EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement") is made this 17th day of September, 2003,
effective as of September 13, 2003, by and between Northeast Pennsylvania
Financial Corp. (the "Company"), a corporation organized under the laws of
Delaware, with its principal offices at 00 Xxxx Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxxx, 00000, First Federal Bank (the "Bank"), a federally chartered
stock savings bank organized under the laws of the United States of America,
with its principal offices at 00 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx,
00000 and Xxxxxx X. Xxxxx ("Executive").
WHEREAS, the Company and Bank desire to continue to assure both entities of
the services of Executive as President and Chief Executive Officer for the
period provided for in this Agreement; and
WHEREAS, Executive and the Board of Directors of both the Company and Bank
desire to enter into an agreement setting forth the terms and conditions of the
employment of Executive and the related rights and obligations of each of the
parties.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Position and Responsibilities.
(a) During the period of Executive's employment under this Agreement,
Executive agrees to serve as President and Chief Executive Officer of
the Company and the Bank. Executive shall have responsibility for the
general management and control of the business and affairs of the
Company and its subsidiaries, including the Bank, and shall perform
all duties and shall have all powers which are commonly incident to
the offices of President and Chief Executive Officer or which,
consistent with those offices, are delegated to him by the Board of
Directors of Company and Bank. During the term of this Agreement,
Executive also agrees to serve as a director of the Company and Bank,
and such of its subsidiaries as the Board of Directors of such
subsidiary deems necessary.
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(b) During the period of Executive's employment under this Agreement,
except for periods of absence occasioned by illness, vacation, and
reasonable leaves of absence, Executive shall devote substantially all
of his business time, attention, skill and efforts to the faithful
performance of his duties under this Agreement, including activities
and services related to the organization, operation and management of
the Company and its subsidiaries, including the Bank, as well as
participation in community, professional and civic organizations;
provided, however, that, Executive may serve, or continue to serve, on
the boards of directors of, and hold any other offices or positions
in, companies or organizations listed by Executive on his annual
conflict of interest reporting.
(c) The Bank or the Company (as they shall determine), will furnish
Executive with the working facilities and staff customary for
executive officers with the titles and duties set forth in this
Agreement and as are necessary for him to perform his duties. The
location of such facilities and staff shall be at the principal
administrative offices of the Bank.
2. Term of Employment.
(a) The term of Executive's employment under this Agreement shall be
deemed to have commenced as of September 13, 2003 and shall continue
for a period of twelve (12) full calendar months thereafter.
(b) The Compensation Committees of the Boards of Directors of the Company
and Bank will review the Agreement and Executive's performance
annually for purposes of determining whether to extend the Agreement
for an additional year. The Agreement shall be automatically extended
for an additional period of twelve (12) full calendar months, unless
the Compensation Committees of the Boards of Directors of Bank and
Company shall make a recommendation to the full Board not to extend
the Agreement. The Chairman of the Boards of Directors will give
notice to the Executive as soon as possible if the Boards have decided
not to extend the Agreement.
(c) Notwithstanding anything contained in this Agreement to the contrary,
either Executive, the Company or the Bank may terminate Executive's
employment at any time during the term of this Agreement, subject to
the terms and conditions of this Agreement.
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3. Compensation and Benefits.
(a) The Bank or the Company (as they shall determine), shall pay Executive
as compensation a salary of $214,500 per year ("Base Salary"). In
addition to the Base Salary provided in this Paragraph 3(a), the Bank
shall also provide Executive with all such other benefits as are
provided uniformly to permanent full-time employees of the Bank. If
Executive's Base Salary is increased, such Increased Base Salary shall
then constitute the Base Salary for all purposes of this Agreement.
For purposes of Paragraph 4(b) and 5(c), Base Salary shall also be
deemed to include payments of incentive compensation made to Executive
pursuant to any incentive compensation plan in effect during any term
of Executive's employment.
(b) Executive shall be entitled to participate in or receive benefits
under any employee benefit plans including but not limited to,
retirement plans, profit-sharing plans, or any other employee benefit
plan or arrangement made available by the Bank or Company in the
future to its senior executives, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans
and arrangements. Executive shall be entitled to incentive
compensation and bonuses as provided in any plan of the Bank or
Company in which Executive is eligible to participate. Nothing paid to
the Executive under any such plan or arrangement will be deemed to be
in lieu of other compensation to which the Executive is entitled under
this Agreement. From time to time, and as determined by the Boards of
Directors of the Company and the Bank, Executive may be entitled to
participate in or receive benefits under plans relating to stock
options and restricted stock awards that are made available by the
Company or the Bank at any time in the future during the term of this
Agreement, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans.
(c) The Company or Bank (as they shall determine) shall also pay or
reimburse Executive for all reasonable travel and other reasonable
expenses incurred in the performance of Executive's obligations under
this Agreement and may provide such additional compensation in such
form and such amounts as the Board of Directors of the Company or Bank
may from time to time determine.
(d) The Bank shall also pay Executive a one time payment of Fifteen
Thousand and no/100 ($15,000.00) Dollars as a Housing Allowance to be
applied by Executive as he in his sole discretion may determine.
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(e) Executive shall take vacation at a time mutually agreed upon by the
Company, Bank and Executive. Executive shall receive his base salary
and other benefits during periods of vacation. Executive shall also be
entitled to paid legal holidays in accordance with the policies of the
Bank.
4. Payments to Executive Upon an Event of Termination.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during Executive's term of employment under this Agreement, the
provisions of this Paragraph 4 shall apply. Unless Executive otherwise
agrees, as used in this Agreement, an "Event of Termination" shall
mean and include any one or more of the following: (i) the termination
by the Company or Bank of Executive's full-time employment for any
reason other than a termination governed by Paragraph 7 of this
Agreement; or (ii) Executive's resignation from the Bank or Company,
upon, any (A) notice to Executive of non-renewal of the term of this
Agreement (B) failure to reappoint Executive as President and Chief
Executive Officer, (C) material change in Executive's functions,
duties, or responsibilities with the Bank, the Company or its
subsidiaries, which change would cause Executive's position(s) to
become of lesser responsibility, importance, or scope from the
position and attributes thereof described in Paragraph 1 of this
Agreement, (D) relocation of Executive's principal place of employment
by more than twenty-five (25) miles from its location at the Effective
Date of this Agreement, (E) material reduction in the benefits and
perquisites provided to Executive from those being provided as of the
Effective Date of this Agreement, (F) liquidation or dissolution of
the Company or the Bank, or (G) breach of this Agreement by the Bank
or Company. Upon the occurrence of any event described in clauses (A),
(B), (C), (D), (E), (F) or (G), above, Executive shall have the right
to terminate his employment under this Agreement by resignation upon
not less than sixty (60) days prior written notice given within six
(6) full calendar months after the event giving rise to Executive's
right to elect to terminate his employment.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Paragraph 8, the Company and Bank (as they
shall determine) shall be obligated to pay Executive, or, in the event
of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be an amount equal
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to the sum of: (i) Six (6) months Base Salary if the Event of
Termination occurs during the first year of the Agreement, (ii) One
year's Base Salary if the Event of Termination occurs during the first
renewal of the Agreement, (iii) Two (2) years Base Salary if the Event
of Termination occurs during any subsequent renewal of the Agreement.
In the event the Bank or the Company is not in compliance with its
minimum capital requirements or if such payments pursuant to this
subsection (b) would cause the Company or Bank's capital to be reduced
below its minimum regulatory capital requirements, such payments shall
be deferred until such time as either the Company or the Bank or
successor thereto is in capital compliance. At the election of the
Executive, which election is to be made prior to an Event of
Termination, such payments shall be made in a lump sum as of the
Executive's Date of Termination. In the event that no election is
made, payment to Executive will be made on a monthly basis in
approximately equal installments during the remaining term of the
Agreement. Such payments shall not be reduced in the event the
Executive obtains other employment following termination of
employment.
(c) Upon the occurrence of an Event of Termination, the Company or Bank
(as they shall determine) will cause to be continued medical, dental,
life and disability coverage substantially identical to the coverage
maintained by the Bank for Executive prior to his termination at no
premium cost to the Executive, except to the extent such coverage may
be changed in its application to all Bank employees. Such coverage
shall cease upon the expiration of the remaining term of this
Agreement.
5. Change in Control.
(a) For purposes of this Agreement, a "Change in Control" shall mean an
event that; (i) would be required to be reported in response to Item
1(a) of the current report on Form 8-K, as in effect on the date
hereof, pursuant to Paragraph 13 or 15(d) of the Securities Exchange
Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in
Control of the Bank or the Company within the meaning of the Home
Owners' Loan Act of 1933, as amended, the Federal Deposit Insurance
Act, or the Rules and Regulations promulgated by the Office of Thrift
Supervision ("OTS") (or its predecessor agency), as in effect on the
date hereof (provided, that in applying the definition of change in
control as set forth under the rules and regulations of the OTS, the
Boards of Directors of Bank and Company shall substitute its judgment
for that of the OTS); or (iii)
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without limitation such a Change in Control shall be deemed to have
occurred at such time as (A) any "person" (as the term is used in
Paragraphs 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 voting securities of the Bank or the
Company representing 20% or more of the Bank's or the Company's
outstanding voting securities or right to acquire such securities
except for any voting securities of the Bank purchased by the Company
and any voting securities purchased by any employee benefit or
stock-based compensation plan of the Company or its subsidiaries; or
(B) individuals who constitute the Board of Directors of Company on
the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters (3/4) of the directors
comprising the Incumbent Board, or whose nomination for election by
the Company's stockholders was approved by a Nominating Committee
solely composed of members which are Incumbent Board members, shall
be, for purposes of this clause (B), considered as though he or she
were a member of the Incumbent Board; or (C) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of
the Bank or the Company or similar transaction occurs or is
effectuated in which the Bank or Company is not the resulting entity;
provided, however, that such an event listed above will be deemed to
have occurred or to have been effectuated upon the receipt of all
required federal regulatory approvals not including the lapse of any
statutory waiting periods; or (D) a proxy statement has been
distributed soliciting proxies from stockholders of the Company, by
someone other than the current management of the Company, seeking
stockholder approval of a plan of reorganization, merger or
consolidation of the Company or Bank with one or more corporations as
a result of which the outstanding shares of the class of securities
then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Bank
or the Company shall be distributed; or (E) a tender offer is made for
20% or more of the voting securities of the Bank or Company then
outstanding.
(b) If any of the events described in paragraph (a) of this Paragraph 5,
constituting a Change in Control, have occurred or the Boards of
Directors determine that a Change in Control has occurred, Executive
shall be entitled to the benefits provided for in subsections (c) and
(d) of this Paragraph 5 upon his termination of employment at any time
during the term of this Agreement and
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any extensions thereof, on or after the date the Change in Control
occurs due to (i) Executive's dismissal, (ii) Executive's resignation
following any demotion, loss of title, office or significant authority
or responsibility, reduction in annual compensation or benefits or
relocation of his principal place of employment by more than
twenty-five (25) miles from its location immediately prior to the
Change in Control or (iii) Executive's resignation for any reason
within the sixty (60) day period following the date that is one year
from the date the Change in Control occurred, unless Executive's
termination is for Just Cause as defined in Paragraph 7 of this
Agreement; provided, however, that such benefits shall be reduced by
any payment made under Paragraph 4 of this Agreement.
(c) Upon the occurrence of a Change in Control followed by Executive's
termination of employment, as provided for in paragraph (b) of this
Paragraph 5, the Company or Bank (as they shall determine) shall pay
Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries or his estate, as the case may be, as severance pay, a
sum equal to the greater of: (i) the payments and benefits due for the
remaining term of the Agreement or (ii) three (3) times Executive's
Average Base Salary and incentive compensation for the three (3)
preceding taxable years or (iii) three (3) times Executive's Base
Salary plus incentive compensation for the most recent taxable year or
portion thereof.
(d) Upon the occurrence of a Change in Control and Executive's termination
of employment in connection therewith, the Bank and Company (as they
shall determine) will cause to be continued life, retirement, medical,
dental and disability coverage substantially identical to the coverage
maintained by the Bank for Executive and any of his dependents covered
under such plans immediately prior to the Change in Control. Such
coverage and payments shall cease upon the expiration of sixty (60)
full calendar months following the Date of Termination. In the event
Executive's participation in any such plan or program is barred, the
Bank and Company (as they shall determine) shall arrange to provide
Executive and his dependents with benefits substantially similar to
those of which Executive and his dependents would otherwise have been
entitled to receive under such plans and programs from which their
continued participation is barred or at the election of Executive,
provide their economic equivalent.
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6. Change in Control Related Provisions.
Notwithstanding the provisions of Paragraph 5, in no event shall the
aggregate payments or benefits to be made or afforded to Executive under said
paragraphs (the "Termination Benefits") constitute an "excess parachute payment"
under Section 280G of the Internal Revenue Code of 1986 or any successor
thereto, and in order to avoid such a result, Termination Benefits will be
reduced, if necessary, to an amount (the "Non-Triggering Amount"), the value of
which is one dollar ($1.00) less than an amount equal to the maximum amount
allowable as a deduction by the Bank or Company, as determined in accordance
with said Section 280G. The allocation of the reduction required hereby among
the Termination Benefits provided by Paragraph 5 shall be determined by
Executive.
7. Termination for Just Cause.
The phrase termination for "Just Cause" shall mean termination because of
Executive's personal dishonesty, incompetence willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, regulation (other than traffic
violations or similar offenses), final cease and desist order issued by the
Office of Thrift Supervision, the Securities and Exchange Commission, or any
regulatory agency having jurisdiction over the Bank or Company, or material
breach of any provision of this Agreement. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Just Cause unless and
until there shall have been delivered to him a Notice of Termination which shall
include a copy of a resolution duly adopted by the affirmative vote of not less
than three-fourths (3/4) of the members of the Boards of Directors of the
Company and the Bank at a meeting of the Board of Directors of the Company or
the Bank called and held for that purpose (after reasonable notice to Executive
and an opportunity for him, together with counsel, to be heard before the Boards
of Directors), finding that in the good faith opinion of the Boards of
Directors, Executive was guilty of conduct justifying termination for Just Cause
and specifying the particulars thereof in detail. Executive shall not have the
right to receive compensation or other benefits for any period after termination
for Just Cause. During the period beginning on the date of the Notice of
Termination for Just Cause pursuant to Paragraph 7 hereof through the Date of
Termination, stock options granted to Executive under any stock option plan
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shall not be exercisable nor shall any unvested awards granted to Executive
under any stock benefit plan of the Bank, the Company or any subsidiary or
affiliate thereof, vest. At the Date of Termination, such stock options and any
such unvested awards shall become null and void and shall not be exercisable by
or delivered to Executive at any time subsequent to such termination for Just
Cause.
8. Notice.
(a) Any purported termination by the Bank or Company or by Executive shall
be communicated by Notice of Termination to the other party hereto.
For purposes of this Agreement, a "Notice of Termination" shall mean a
written notice which shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of Executive's employment under the provision so indicated.
(b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a termination for Just Cause, shall
not be less than thirty (30) days from the date such Notice of
Termination is given).
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, except upon
the occurrence of a Change in Control and voluntary termination by
Executive in which case the Date of Termination shall be the date
specified in the Notice, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award or by a final
judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been
perfected), and provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such
dispute with reasonable diligence. Notwithstanding the pendency of any
such dispute, the Bank and Company (as they shall determine) will
continue to pay Executive his full compensation in effect when the
notice giving rise to the dispute was given (including, but not
limited to, Base Salary) and continue him as a participant in all
compensation, benefit and insurance plans in which he was
participating when the notice of dispute was given, until the dispute
is finally resolved in accordance with this Agreement. Amounts paid
pursuant to this provision shall be in addition to all other amounts
due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement.
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9. Post-Termination Obligations.
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Paragraph 9 for one (1) full year
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Company. Executive shall, upon reasonable
notice, furnish such information and assistance to the Company and Bank as may
reasonably be required by the Company and Bank in connection with any litigation
in which it or any of its subsidiaries or affiliates is, or may become, a party.
Bank and Company (as they shall determine) shall reimburse Executive all
reasonable expenses, including costs, fees and expenses for Executive's counsel
in complying with the provisions of this Paragraph 9.
10. Non-Competition and Non-Disclosure.
(a) Upon any termination of Executive's employment pursuant to either
Paragraph 4 or 5 of this Agreement, at any time after September 13,
2004, Executive agrees not to compete with Bank or Company or its
subsidiaries for a period of one (1) year following such termination
in any city, town or county in which Executive's normal business
office is located and the Bank or Company or any of its subsidiaries
has an office or has filed an application for regulatory approval to
establish an office, determined as of the effective date of such
termination, except as agreed to pursuant to a resolution duly adopted
by the Board of Directors of either Bank or Company. Should such
termination occur during the first year of Executive's employment, the
term of Executive's agreement not to compete with the Bank or the
Company or its subsidiaries, shall be for a period of six (6) months.
Executive agrees that during such period and within said cities, towns
and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other
business activities of the Bank or Company or its subsidiaries. The
parties hereto, recognizing that irreparable injury will result to the
Bank or Company or its subsidiaries, its business and property in the
event of Executive's breach of this Paragraph 10 Subsection (a) agree
that in the event of any such breach by Executive, the Bank or Company
or its subsidiaries, will be entitled, in addition to any other
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remedies and damages available, to an injunction to restrain the
violation hereof by Executive, Executive's partners, agents, servants,
employees and all persons acting for or under the direction of
Executive. Executive represents and admits that in the event of the
termination of his employment pursuant to Paragraphs 4 or 5 of this
Agreement, Executive's experience and capabilities are such that
Executive can obtain employment in a business engaged in other lines
and/or of a different nature than the Bank or Company or its
subsidiaries, and that the enforcement of a remedy by way of
injunction will not prevent Executive from earning a livelihood.
Nothing herein will be construed as prohibiting the Bank or Company or
its subsidiaries from pursuing any other remedies available to the
Bank or Company or its subsidiaries for such breach or threatened
breach, including the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Bank and
Company and its subsidiaries as it may exist from time to time, is a
valuable, special and unique asset of the business of the Bank and
Company and its subsidiaries. Executive will not, during or after the
term of his employment, disclose any knowledge of the past, present,
planned or considered business activities of the Bank and Company and
its subsidiaries thereof to any person, firm, corporation or other
entity for any reason or purpose whatsoever unless expressly
authorized by the Boards of Directors of Bank or Company or required
by law. Notwithstanding the foregoing, Executive may disclose any
knowledge of banking, financial and/or economic principles, concepts
or ideas which are not solely and exclusively derived from the
business plans and activities of the Bank or Company or its
subsidiaries. In the event of a breach or threatened breach by
Executive of the provisions of this Paragraph 10 Section (b), the Bank
and Company will be entitled to an injunction restraining Executive
from disclosing, in whole or in part, the knowledge of the past,
present, planned or considered business activities of the Bank or
Company or its subsidiaries or from rendering any services to any
person, firm, corporation or other entity to whom such knowledge, in
whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein will be construed as prohibiting the Bank or Company or
its subsidiaries from pursuing any other remedies available to either
for such breach or threatened breach, including the recovery of
damages from Executive.
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11. Death and Disability.
(a) Death. Notwithstanding any other provision of this Agreement to the
contrary, in the event of Executive's death during the term of this
Agreement, the Bank or Company (as they shall determine) shall
immediately pay his estate any salary and bonus accrued but unpaid as
of the date of his death, and, for a period of six (6) months after
Executive's death, the Bank shall continue to provide his dependents'
medical insurance benefits existing on the date of his death and shall
pay Executive's designated beneficiary all compensation that would
otherwise be payable to him pursuant to Paragraph 3(a) of this
Agreement. This provision shall not negate any rights Executive or his
beneficiaries may have to death benefits under any employee benefit
plan of the Company or the Bank.
(b) Disability
(i) The Bank or Company or Executive may terminate Executive's
employment after having established Executive's Disability. For
purposes of this Agreement, "Disability" means a physical or
mental infirmity that impairs Executive's ability to
substantially perform his duties under this Agreement and that
results in Executive becoming eligible for long-term disability
benefits under the Company's or the Bank's long-term disability
plan (or, if the Company or the Bank has no such plan in effect,
that impairs Executive's ability to substantially perform his
duties under this Agreement for a period of one hundred eighty
(180) consecutive days). The Boards of Directors shall determine
whether or not Executive is and continues to be permanently
disabled for purposes of this Agreement in good faith, based upon
competent medical advice and other factors that they reasonably
believe to be relevant. As a condition to any benefits, the
Boards of Directors may require Executive to submit to such
physical or mental evaluations and tests as it deems reasonably
appropriate.
(ii) In the event of Disability, Executive's obligation to perform
services under this Agreement will terminate. In the event of
such termination, Executive shall continue to receive (x) one
hundred percent (100%) of his monthly Base Salary (at the annual
rate in effect on the Date of Termination) through the one
hundred eightieth (180th) day following the Date of Termination
by reason of Disability and (y) sixty percent (60%) of his
monthly base salary from the one hundred eighty-first (181st) day
following termination through the earlier of the date of his
death or the date he attains age 65. Such payments shall be
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reduced by the amount of any short- or long-term disability
benefits payable to Executive under any disability program
sponsored by the Company or the Bank. In addition, during any
period of Executive's Disability, Executive and his dependents
shall, to the greatest extent possible, continue to be covered
under all benefit plans (including, without limitation,
retirement plans and medical, dental and life insurance plans) of
the Company or the Bank in which Executive participated prior to
the occurrence of Executive's Disability, on the same terms as if
Executive were actively employed by the Bank or Company.
12. Source of Payments.
All payments provided for in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. Company and Bank reserve the right to
make payments provided for in this Agreement from general funds of the Company.
13. Effect of Prior Agreements and Existing Benefit Plans.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Bank, Company or any
predecessor of the Bank, Company and Executive, except that this Agreement shall
not affect or operate to reduce any benefit or compensation inuring to Executive
of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
14. No Attachment.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge or hypothecation, or to
execution, attachment, levy or similar process or assignment by
operation of law, and any attempt, voluntary or involuntary, to affect
any such action shall be null, void and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of
Executive, the Bank, the Company and their respective successors and
assigns.
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15. Modification and Waiver.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and
each such waiver shall operate only as to the specific term or
condition waived and shall not constitute a waiver of such term or
condition for the future as to any act other than that specifically
waived.
16. Severability.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
17. Headings for Reference Only.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. Governing Law.
This Agreement shall be governed by the laws of the State of Delaware
without regard to principles of conflicts of law of that State.
19. Arbitration.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three (3) arbitrators sitting in a location selected by Executive within
fifty (50) miles from the location of the Bank, in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
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In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to the payment of all
back-pay, including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under this Agreement.
20. Payment of Legal Fees.
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank or Company (as they shall determine), only if
Executive is successful pursuant to a legal judgment, arbitration or settlement.
21. Indemnification.
(a) The Bank and Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard
directors' and officers' liability insurance policy at its expense and
shall indemnify Executive (and his heirs, executors and
administrators) (in accordance with the By-Laws of both Bank and
Company) to the fullest extent permitted under Delaware law or under
the Bank's Charter against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit
or proceeding in which he may be involved by reason of his having been
a director or officer of the Company or Bank (whether or not he
continues to be a director or officer at the time of incurring such
expenses or liabilities), such expenses and liabilities to include,
but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
(b) Any payments made to Executive pursuant to this Paragraph are subject
to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and
12 C.F.R. Part 359 and any rules or regulations promulgated
thereunder.
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22. Successor to the Company.
The Bank and Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Company, expressly
and unconditionally to assume and agree to perform the Bank and Company's
obligations under this Agreement, in the same manner and to the same extent that
the Bank and Company would be required to perform if no such succession or
assignment had taken place.
IN WITNESS WHEREOF, Northeast Pennsylvania Financial Corp. and First
Federal Bank have caused this Agreement to be executed and its seal to be
affixed hereunto by their duly authorized officer and Executive has signed this
Agreement, on the 17th day of September, 2003.
ATTEST: NORTHEAST PENNSYLVANIA FINANCIAL CORP.
/s/ Xxxxx Xxxxxxxx BY: /s/ Xxxxxx X. Xxxxxxx
------------------ ------------------------------------
For the Entire Board of Directors
ATTEST: FIRST FEDERAL BANK
/s/ Xxxxx Xxxxxxxx BY: /s/ Xxxxxx X. Xxxxxxx
------------------ -----------------------------------
For the Entire Board of Directors
WITNESS:
/s/ Dee Xxx Xxxxx /s/ Xxxxxx X. Xxxxx
------------------ --------------------------------
EXECUTIVE, Xxxxxx X. Xxxxx
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