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. "Disability" shall mean the Executive (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering employees of the Bank.
(h) Good Reason. "Good Reason" shall mean termination by the Executive
of the Executive's employment within twenty-four (24) months following a change
in Control of the Corporation based on:
(i) Without the Executive's express written consent, any
failure after January 23, 2007 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;
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(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 from 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 more than 25 miles from its current
location in Harleysville, Pennsylvania 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.
(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 the Executive's employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than 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 the Executive's employment for
Cause; and (iv) is given in the manner specified in Section 13 hereof.
(k) Retirement. "Retirement" shall mean voluntary termination by the
Executive of the Executive's employment in accordance with the Employers'
retirement policies, including early retirement, generally applicable to their
salaried employees.
2. Term of Employment.
(a) Through January 23, 2007, the Executive shall serve as President
and Chief Operating Officer of the Corporation and of the Bank and for the
remainder of the term subsequent to January 23, 2007, the Executive shall serve
as President and Chief Executive Officer of the Corporation and of the Bank. The
Executive hereby accepts said employment and agrees to render such services to
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the Employers on the terms and conditions set forth in this Agreement. The term
of employment under this Agreement shall be for five years commencing on May 1,
2006 and, upon approval of the Board of Directors of each of the Employers,
shall automatically extend for an additional year on each May 1 such that at any
time the remaining term of this Agreement shall be from four to five years
unless the Executive gives written notice to the Employers of the Executive's
election not to extend the term, with such written notice to be given not less
than forty-five (45) days prior to any such May 1. If the Board of Directors of
either of the Employers elects not to extend the term, it shall give written
notice of such decision to the Executive not less than forty-five (45) days
prior to any such May 1. If any party gives timely notice that the term will not
be extended as of any May 1, then this Agreement shall terminate at the
conclusion of its remaining term. 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.
(c) The Executive shall be nominated to be a member of the Board of
Directors of the Corporation, and shall be a member of the Board of Directors of
the Bank, as long as the Executive remains an employee in good standing and/or
has not violated any of the terms and provisions of this Agreement. Termination
of employment for any reason shall be deemed to be a resignation from the Board
of Directors of the Corporation and from the Board of Directors of the Bank.
3. Compensation and Benefits.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $167,500
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 this Agreement, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing plan, stock option plan, employee stock ownership
plan, welfare and fringe benefit arrangements, or such other employee benefit
plans, programs, policies, benefits, arrangements 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 the 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 the Executive as compared
with any other executive officer of the Employers. Nothing paid to the 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 the Executive
pursuant to Section 3(a) hereof.
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(c) During the term of this Agreement, the 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. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Employers' vacation policies or by the Boards of Directors of the Employers.
4. Expenses. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of 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 Executive's
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) the 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 in Section 5(c)
herein.
(c) In the event the Executive's employment hereunder is terminated due
to Disability, the Executive shall be entitled to receive the following
percentages of his Base Salary for the following periods of his Disability: (i)
100% for the first six months (which shall not be paid until the first day of
the month following the lapse of six months after the Date of Termination), 75%
for the next twelve months, and 60% thereafter for the remaining term of this
Agreement. Upon returning to active duties, the Executive's full compensation as
set forth in this Agreement shall be reinstated. In the event that the Executive
returns to active employment on other than a full-time basis, then his Base
Salary shall be reduced in proportion to the time spent in said employment.
There shall be deducted from the amounts paid to the Executive hereunder during
any period of disability any amounts actually paid to the Executive pursuant to
any disability insurance or other similar program which the Bank has instituted
or may institute on behalf of its employees for the purpose of compensating the
Executive in the event of a Disability, including workmen's compensation
benefits and Social Security disability benefits. The Executive shall have the
duty to apply for such benefits and shall provide to the Bank the right to set
off from any amounts so received the amount of payments made hereunder.
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(d) If the Executive's employment shall be terminated prior to a Change
in Control of the Corporation by (i) the Employers for other than Cause,
Disability, Retirement or the Executive's death or (ii) the Executive due to a
material breach of this Agreement by the Employers, which breach has not been
cured within twenty (20) days after a written notice of non-compliance has been
given by the Executive to the Employers, then the Employers shall:
(A) pay to the Executive, within thirty (30) days following
the Date of Termination, a lump sum cash severance amount equal to the
product of the Base Salary multiplied by the greater of (i) the number
of years (including partial years) remaining in the term of this
Agreement, or (ii) 2.99, with such amount to be discounted to the
present value using a discount rate equal to the applicable federal
rate published by the IRS for the month in which the Date of
Termination occurs; and
(B) maintain and provide for a period ending at the earlier of
(i) the expiration of the remaining term of this Agreement as of the
Date of Termination, (ii) three years following the Date of Termination
or (iii) 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 described in
this subparagraph (b)), with the Executive to pay the costs of such
coverage normally paid by employees of the Employers, the Executive's
continued participation in all group insurance, life insurance, health
and accident insurance, disability insurance and other employee benefit
plans, programs and arrangements offered by the Employers in which the
Executive was entitled to participate immediately prior to the Date of
Termination (excluding (w) the Employers' Employee Stock Ownership Plan
and any other tax-qualified plans, (y) stock option and restricted
stock plans of the Employers and (z) cash incentive compensation
included in Annual Compensation), provided that in the event that the
Executive's participation in any plan, program or arrangement as
provided in this subparagraph (b) is barred, or during such period any
such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Employers shall arrange to
provide the Executive with benefits substantially similar to those
which the Executive was entitled to receive under such plans, programs
and arrangements immediately prior to the Date of Termination. If
substantially similar benefits cannot be provided to the Executive,
then the Employers shall pay to the Executive a cash amount equal to
the cost to the Employers of providing such benefits; provided further,
however, that if the provision of any of the benefits covered by this
Section 5(d)(B) would trigger the 20% tax and interest penalties under
Section 409A of the Code either due to the nature of such benefit or
the length of time it is being provided, then the benefit(s) that would
trigger such tax and interest penalties due to the nature of the
benefit shall not be provided at all and the benefit(s) that would
trigger the tax and interest penalties if provided beyond the "limited
period of time" set forth in the regulations under Section 409A shall
not be provided beyond such limited period of time (collectively, the
"Excluded Benefits"), and in lieu of the Excluded Benefits the
Employers shall pay to the Executive, in a lump sum within 30 days
following termination of employment or within 30 days after such
determination should it occur after termination of employment, a cash
amount equal to the cost to the Employers of providing the Excluded
Benefits.
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(e) If the Executive's employment by the Employers shall be terminated
concurrently with or subsequent to a Change in Control and during the term of
this Agreement by (i) the Employers for other than Cause, Disability, Retirement
or the Executive's death or (ii) the Executive for Good Reason, then the
Employers shall, subject to the provisions of Section 6 hereof, if applicable:
(A) pay to the Executive, within thirty (30) days following
the Date of Termination, a lump sum cash severance amount equal to
three (3) times the sum of the Executive's Annual Compensation; and
(B) maintain and provide for a period ending at the earlier of
(i) the expiration of the remaining term of this Agreement as of the
Date of Termination, (ii) three years following the Date of Termination
or (iii) 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 described in
this subparagraph (b)), with the Executive to pay the costs of such
coverage normally paid by employees of the Employers, the Executive's
continued participation in all group insurance, life insurance, health
and accident insurance, disability insurance and other employee benefit
plans, programs and arrangements offered by the Employers in which the
Executive was entitled to participate immediately prior to the Date of
Termination (excluding (w) the Employers' Employee Stock Ownership Plan
and any other tax-qualified plans, (y) stock option and restricted
stock plans of the Employers and (z) cash incentive compensation
included in Annual Compensation), provided that in the event that the
Executive's participation in any plan, program or arrangement as
provided in this subparagraph (b) is barred, or during such period any
such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Employers shall arrange to
provide the Executive with benefits substantially similar to those
which the Executive was entitled to receive under such plans, programs
and arrangements immediately prior to the Date of Termination. If
substantially similar benefits cannot be provided to the Executive,
then the Employers shall pay to the Executive a cash amount equal to
the cost to the Employers of providing such benefits; provided further,
however, that if the provision of any of the benefits covered by this
Section 5(e)(B) would trigger the 20% tax and interest penalties under
Section 409A of the Code either due to the nature of such benefit or
the length of time it is being provided, then the benefit(s) that would
trigger such tax and interest penalties due to the nature of the
benefit shall not be provided at all and the benefit(s) that would
trigger the tax and interest penalties if provided beyond the "limited
period of time" set forth in the regulations under Section 409A shall
not be provided beyond such limited period of time (collectively, the
"Excluded Benefits"), and in lieu of the Excluded Benefits the
Employers shall pay to the Executive, in a lump sum within 30 days
following termination of employment or within 30 days after such
determination should it occur after termination of employment, a cash
amount equal to the cost to the Employers of providing the Excluded
Benefits.
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6. Tax Indemnification.
(a) If the payments and benefits pursuant to this Agreement, either
alone or together with other payments and benefits which the Executive has the
right to receive from the Corporation and the Bank would constitute a "parachute
payment" as defined in Section 280G(b)(2) of the Code (the "Initial Parachute
Payment"), then the Corporation shall pay to the Executive, at the time such
payments or benefits are paid and subject to applicable withholding
requirements, a cash amount equal to the sum of the following:
(i) 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 Corporation and its subsidiaries, 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"; and
(ii) 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 (i) above and on any payments under this clause (ii). In
computing such tax allowance, the payment to be made under clause (i)
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
Social Security and Medicare taxes), including any applicable excise tax rate,
applicable to the Executive in the year in which the payment under clause (i)
above is made, and shall also reflect the phase-out of deductions and the
ability to deduct certain of such taxes.
(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)(1) 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 Corporation's
independent tax counsel or accountants shall determine the amount (the
"Adjustment Amount") which either the Executive must pay to the Corporation or
the Corporation must pay to the Executive in order to put the Executive (or the
Corporation, as the case may be) in the same position the Executive (or the
Corporation, 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 Corporation shall pay
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the Adjustment Amount to the Executive or the Executive shall repay the
Adjustment Amount to the Corporation, as the case may be.
(c) In each calendar year that the Executive receives payments of
benefits that constitute a parachute payment, 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
Corporation as described above. The Corporation 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 Corporation 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 Corporation shall assume control at its 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
Corporation in any such proceeding. The Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Corporation may
have in connection therewith without the prior consent of the Corporation.
7. 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.
8. Confidentiality.
(a) The Executive recognizes and acknowledges that during the
Executive's term of employment with the Employers, the 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) The Executive understands and agrees that if, during the term of
employment or at any time thereafter, the Executive discloses to third parties,
uses for the 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 the 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) The Executive agrees not to use or cause to be used for the
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
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knowledge or information, except that which is public knowledge, of or relating
to the business of the Employers 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
the 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.
9. 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 9 shall not be
deemed to prevent the Executive's ownership of not more than 1% of the capital
stock of any publicly held entity.
(b) 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.
(c) The Executive expressly agrees that (i) in the event of a violation
of these noncompetition provisions by the Executive, monetary damages alone will
be inadequate to compensate the Employers, (ii) the Employers will be entitled
to injunctive relief against the Executive in addition to any other remedies
provided by law or in equity and (iii) the noncompetition obligations contained
herein shall be extended by the length of time during which the Executive shall
have been in breach thereof. Except as provided in the preceding sentence, this
Section 9 shall not apply following a termination of the Executive's employment.
10. 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
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determination shall not affect the remaining terms, provisions, 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 words 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.
11. 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 law 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.
12. 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
Harleysville Savings Financial Corporation
000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
To the Executive: Xxxxxx X. Xxxx
At the address last appearing
on the personnel records of
the Bank
13. 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, except as set forth below. 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. In addition, notwithstanding
anything in this Agreement to the contrary, the Employers may amend in good
faith
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any terms of this Agreement, including retroactively, in order to comply with
Section 409A of the Code. In no event shall the Employers be liable for any
taxes or interest penalties incurred by the Executive under Section 409A of the
Code.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. 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.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: HARLEYSVILLE SAVINGS FINANCIAL
CORPORATION
/s/ Xxxxxxx X. XxXxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------- ----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
Attest: HARLEYSVILLE SAVINGS BANK
/s/ Xxxxxxx X. XxXxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------- ----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
Witness:
/s/ Xxxxxxx X. XxXxxx By: /s/ Xxxxxx X. Xxxx
---------------------------- ----------------------------------------
Xxxxxx X. Xxxx
President and Chief Operating Officer
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